Many of us harbour idle fantasies about creating a multi-billion pound business from scratch, living in a mansion and flying to work in a helicopter. Richard Harpin has been there, done that – and now wants to share his formula with other aspiring moguls.
He is letting the world into his eight secrets for creating a billion-pound business.
The secrets – which include finding a mentor and making sure to hire a replacement for yourself – might at first seem more like common sense than a spectacular, revelatory blueprint.
But they are easier said than done and he believes he would have done even better as an entrepreneur had he discovered these nuggets sooner.
Success: Richard Harpin set up his company HomeServe, selling insurance policies for domestic disasters, in 1993 and sold it 30 years later for £4 billion
He set up his company HomeServe, selling insurance policies for domestic disasters, in 1993 and sold it 30 years later for £4 billion, making £500million in the deal himself.
‘My secrets are the eight things that, looking back over 30 years, I know now that I wish I knew then. If I had, I could have grown HomeServe in half the time. Which one of the eight is the most powerful secret depends on where a business is in its journey.’
One of the most important, at any point in time, he says, is having a ‘not-to-do’ list.
‘My mistakes largely stem from the fact I am a typical entrepreneur trying to make too many ideas happen,’ he says. ‘Every business should have a hedgehog strategy. If someone comes along with harebrained ideas, put your prickles up and tell them to get lost because you need to keep your focus.’
His secrets also include finding good investors and not being ashamed to copy good ideas if you can do them better.
‘There are many more complicated theories of business,’ Harpin says, but he adds: ‘I am a Yorkshireman, and I hope down to earth.’
His latest idea is ‘coachment’ – a concept he has trademarked and is a mix of coaching and mentoring. The word – dare I say it – sounds a little pretentious for Yorkshire, but then he’s the multi-millionaire, not me.
‘If I had known the eight secrets at the start of my career, I could have achieved success with HomeServe in 15 years instead of 30.’
‘As a country, if we turn more medium-sized companies into large ones, we wouldn’t need to worry about Government help to boost the economy. It would be entrepreneurs taking success into their own hands.’
Harpin, 59, is putting his money where his mouth is, by staking £165million of his personal fortune on younger entrepreneurs that he thinks can build billion-pound businesses.
Ventures he has supported so far include outdoor clothing retailers Passenger and Acai, luggage brand Stubble & Co and hair extension firm Additional Lengths.
At this stage, budding billionaires will no doubt be wondering whether Harpin might turn into their Fairy Godfather too.
Rather than staging Dragons’ Den-style auditions, he seeks out firms using two researchers who have drawn up a list of 11,000 medium-sized businesses.
‘They go through them at a rate of about 100 a week. I put in between £5million and £15million per company.’
He prefers to back retail businesses already making ‘a couple of million pounds’ of profit.
Another of his eight secrets is what he calls ‘bricks, clicks, and paper’, meaning that retail businesses need to embrace all sales channels: the high street, online, and catalogues and directories.
Checkatrade, which helps homeowners find tradespeople, finds the mini-directories that it drops through letterboxes are surprisingly successful.
He says he hasn’t checked on his returns yet, but made £5 million on an initial stake of £750,000 from his only sale so far of Enterprise Nation, a community of small businesses and advisers that aim to shortcut the route to support.
Hooked: As a schoolboy Richard Harpin built a business selling fly-fishing lures – which proved popular as ear-rings
Harpin says he has ‘killer questions’ he uses when recruiting or investing, so it seems only fair to turn the tables. When I ask him to describe a moment of adversity from childhood, he plunges straight into Lord Of The Flies territory.
‘At Scout camp, some boys staked me out with wooden tent pegs on an anthill, because my mum was the Cub Scout leader. I was on it for about an hour; the ants were biting me. I was about 12 at the time. Today, it would be seen as bullying, but it made me more determined.’
The episode didn’t put him off the Scouts. He is a keen supporter, and introduced an entrepreneur badge in 2010, which is still going.
Harpin himself was setting up businesses when he was still in short trousers. His first was selling fly-fishing lures, which resemble insects and are tied to a hook as bait. He found a market in women who wore them as earrings.
‘I knew I was an entrepreneur from the age of four,’ he says. He carried on his fly-fishing venture until he graduated, making enough for a deposit on his first home.
At nine, he started breeding white rabbits for conjurers and became a child magician at 11.
Born in Huddersfield and raised in Northumberland, Harpin describes himself as ‘a Northerner to the core’. After graduating in economics from York, he went to work in marketing at Procter & Gamble, the US consumer goods giant, in Newcastle-upon-Tyne.
‘My first job was marketing assistant on Fairy Liquid, which is why my hands are so soft,’ he jokes. His contemporaries included new BT boss Allison Kirkby and two of her predecessors, Philip Jansen and Gavin Patterson.
When I first met Harpin in 2008, he was commuting by helicopter between his home in Yorkshire and his workplace at HomeServe in Walsall in the West Midlands.
He would rise at 5am, go for an outdoor swim at his gym in Lichfield, Staffordshire, and fly home so he could be back for bathtime with his small children.
A big Tory donor, he lent one of his choppers to Rishi Sunak to use to fly to engagements, causing a controversy over why the Prime Minister did not take the train.
On the cusp of his seventh decade, he still lives at breakneck pace.
‘I don’t want to retire to a desert island; I want to work forever,’ he says. He is developing career objectives ‘for the next 30 years’.
His new role model, he says, is Malcolm Healey, a fellow Yorkshireman and the founder of Wren Kitchens. Harpin says: ‘He is 79 and still working full time. Wren Kitchens is his fourth business.’
Far from being an overnight triumph, HomeServe struggled in its early days. Several ideas did not work until he hit on one that did: plumbing insurance for South Staffordshire Water. By the mid-noughties, HomeServe was dwarfing its parent company and was floated on the stock market with a valuation of £300million.
There have been serious setbacks, including a £30million fine a decade ago for mis-selling policies and failing to investigate complaints adequately. At the time, a contrite Harpin apologised and said he had ‘transformed’ the firm.
‘The best time to set up a business – and to grow one – is in difficult economic conditions,’ he says. ‘Because if you can do that, then think what’s going to happen when we get back to higher levels of growth.’
But he adds: ‘There should be more focus on financing for medium-sized firms. I can only put in £165million of my money.
‘I can’t do it all on my own.’
