Theo Paphitis has lost count of all the businesses he’s invested in, and his criteria for picking companies to bet on has changed over the years, but he says ultimately success all comes down to the people factor. It doesn’t matter how great a business idea is – without a good person behind it, it won’t fly.
The Cyprus-born tycoon and Dragon’s Den judge reckons the show’s latest season (screening here on BBC Knowledge) will be “quite spectacular” with the best batch of wannabe entrepreneurs to date – and a little bit of tension.
That said, he’s “staggered” by the number of applicants who don’t do their homework and are “fooling themselves” – or worse, refusing to listen to advice.
“It’s good to be passionate but you also have to be realistic.”
Entrepreneurs need to a) make sure they’re going after their passion, b) do the necessary research and legwork and c) get cashflow sorted.
With technology lowering the barriers to startups by the day, Paphitis lists commitment, passion, desire and drive as the key characteristics for a successful entrepreneur.
Paphitis famously displayed his business acumen as a teenager while running his North London school’s tuck shop, before moving into retail, property and finance. Not surprisingly, his take on business school is that fails in providing real-world experience. However, he says it’s vital we teach people how to run companies, given most SMEs fail within the first couple of years. Cutting that rate is crucial.
He’s also dismissive of the impact of the GFC, his stance being that it’s easy to “whinge and moan and accept lower standards”.
Paphitis says he’s seen three recessions in his life, and while this has been the worst, a robust company should be able to plan for, and make changes, in order to weather any storm.
“A good business should be more than capable of dealing with it,” he says.
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