26/10/2010

Lara Morgan, Founder of Pacific Direct, talks about working hard and asking questions

Learning to Sell

Leaving school at 18, Lara Morgan returned from school in Scotland to her parents’ home in Hong Kong to find her father had gone bankrupt and all hands were required at the family’s financial pump. With an ambition to become a golf professional, Lara conceived a plan to work in the afternoons, leaving the mornings free for golf. With no training and paid a miniscule basic, she embarked on a steep learning curve and earned commission selling Yellow Pages. Forced by her circumstances to earn as much as possible, Lara found that the key to selling was to listen to her customers, understand what they wanted and meet their expectations. She was, in her own words, “ridiculously successful”.

Pacific Direct

In 1991, with plans to move back to the UK, Lara was offered the opportunity to sell guest amenities (sewing kits, toiletries and so on) to hotels in Britain. During a three week recce, Lara managed to secure a meeting at the Dorchester where she impressed with a pre-threaded sewing kit and Pacific Direct was in business. With only selling experience and a limited understanding of importing, cash flow and other business essentials, another learning curve was under way and in the heart of a recession at that. However, Lara knew that the methods she had employed in sales would be of vital importance in discovering and meeting the needs of her new customers.

The innovation was to provide hotels with miniature branded products — luxury items which hotel users might well have at home (or wish they had at home) and which improved the visiting experience of customers. The availability of smart brands in smart hotels was a natural fit and Lara’s starting point of the Dorchester slotted Pacific Direct into exactly the right market.

Planning

Lara’s first step was to get hold of a Small Business Plan from her bank, read it and apply it. She is amazed at how few entrepreneurs actually follow this simple step which will give new businesses every tool they need to get started. She also asked questions at every opportunity. She found that business contacts were always willing to offer advice and give the benefit of their experience and that for her it was simply a matter of asking and, of course, listening to and understanding the answer. She recommends asking as many people as possible and taking the advice that best fits with your own situation and experience; “you need to be humble and ask the right questions and then assess the advice you get back,” she says, “no one ever refused, but don’t be naive about what you have been told, keep asking questions.”

Growing

Lara had £17k saved from her commission earnings to start her business and her main investment was in sweat equity. She took no holiday for three years and frequently worked weekends. “You need to understand your product inside out — and those of your rivals — so that you know what is and what is not possible to meet customer requirements. You must relentlessly study your and related businesses and be multi-skilled,” is her firm advice. In the early days everything was done on a shoestring and Lara was managing shipping one minute and emptying the bins the next. Her only focus was on the business and is clear that the absolute dedication required does mean other aspects of life suffer. She admits that having fewer responsibilities in her early twenties allowed this level of perseverance and has great respect for anyone starting out already encumbered by family commitments, debt and other responsibilities. “I took one sick day in seventeen years and in the early days everything I did - other than the odd sanity game of squash - was done with an eye to company improvement.”

Although she started the business during the recession of the early 1990s, Lara does not regard this as a major stumbling block as long as the passion and hard work are in place. [i]“Always know where your cash is and have realistic expectations about how long it will take to make profits. Practical planning is essential — although I know a lot more now than I did then. All you need to know is in the banks’ guidelines which are better than ever these days.” She worries that depictions of business on television give a misleading underestimate of the ground work required and the long years of building towards profits.

Giving back

Lara sold Pacific Direct after 17 years in 2008 for £20m but like all entrepreneurs she has no plans to sit on a beach enjoying the fruits of her labours. Her years of experience are now being turned into a learning system for entrepreneurs ready for advice. “I have sold my business but not my knowledge,” she says, referring to 17 years’ worth of templates, which she is editing and organizing. “For example, my Master Actions Template would make meetings more fruitful. You can sit in a meeting with people, £75,000 worth of intellectual property and talent, with no agenda and no notes — it’s hopeless and a waste of time.”

The proposed range of templates sounds impressive and will cover every aspect of starting and growing a new business, particularly those areas where entrepreneurs can have an unrealistic approach. Even basic requirements such as understanding how to cost a product can be fundamentally misunderstood by new businesses. Lara sees this as part of her legacy, along with offering a fuller service to provide other useful hints and tips to help entrepreneurs and small business owners get the key disciplines in place to grow a successful business. She is determined to turn around a key statistic; 79% of businesses fail within 5 years and her aim is to turn that figure around to a 79% success rate.
She also strongly believes in investment in staff. “People think that training staff will encourage them to leave but that is nonsense, they will instead give more to your company,” she asserts.

Other plans

One project at a time is not really enough for someone used to working 25 hour days and 8 day weeks. Lara is also looking at a revenue model for a social enterprise project in London — what she describes as “a bit of philanthropy”, but her principal aim is to encourage others to achieve their (and their business’s) potential. “Mentoring is so powerful,” she concludes, as will doubtless become apparent when her website launches in the new year.


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