What I'd do with £500,000
Article Date: Nov 12 2008
Andrew Pearce, Pow Wow Now
Successful entrepreneurs have that magical touch when it comes to investing their money in both business and pleasure. We asked five owner-managers how they would choose to spend a £500,000 windfall
Andrew Pearce
CEO and founder, Pow Wow Now (conference call business)
Turnover: £5 million
Our company recently established a presence in 12 European countries, so I would use the money to engage with marketing and PR agencies over there. By investing the money in this area of the company, we’d be able to double our turnover. We’d need the marketing agencies in order to localise our campaigns.
We tried to run one campaign in France featuring a man slumped on his keyboard and the tagline: ‘Heavy night? If you don’t want to have a face to face, have a Pow Wow instead.’ That didn’t work well as they found the tone of the campaign offensive.
I’d say we would use £150,000 each in Germany and France, as these are the biggest markets for conference calling outside the UK.
Rajesh Agrawal
CEO and founder, RationalFX (forex adviser)
Turnover: £180 million
I would spread the money on a few different projects. I’d start by investing £100,000 in property in Ajman, Dubai, as there is a lot of development taking place there. I would wait three years and expect to see a return of around 35 per cent.
I’d then put £200,000 in the Bombay Stock Exchange, because in the past three years it’s more than trebled in value. I’d expect to see a 50 per cent return from a short-term investment of one to two years.
Despite the bad news in the US, I believe the dollar also represents a safe investment. I would spend £200,000 on buying dollars, wait for the exchange rate to go down and for the dollar to strengthen, so my original investment would be worth more.
Ed Macnair
CEO, Marshal (internet security company)
Turnover: £25 million plus
I’m really passionate about the countryside and I own a pub in Axford, just outside Basingstoke, which sells meat that is bought within a ten-mile radius.
I would love to use the money to provide angel funding for rural-based businesses and help farmers promote and sell local produce.
Rural people tend to be more in touch with where their food comes from and I don’t see why more people shouldn’t eat meat from where it’s reared.
As I have a wealth of experience in business, I’d be able to step in and use my expertise to help with business plans and local marketing and advertising.
The demand for local meat is huge and I’ve seen it sell out within minutes at the market. When you look at how successful door-delivered vegetable boxes have become, there’s no reason why I couldn’t help farmers do a similar thing with meat.
Ben Way
Managing director, The Rainmakers (venture capital firm)
Turnover: undisclosed
At this time, I would wait three to four months and take several companies out of administration.
It’s definitely going to be carnage in a number of sectors and it’s a great opportunity for cash-rich companies. The competition – mainly those concerns that have overstretched by getting into too much debt – will just drop away. Without doubt, it’s going to be a buyer’s market for the foreseeable future.
I would be looking specifically for companies with a good trading history – it doesn’t matter in which sector. They would either have had cash-flow problems or debt, but essentially be a solid business.
All you would need to do is buy the assets, get rid of the liabilities and you’d have a successful business.
With £500,000 I could probably buy five to ten companies and quickly build up a portfolio worth £3 million to £5 million.
Tony Speight
Co-founder, PS London (media and marketing company)
Turnover: £500,000
I’d use the money to buy a house in Southwold. It would work as an open invitation for friends and staff to use.
I’d also buy a Fiat 500, so whoever was using the house at the time could zip about between villages while they were there.
As I manage the creative team it would be perfect to say to my staff: go away for a couple of days and come back with a campaign idea. It’s not that easy to be creative at your desk.
I get staff to leave the office and go to art galleries and gigs for inspiration, but having a house to go to would be great for those who aren’t going out in office hours. And it could also work as an incentive to reward team members.
I’d be happy to buy a property at the moment; I do believe that house prices will fall further, but not as much as people say they will. Also, because I’d buy it outright, I’d have no mortgage to worry about.
