Business development · 19 December 2016

Overcoming adversity in business: Stolen furniture, no money and TfL red tape

Overcoming adversity
From starting out with a second-hand van to grappling with local authorities, these entrepreneurs showed that adversity can be overcome

Overcoming adversity is a recurring theme in any entrepreneurial journey. Whether it is finding that initial working capital, dealing with the sudden loss of cash or encountering operational hurdles, challenges will arise.

Business Advice spoke to three founders who reflected on their own experiences in overcoming adversity to give an insight into the challenges of running a small enterprise.

In 2009, university graduate Harsha Rathnayake was working for a junk removal company until his employer lost “almost everything”.

Closing the business, Rathnayake’s retiring boss left him an option – take his final month’s wages or the keys to an old Ford Transit van worth £700. Rathnayake opted for the vehicle, confident that he could build up his own company.

From there, Rathnayake used his £160 life savings to found London Junk. He started out by distributing flyers around local areas and following up a handful of old leads to secure customers. A Google AdWords pay per click (PPC) voucher worth £75 paid for some initial marketing, but Rathnayake realised that this wasn’t going to be enough to run the business.

Unfortunately, obtaining a business loan from a bank was quickly ruled out.

“I approached the banks, but none wanted to lend me the money. Firstly, because I didn’t have a credit history. I’m from Sri Lanka and before a bank lends you money it wants to see a credit history. The banks thought it was a risk to lend me the money. Some banks didn’t even open a bank account for me. I wasn’t eligible, apparently.

“I thought to myself ‘what’s next?’. The only thing I was left with was to find a part-time job, either early in the morning or later in the evening.”

Testament to his dedication to overcoming adversity, Rathnayake noted that he was “lucky enough” to find two jobs – a paper round with a 5am start, earning £100 per week, and working from 6pm to midnight as a delivery driver for a local Indian restaurant.

London Junk
London Junk founder Harsha Rathnayake

“I was working seven days a week for a year – the only way I knew the weekend had arrived was by the weight of the newspaper supplements.

“After one year – reinvesting all of the money I saved into the business – I managed to fund a second truck and a full-time helper.

Rathnayake recalled that the “turning point” for London Junk was his attendance at a local business networking group – the BNI – that enabled him to pick up some bigger customers with regular work.

“After that I stopped the paper round, and continued the evening job for a while. Eventually I had to stop altogether after I was turning up late due to the workload for London Junk.

Rathnayake said that it wasn’t so much inspiration or ambition that allowed him to succeed in overcoming adversity – “it was the only option”.

“When I was five years old my father passed away and my mother was left to raise three children. When I came to Britain from Sri Lanka I looked after my family back home, and I had to choice but to keep working. It doesn’t matter how hard it is.”

Cash flow problems in London Junk’s early stages led Rathnayake down a path that he “wouldn’t recommend to anyone”.

“The business didn’t have any capital, so I had to borrow money from Wonga at a crazy rate. I did this two or three times. That’s something I wouldn’t do again.

“I was lucky, I didn’t borrow too much. After that, the extra jobs were a much better way to get money.”

Rathnayake’s advice to other small business owners was to fully consider every available option before committing to one avenue.

“I went to Wonga before looking for part time jobs,” he added. “But by earning the money yourself, you never have to pay the money back. It’s just extra cash for the business.”

While getting a business idea off the ground poses a massive challenge to any entrepreneur, there is also the possibility for disaster to strike at any moment.

Tim Foster is Yummy Pub Co.’s head of being awesome. With his two co-founders, Foster has now overseen the opening of several pubs in the UK since 2007. The business is proud of its social aspects, running regular initiatives to provide disadvantaged young people with training and employment.

However, Yummy Pub Co. has encountered its fair share of challenges. Founded just ahead of a damaging recession, the company has seen a pub catch fire, subsequently get flooded, and even suffered substantial theft by a former manager to the tune of £19,000.

However, it was the theft of a new set of garden furniture at the company’s Grove Ferry pub that shaped the relationship between the business and its customers.

Yummy Pub Co.
Tim Foster with his Yummy Pub Co. co-founders at the Grove Ferry pub

“On our credit card we bought the best part of £15,000 worth of furniture for the garden terrace. The terrace is basically what sells the pub – it just fills up. We laid it out and it looked beautiful,” Foster said.

“The incident was three weeks later. We were all living at the site. I was downstairs and the others were upstairs.

“We went up for a cup of tea and all the furniture had gone. We said ‘did anybody hear anything?’, but it had all gone.

“I said ‘It’s March, I reckon if we ask customers and friends then we can borrow their odd bits of furniture. We can just go a bit quirky with it’.

“It spread like wildfire. People were coming down with all sorts – deckchairs, a real mish-mash of weird and wonderful furniture outside on the terrace. And again, it was our customers. We rewarded them with pints and managed to build our reputation with everybody, and just say thank you.

“We took down everybody’s details who had lent us the furniture and we bought them new furniture for their gardens, and basically repaid them for getting us through it.

Foster said that the obstacle was turned on its head, and in overcoming adversity the company established loyalty with its customer base.

“I genuinely believe that in business, it’s not about having friendships but about building communities. If you can get people to love you and love your product – no matter what it is – you will have succeeded,” he added.

Overcoming adversity when bureaucracy strikes

It is becoming increasingly common to see those in the corporate world opt for the entrepreneurial path. When Philip Reicherstorfer, previously an investment banker for JP Morgan, spotted an available railway arch space in the Vauxhall area of London, he knew that he could create a profitable restaurant in an area lacking in good places to eat.

With just days until the grand opening of Counter, Reicherstorfer was faced with a critical problem – no water supply.

“I had been pushing my builders on completing the project as fast as possible so we could open up, but the biggest challenge was Thames Water, who scheduled utility works for the weekend before opening.

“Unfortunately, it got its own mapping wrong and didn’t dig up the streets far enough to reach the water main. It didn’t have the required licence from Transport for London (TfL) to close the other half of the street.

“It was four days before our published soft launch, and we didn’t have any water connections.”

Reicherstorfer had been able to prepare the restaurant and train his staff using four large water tanks, but clearly a permanent solution was required to open Counter’s doors to the public. The utilities matter sat between Thames Water and TfL, with permission for completion of the works set to take three months.

Counter founder Philip Reicherstorfer stands outside his London-based restaurant

Reicherstorfer contacted the local MP for Vauxhall, who he said “very quickly” got in touch with the chairman of Thames Water.

He was also able to reach London Assembly member Caroline Pidgeon, having once met the Liberal Democrat MP through a friend.

Pidgeon lobbied TfL on behalf of Counter, phoning the CEO directly and “effectively told them to be prepared to explain why 50 people lost their jobs as a result of the restaurant not opening”, Reicherstorfer said.

“The next night, Thames Water turned up with its own diggers and equipment, finishing the works just in time for the soft launch that weekend. I was extremely relieved.

For Reicherstorfer, support from above was crucial in the business overcoming adversity.

“If you don’t make the right connections it can become very difficult. Sometimes large organisations lack that sense of urgency. Once you find the pressure point at organisations like TfL and Thames Water, they can actually move at speed.”

Counter’s story revealed much about the nature of entrepreneurs. They are reactive, resourceful and persistent – qualities often not found in other places.

Together, these stories demonstrate just some of the obstacles faced by small companies. No matter how solid your business plan, it’s always possible to find yourself in unexpected circumstances. It’s your response to the challenge that will judge you as a business owner.

If you think you’ve got a story of overcoming adversity worth telling, get in touch with us at editors@businessadvice.co.uk.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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