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Heddon Communications
Over twenty years of marketing communications & PR experience |
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Ex-Dragon Rachel Elnaugh fights back
Ex-Dragon and Red Letter Days entrepreneur Rachel Elnaugh fights back after rollercoaster of experience
Ex-Dragon’s Den judge and Red Letter Days entrepreneur Rachel Elnaugh has dealt with an extreme rollercoaster of success and crisis in her business life that would defeat lesser mortals. Having achieved an almost overnight success of her experiences company Red Letter Days and built a high profile as a judge on TV’s Dragon’s Den programme, she also had to deal with her company crashing into administration for reasons partly outside her control and the humiliation of the harsh media attention on her. She believes she has come out stronger and significantly wiser.
A keynote speaker at the Ideal Business Show at Newbury Racecourse on 29 April 2008, Rachel spoke passionately about her experiences, the key things she has learnt on her entrepreneurial journey and the advice she now gives to businesses.
Rachel set up Red Letter Days in 1989 at the age of 24 after trying to come up with a present for her father and eventually ending up packaging a ticket for cricket at Lords for him in a box of clues.
“It took me 18 months to get the company off the ground,” said Rachel. “I reached the point that nearly all entrepreneurs reach early in a new business which I call the “Pit”, when nothing seems to be going well and the money is running out. But I was determined to succeed and so asked for professional help. With newly designed materials and a 100,000 copy insert in the Daily Telegraph magazine targeted in the Surrey region I suddenly had overnight success – the phone didn’t stop ringing.”
By 2001 she had grown the business to a £10 million turnover with a £1 million profit and she expanded to offer experiences for other companies such as to Boots in a ‘white card’ scheme.
“A business is most vulnerable when all is going well,” continued Rachel. “In 2002 I had a crisis of confidence about where the business should be heading and brought in a team of management consultants to advise me. They advised that I should bring in a CEO and step back from the business. I was pregnant with my third child and so decided to go ahead and do that. This was a fundamental and fatal mistake. Many businesses make the same mistake, handing over control of their business and then heading rapidly into over-expansion and over-spending. Finance wasn’t controlled properly and within nine months the company had gone off the rails.”
“In 2003 I returned to the business to assess the extent of the damage and faced a £4.7 million loss. I spent two and a half years trying to get it back on track but found my biggest obstacle to be my bank who wouldn’t release over £3.3 million cash to me that they were holding as the perceived risk of the experience vouchers. Later this was valued to be only £1 million, but by then it was too late.”
“I had a choice. I could take on the bank and face a lengthy, draining and costly legal battle or I could put the company into administration and lose everything. I fought tooth and nail in every way that I could to avoid losing the company, but eventually on 28 July 2005 I gave in and handed the company over to the administrators. My fourth baby had been born four days before – it was a very surreal time. I was drained and exhausted, but my feelings were actually of relief and liberation.”
Rachel described the media frenzy in the days and weeks following with stories of the “Dragon who had fallen from grace”. She saw it as an opportunity for a new beginning and feels stronger and wiser as a result of her experiences.
Rachel now spends much of her time delivering entrepreneurial seminars and masterclasses to other business people, passing on her knowledge and advice for the benefit of other entrepreneurs. She has written a book entitled ‘Business Nightmares’ which includes examples of other entrepreneurs who have hit crisis point, including Gerald Ratner, Simon Woodruffe and Doug Richard.
She concluded her talk by offering key learnings based on her rollercoaster of experiences including “problems are the norm”, “if everything is going well… beware”, trust no-one”, “grow organically” and “control the money”.
“I am now putting my experiences forward to help motivate and inspire other entrepreneurs,” concluded Rachel. “What I have learnt has made me stronger and wiser, opening up new opportunities for me. There are many other areas of business open to me now – ‘in every adversity lie the seeds of opportunity’.”
Sue Heddon
Heddon Communications
01344 752093
07774 267280
sue@heddoncommunications.co.uk
1 May 2008
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