4

BUILDING THE EMPIRE

THE POCKETPHONE SHOP started its life in a Chinese restaurant on the Finchley Road in London, over lunch with Andrew Briggs. It made sense to start up on our own – I considered us to be two of the brightest, most experienced guys in the mobile phone industry not to own our own business. After that auspicious lunch, it took me less than a week to pull together a pretty good business plan, and Andrew came up with the great name, The PocketPhone Shop, or PPS, as it was soon to be known.

Starting a business is much easier than making it grow into a success: anyone can start up their own business and meet with failure, as I had proved earlier in my career. I may have been just twenty-six, but I had come through a lot, and was older, wiser, had accumulated a great deal of experience and knew this business very well. One of the keys to being successful is a bloody good knowledge of your industry.

My gut feel was £50,000 was a good start-up figure. I had the £15,000 I just got from Intercell and suggested to Andrew that he should match it, which he did. Somehow, I persuaded my father to put up his house as collateral for the remaining £20,000. He also arranged for us to meet his bank manager Andrew Spence at Lloyds Bank in Norbury, where we stayed for two years until we were taken into the corporate world of Lloyds. I will be for ever grateful to old Spencey for the support he gave us in those early days.

Obviously, we had a list of things as long as your arm to do. Near the top of the list was putting together a computer system, and early on we brought software designer David Goodman on board, who was going to hit the jackpot with us. We wanted to imitate the sales system we had used at the Carphone Warehouse and, as chance would have it, I just so happened to have a copy of it on disk.

Our banking relationship had been sorted with Lloyds, but prior to completing the account Andrew wanted us to meet with the bank his late father had banked with, NatWest, ‘the listening bank’. After sending in a business plan, we attended a meeting.

Straight away, I knew this was a complete waste of time. They stuck us in a room and handed us a loan application form as if we had walked in off the street. As we waited for the privilege of a meeting with the bank manager, we ruminated on what we were doing there; clearly they hadn’t read our business plan. Eventually we were taken through to the bank manager who sat behind a big desk in an austere room. Very pompously he crossed his fingers under his chin and in a most condescending way asked, ‘How can I be of help?’ following that with ‘if you need banking facilities, they are unlikely to be available’. This was going nowhere. The discussion turned into a farce and I reduced this arrogant, dismissive bank manager into a stuttering wreck.

Andrew wrote one of his ‘frankly I am astonished letters’ to ‘The listening bank’. We got a written apology, a cheque for our parking expenses and an invitation to come back in for another meeting, which we never accepted.

On signing the concession at Office World for Intercell, I recalled their MD, Simon Fox, telling me their busiest store in the country was in Slough. So on a rainy day in May 1994 we drove into Slough town centre and almost immediately found our ideal shop. It had everything we needed – big frontage, parking and on a busy road, it was available – and the rent was only £15,000 per annum. This was to be our first store, and it would launch our success.

My business plan was very detailed, incorporating forecasts, margins, stock levels, expansion plans – I took the experience I had crammed into my relatively short period of time in the mobile phone business and distilled it into one document. What we wanted was to be a retailer, not a dealer. Dealers are small time, and we wanted to compete with the big boys on the high street. Scratch that, we wanted to be one of the big boys on the high street. To do this, we knew that we had to have a good relationship with your airtime provider as it was through them that you connected customers to a network. I identified five of them, but only one, Astec Communications based in Cheltenham, showed any interest.

After a series of fruitful meetings with Edward Eve, the sales manager at Astec, we had a deal, or so we thought. We had negotiated all aspects of the commercial relationship, commissions, equipment provision, shop fit monies, all the nuts and bolts of the deal. Just as we were ready to sign, all of a sudden they asked for a meeting in Cheltenham. David Savage, their chairman, wanted to change the parameters of the deal.

Astec had their own retail outlets called Buzz Shops and Savage decided he wanted us to brand our shops the same way. I flatly refused. My view was we were going to be an independent retailer, not a bloody Buzz Shop, and I wasn’t going to budge on that. I could see Andrew physically sink into his chair. We had no other airtime provider and this deal was in danger of falling through if I refused to give in to their demands.

Savage insisted it was a deal breaker but, whilst Andrew panicked on the journey home, my gut told me different. By that evening, Edward Eve called me and the original deal was back on. We were ready to sign the agreement.

We hired two staff for our first branch, which would open in August, three months after our lunch in that Chinese restaurant. We decided on stock, price lists and an opening promotion, launching with an incredibly aggressive price point selling phones for just 99p. We were the first company to hook customers with the deal of an extremely cheap phone.

We hired Sharon Carlisle, who we had worked with at Carphone Warehouse, as the branch manager. Sharon started immediately and set about pre-selling phones from Andrew’s kitchen so we could get a good head start. Employing her was an inspired decision: she was an outstanding character and the heartbeat of our company, had a wonderful way with people and was instrumental in the success of the first store, which over the ensuing years would be our headquarters and the springboard for all the successes that followed over the next five years.

Opening day arrived, 6 August 1994. We had most things in place, but Andrew and the shop fitters were panicking as our sign for the front of the shop hadn’t arrived – without it, above the door was just an empty light box with all its gubbins. We had booked the mayor to officially open the shop, and had contacted the local press to take pictures. As the mayor got out of his car, the sign was being erected behind him. We started PPS as we were to go on – getting things done by the skin of our teeth!

The showroom looked great and our first customers came through the door, had drinks and purchased phones. By close of business we had connected around thirty phones.

The next day people were waiting outside when we arrived and we sold an incredible hundred phones on the day, which was no mean feat, given Astec expected us to do 100–120 connections a month based on the performance of their ‘fantastic’ Buzz Shops, and we’d done it in two days. The first three weeks flew past, and we had sold 257 phones, and in month two we sold a similar amount. Slough was proving to be successful from the get-go.

I moved to Berkshire into a small two-bedroomed flat next to the train station. It was hardly the most luxurious of surroundings but better than staying in my father’s spare room and my next-door neighbour was David Kemp, a former Crystal Palace player and now a coach at Stoke City.

With any business that has a small start-up capital and big plans, cash flow is king. The analogy I use is that lack of profit is like cancer and will get you in the end, whereas lack of cash flow is like a massive heart attack and will shut you down immediately. In order to get our cash flow, well, flowing, I negotiated getting paid the commissions for connections in two weeks and paying for stock in four. Getting paid before paying out was critical to the advancement of this or any cash flow-challenged business.

Soon Andrew had located a second branch, Epsom in Surrey. Our first shop had been open for just eight weeks, and we only had the princely sum of £7K in the bank, but such was our ambition and drive opening another store seemed the natural thing to do. Logically, perhaps it made more sense to establish ourselves before expanding, but we had big plans.

My eagerness to succeed knew no bounds. Using my stored away knowledge from my past in computing I even managed to override the online computer credit check system Astec provided for putting customers on air, increasing the pass rate by 30 per cent. This information was not best shared with Astec but proved very fruitful as we were able to connect so many more customers than other retailers.

The plans behind our ambitions were laid as we moved onto our second store.

We decided very early on that we were going to have to punch our way into this market. Using Wal-Mart’s legendary model of ‘stack ’em high and sell ’em cheap’, which was very successful in the US, we created our platform on price, as well as offering tremendous value and service to the consumer.

Having been on the shop floor, I believed it was incredibly important to trust your staff and treat them like professionals. I gave them information on margins and their commissions were paid on profit, so they knew what their performance meant to them and the business. This approach was very different from our rivals, and of course was open to abuse, but it was the way I wanted to work. We were not a citizens’ advice bureau where people casually strolled in, browsed through the tariffs and handsets, and left, clutching a handful of leaflets. We were a business and our job was to sell to every customer that walked through our door. I went to great lengths to have the business run the way I wanted, making each branch operate as if I were personally in it.

Once Epsom opened in the first week of November 1994, we now had all networks, including 121 and Orange, alongside the traditional networks of Vodafone and Cellnet, and were truly an independent dealer. We opened with a belter of a promotion, pricing the new highly rated Ericsson 237 phone at £49.99, a hundred pounds cheaper than anywhere else in the country. Epsom opened with a bang, although we did get complaints from Ericsson about our pricing. Epsom would never be as successful as Slough, it did OK but it was not phenomenal. Despite this our plans for expansion continued.

At Christmas, having only really been in operation since August, we had two shops, five members of staff and sold 500 phones in that month, which was not bad!

After New Year we were off again, planning our third shop – in Aylesbury, which was to open that April. This was to prove a landmark opening. It would be our first inside a shopping centre, and became our blueprint for stores. We were very creative in our approach, because this was a counter, not a shop. The rent was virtually nothing but we had a prime location next to the entrance doors. As part of the process before we opened each store, we worked out how many phones we would have to sell to make a profit. In most stores it was sixty, in Aylesbury it was twenty, and there we were selling 150 a month.

Andrew came up with the idea of using a celebrity to open stores so we signed up ‘Mr Blobby’, the popular character from Noel’s House Party, and used him first at the Aylesbury store. He was very popular and drew big crowds. When we changed to another television personality it sparked the headline in the Sun: ‘Mr Blobby loses his Jobby’, giving us some unexpected exposure.

The force behind the company’s expansion and progression was my direction and drive. I negotiated the commercial deals and made all the key decisions. It was never planned that way; Andrew just wasn’t as driven and confident as me. Nevertheless, his contribution was vital in the success and growth of the company. When we started the company we made ourselves joint MDs. But almost a year on, I felt that should change. A business invariably has one leader and that clearly was me.

I became the sole MD and Andrew became chairman, without relinquishing his 50 per cent shareholding in the company. Andrew saw the logic behind it and rather liked the idea of a statesmanlike role, overseeing the business. For me, this change needed to be made so that I could get about running the business and making the decisions that would benefit us both.

As our first year of trading came to an end we had a turnover of a million pounds, profits of £75,000 and had opened our fourth store – in Newbury, the hometown of Vodafone, the world’s biggest mobile phone network. We had always been on Vodafone’s radar, but now we were clearly in their sights.

Vodafone was buying out Astec and things were changing. Our relationship with Astec altered as our agendas diverged. At this stage we began to develop a direct relationship with Vodafone’s marketing team and especially Chris Tombs, who was the head of Vodafone’s channel marketing and someone who could provide the key for significant funding going forward.

In September 1995, we held the first of what would become an annual summer ball, which was attended by twenty staff. These events became bigger and more glamorous. The last one we held in September 1999 catered for 2,000 people, cost in excess of £350,000, and was held at the Royal Lancaster Court Hotel with entertainment that included Ben Elton. The balls were a way of rewarding my staff, but they also illustrated to the outside world how well we were doing.

During recent months I had pushed direct relationships with manufacturers. I had managed to open an account with Mitsubishi, and was working on one with NEC. This was what the big players did, and was a unique and aggressive strategy for a fledgling company.

As well as developing relationships with manufacturers we bought from wholesalers. Caudwell Communications, one of the biggest in the country, gave us competitive prices but wanted cash on delivery, cash we didn’t have. I found a way around this by dumping the cost on a relative’s American Express gold card, and because we were putting over £100,000 a month on it, it soon became a black card. Strictly speaking, we were in breach of rules and regulations governing the use of the card, which prevented you from buying items for resale. Caudwell’s sales team never should have authorised these payments but they were on commission. We paid the bill and everyone was happy, especially my relative who had more air miles than anyone in history.

These creative ways of thinking were critical to advancing our business, enabled us to gain more margin and allowed us to force the prices of stock down. Only big dealers had the clout to have direct relationships with manufacturers and wholesalers, yet we were doing it inside a year of trading.

By November 1995, we were up to 800 connections per month. And 60 per cent of those were Vodafone connections. We were now a respectable dealer in volume terms, but as I have said previously I had no desire to be a dealer, a dealer was a small business that only had a small amount of shops. I wanted to be a retailer and I wanted us to be the biggest retailer in the country.

As Astec was being bought out by Vodafone, they were trying to reduce costs. Connections from a third party like ourselves cost more money, and they also were not overly keen on our rapid expansion plans as they were part funding us. At the end of 1995, they terminated our contract, which meant we needed to find a new airtime provider. They had given us a period of time to find a new home for our business, not out of the goodness of their hearts, but because it was Christmas and they wanted the additional volume before completing their sale to Vodafone.

I negotiated a deal with another airtime provider, Unique Air, and then switched all of our connections immediately, ditching Vodafone in favour of Cellnet. I was furious that Astec let us down and extremely disappointed that Vodafone, despite our loyalty, had offered no help or support. This was a strategic move at the busiest time of the year to show that I could control our destiny. Effectively, I had stuck two fingers up at the biggest network operator in the world and with our store slap bang in Vodafone’s hometown, Newbury, signing customers up to their main network rival had political ramifications.

My audacious move had the desired effect. In early 1996, Ivan Donn, a Vodafone director, called me and hastily arranged a meeting with their airtime provider Vodacall. Ivan was keen to see us back in bed with Vodafone and recognised the fact that, although we were only sixteen months old, we had significant potential and a burgeoning reputation.

I secured an incredible deal with Vodacall. We received significantly more money than we had at Astec, we were given direct marketing and store funding, our commissions were to be paid weekly and they supplied stock on ninety-day terms. They also agreed to pay for the two stores that we had just opened. Sign the contract? I nearly broke their arms off. By a combination of skill and balls we had landed on our feet. We now had two airtime provider relationships: one with Vodafone and one with Cellnet.

At the end of our second year, our turnover had doubled to over £2.4 million. We opened a further four stores in very quick succession and were now up to ten, opening Reading, Harrow, Southampton and Uxbridge in quick succession. The spirit we had in the early days was replaced with achievement and massive growth, but the company changed, I changed and, despite all the gain and achievement that was to come, something was lost.

We were now cutting a bit of a swathe through the industry, ruffling the feathers of some of the market leaders. One was our old employers, the Carphone Warehouse, especially when we opened a store next to them in Guildford. We didn’t respect their self-appointed position as market leaders; they viewed us as upstarts.

Opening a store directly in competition to them in a very affluent town showed enormous courage and confidence. It illustrated that we felt we could compete with them at a time when most of the other mobile phone companies avoided going toe to toe with CPW. Quite frankly, I couldn’t care less. I wanted to have a store wherever it was profitable to have one.

Going into the lucrative Christmas market at the end of 1996, a war broke out between Carphone Warehouse and us over pricing. We now had fifteen stores, and CPW tried to squeeze us out of Guildford, lowering their prices to an unreasonable level. We followed suit. The networks tried to intervene as Carphone Warehouse went whining to them, but when Vodafone approached me I suggested that this was a conversation we should not have as it could lead to the thorny subject of price fixing and the matter was dropped. Christmas came and went, and we had a successful one, despite annihilating our margins in Guildford.

We now had a significant marketing spend so we employed a specific marketing manager to work alongside Andrew, and after opening another five stores brought in Mark Hodgson as our sales director, who had been at Astec Communications and instrumental in us getting our initial deal with them. Mark’s appointment saw us take on our first board member and probably marked the beginning of the deterioration of my relationship with Andrew as it was no longer just the two of us at the helm. For some time Andrew had gently mooted that he wanted to sell the business and now his overtures were becoming even stronger, but I told him to sit tight.

Mark and I set about restructuring the sales team bringing in a new raft of management – area managers. Over the last two years I had pushed, cajoled and driven my staff, making stores phone and report their sales figures to me on the hour. This had made the staff very focused. By bringing in area managers I would, via Mark, concentrate their minds on driving the stores even further forward.

In my all-out pursuit of growth I woefully under-resourced the finance department. We had twenty outlets and pushing towards a hundred staff on the payroll and were doing 3,500 phone sales per month. Simply speaking our accounts were in a mess and the inaccuracy of financial information was beginning to affect the business. I put Steve Maddocks, the poor bugger, who was working pretty much on his own, under tremendous pressure, which on more than one occasion reduced him to tears.

By the end of 1996 we had a cash balance of £1 million but our account lurched dramatically as we had to pay big stock bills, a sizeable payroll and an ever-increasing quarterly rent bill. Opening stores was now not only about increasing volume, it was about keeping the snowball of cash flow building.

In early 1997 in an attempt to get a bit closer to Cellnet, we binned Unique Air and signed up with Cellular Operations Limited, a Cellnet-owned airtime provider. At the same time we were being transferred to the biggest airtime provider in the Vodafone Group, Vodafone-Connect, as we had outgrown Vodacall. This put us into the same arena as CPW.

Chris Tombs at Vodafone was trying to get more money to support our expansion and arranged a meeting with Vodafone’s marketing director Mike Webb. It was a complete waste of time, as Webb showed no interest and asked me questions he already knew the answers to merely as an exercise to see what I knew. I intensely dislike people humouring me and like even less being patronised. I became so agitated by his behaviour I completely lost my temper, called him a wanker, and brought the meeting to a swift halt.

Tombs phoned me afterwards and said, ‘What the fuck did you do that for? It has taken me ages to get that meeting and you call a main board director a wanker.’

The story did the rounds over the coming days and I got some pretty good kudos out of it. It may have been that a few others in Vodafone shared my view and subsequently I got their extra money although I never dealt with Webb again.

Having now spent just over two and a half years with our head down and running, it was time to make some fundamental changes the business needed. Firstly we acquired a proper head office as we could no longer use the back of the Slough store as our headquarters, and created new departments like Human Resources and Customer Care.

It became apparent to me Mark was not running the sales team, I was. Mark was better suited to dealing with the marketing side of the business so I moved him out of sales and into heading up Marketing.

Coupled with our expansion and evolvement we enlisted the services of Ulrika Jonsson for the ‘nominal’ sum of £500,000. We planned to open a further fifty stores in 1998 and Ulrika was to be the face of the company. By the time we moved into Eton View House, our new head office in Slough, we were up to thirty-seven stores, opening twenty-two in 1997 alone, and selling over 7,000 phones a month.

Cash flow, given the level of expenditure and costs increases, was becoming a nagging worry as always, so I increased our bank overdraft. We had never used or even gone into it but as our status increased I felt we should take advantage of the situation and have access to money we might need at a later date. The thing that amused me about the bank’s attitude at the time was the security offered by us for the overdraft was a charge against stock and cash; of course if you are using an overdraft you have no cash and the first thing that often goes if a business were to fail would be stock.

Martin Cox, my former boss at CPW, had left them and I took the decision to appoint him as the new sales director. This didn’t appear to go down well with Andrew who had worked for Martin at CPW. But he took on board the fact that Martin now worked for him.

We also needed a real-time online point of sale computer system and, using my computing background again, I sat down with David Goodman and designed one. Until that point we were still using the sales system based on our unlicensed copy of the Carphone Warehouse’s system.

By the final quarter of 1997 we were ready to fully launch our new computer system. It was online, real time, tracked every single transaction and I could get sales figures from all the stores at the push of a button. I now had cyber control of my business, not relying on phone calls every hour from area managers but getting figures from locations all over the country by the second. The investment into this system was significant, with Goodman on a retainer of £20,000 a month, with an expected total cost of in excess of £1 million.

The new computer system was sometimes brilliant, but had teething problems, at times it crashed for no reason but worse than that …

The system worked on unique telephone IP addresses for each store that dialled up the server, got the information and logged off. What we didn’t realise was that once it went online at shops in the morning it stayed online until they closed.

I had fifty stores logged on for nine hours a day, six days a week for three months. Before then, our quarterly phone bills were coming in at around £60,000, so you can imagine what happened when one arrived for £400,000 – I dropped short of having a heart attack. We eventually resolved the issue with new software, but it still left us with a major financial headache.

Sales for our fourth year were over £24 million, with forecast profits of £1.2 million. But the disaster with the computer system wiped out a large percentage of them.

By now we had seventy-one stores and needed additional working cash. Financing this massive growth was always going to be bloody difficult, and with the whack we got from the telephone bill we needed more cash. I had a brainwave: approaching 121 I offered them a guaranteed 200,000 connections the following year. In exchange I wanted £3 million to finance our expansion and to increase our marketing. I knew they would bite my hand off as this kind of volume was what they were missing and would help their market share.

I met John Barton, their MD, and secured an additional £3 million, paid in four instalments. I was hedging my bets that we could deliver, we were only currently doing 15,000 connections a month on all networks – i.e. 45,000 a quarter, not the 50,000 per quarter required to just service this one deal with 121. But as I projected we would be opening a further forty stores by the middle of 1999, I gambled on delivering.

As we signed the agreement, John Barton said to bear him in mind should I ever think of selling PPS.

Problems started to surface with Vodafone Connect, who cut our commissions. So in a counter-measure, I decided to switch connections to 121. Within days connections to Vodafone were down 90 per cent. Once again, I was flexing my commercial muscles, but this time I had eighty stores so the message was even clearer. Within a week Andy Smith, the sales director from Vodafone Connect, was on the phone. He wasn’t impressed and wanted the connections back; after a few weeks the Mexican stand-off abated and we had commissions reinstated.

After winning the battle with Vodafone Connect over commissions I agreed to restore their level of connections. However, there was one small problem: the 121 deal. The fact that we had a falling-out with Vodafone had half-suited me, now it was back to my mouth writing cheques that my business couldn’t cash. I was spinning plates trying to balance cash flow, open stores, give volume back to Vodafone and give 121 the 50,000 sales per quarter I had promised them. The first quarter we did 29,000. My argument was that it was still a significant rise and they agreed to pay the second of the four £750,000 instalments, thus feeding PPS’s rumbling belly with its dietary requirement of cash.

As we were powering towards our one hundredth store, I now took a greater interest in our cost base. We had been spending £30,000 on each shop fit. I employed my brother Dominic as Operations Director, which led to a considerable saving. He recruited his own workforce in house, mass-produced all counters and shop equipment, which ensured that all future shops were built the same way, and we saved a million pounds over the next raft of shops.

Opening a new shop took time, as there was always a lag between agreeing a location and doing the necessary legals to obtain leases. Dominic, when surveying shops, took the keys from estate agents and unbeknownst to them cut copies. As soon as I gave him the nod on a shop, he would use his newly cut keys, go in and start fitting shops before we had even signed leases. We amazed everybody when days after completing a lease we had a fully fitted shop and were open for trade.

By now Andrew and I were enjoying the spoils of the business. We were paying ourselves £250,000 each per year, plus all our expenses. I had two cars, a Jaguar convertible and a Ferrari, and Andrew had an Aston Martin, but despite all this he was still banging on about selling. We had a company Mercedes S class and we also had a fleet of expensive cars for department heads, area managers and directors alike. In fact, our car park at Head Office was like a showroom for German luxury car manufacturers.

We had over 500 staff and were growing daily. We employed a new HR manager and started our own training academy. Training courses were mandatory for all new employees. They were required to attend for a week and pass exams to commence employment. On average between fifteen and twenty-five people would attend the course and I spoke passionately on every one to instil confidence, belief and drive in my staff. Besides, I was only thirty, and I’d been where they were not so long ago, so they could relate to me. I wanted them to have my passion, determination and desire to succeed; I wanted them to be the best.

Stock management was becoming a major issue. Criminals were now targeting vans picking up stock. Three times in the space of two weeks vans with tens of thousands of pounds’ worth of stock were held up at gunpoint. And, as if I didn’t have enough on my bloody plate, the police informed me they had intelligence to suggest that I was being targeted as a kidnap victim. I had to hire security to accompany me everywhere until the police dealt with this information. I viewed this as slightly comical and laughed it off but eventually the police arrested a crew they strongly believed had targeted me.

Having spent several months looking for a finance director I employed John Davies at the start of 1999. For the first time I had someone on board who went through the finances like a forensic accountant and gave me a proper financial picture, yet it irritated me as I was used to my word being law. As I didn’t take kindly to criticism, this led to some early disagreements and almost John’s departure, which would have been a disaster at a time when we were projected to do £60 million in business and make £2.4 million in profit.

Andrew now had little day-to-day involvement in the business and had plenty of free time on his hands. He wanted to sell the business and he employed Arthur Andersen’s, one of the ‘big five’ accounting firms, to represent him in his desire to find a buyer.

I was up to my eyeballs in managing this monolith of a business that was now in excess of 110 stores. I humoured Andrew by reluctantly agreeing to meet his people. It was in the early part of 1999, and the moment they walked into my office on a Monday morning, all pinstripe suits and pinkie rings, I knew it was not going to go well. Their ringleader, who looked like a Giles so we’ll call him Giles, regaled me what I had to do. I listened to his self-serving nonsense and, after a deliberate pregnant pause, sent the aforementioned Giles and his mute cronies fleeing back to the City with two words ringing in their ears, and one of them was ‘off’.

Andrew extracted a solemn promise from me that I would seriously think about selling, but as soon as he left I filed it in miscellaneous and got on with the real business of building the company.

My determination and single-minded focus to make PPS successful was relentless. I was accused of being a control freak and a hard taskmaster. I think you have to have elements of the two when you are building a business.

I was driven crazy by stores’ inability to answer the phone. So I instructed every branch to answer the phone within three rings, and set up a team of customer care girls to ring the branches four times a day for a month to ensure they did – and woe betide those that didn’t. It led to a fair few verbal warnings but after a month or so everyone answered the bloody phone promptly.

Punctuality was also an issue. I wanted stores open for business at 8.45 a.m. and it wasn’t happening. I could monitor what time staff arrived through the activation of each store’s alarm, and got reports electronically produced. Stores that were late got a phone call from their MD, and if they persisted they got a call from HR terminating the staff’s employment. One store, in a shopping centre in Uxbridge, got the shop next door to open the store for them and deactivate the alarm. So one morning I turned up, waited for them to arrive at 9.30 a.m. and sacked the entire staff on the spot. I wanted professionalism and excellence and I would damn well do what it took to get it.

For two quarters we failed to hit the level of connections we had agreed to do with 121, and the last quarter we did 40,000 of the 50,000 required. This meant that 121 were reluctant to pay the third tranche of £750K. In fact, their finance department tried to reclaim some of the monies they had paid, but our increase in volume was still so significant that I managed to cajole the money out of them. I just kept spinning those plates!

In the middle of 1999 Time Computers approached us about a concession deal. We settled on twenty concessions and jumped up to 150 stores. We had moved into London, opening three stores in key locations. It was the last time we were to use Ulrika Jonsson. She failed to turn up on time to open one of our stores and we missed the chance to gain some serious publicity. As a result I went ballistic and when she refused to meet her legal obligations we sued her (subsequently, due to ensuing events, incredibly this action was dropped). Later, when I purchased Crystal Palace, liberty-takers being paid and failing to honour performance obligations became the norm.

Due to our size, it was becoming incredibly difficult to control what was sold in the manner I had so rigidly been able to in the past. I had eight terminals on my desk and each one monitored twenty stores. I watched sales figures religiously and when they weren’t to my liking, called meetings with the area managers and, shall we say, focused their minds in no uncertain terms. In an attempt to get figures up to an appropriate level I used all kinds of incentives, including the use of my Ferrari 355 Berlinetta to area managers with the best sales. Stephen Hargreaves, who managed our stores in the north-west, was the first winner. He drove thirty miles in the car and had an enormous crash – so much for incentives.

By the last quarter of 1999 cash flow was beginning to become critical. Again, we needed a serious cash injection to keep the business afloat. By now we had a £3 million overdraft, which we had never used, but our forecasts predicted we would eat into it and require at least another £1 million on top imminently.

My brainwave was to arrange another deal. This time the agreement was with Vodafone. We had nearly 300,000 live customers on Vodafone’s airtime and growing and were paid 3 per cent of their call spend, which roughly meant about 0.25p per customer per month, paid to us on a monthly basis. I convinced Vodafone to pay the next two years’ worth to us in one lump sum. Hey presto! £2.7 million, and the end of the cash flow crisis … for five minutes. How many plates was I spinning now? 121, Vodafone, cash flow, Andrew, stores opening …

Speaking of Andrew, he was becoming impatient and again wanted to sell the business. So, after some deliberation, in a strategic move, I offered Andrew a figure for his share of the company upon completion of the sale of the business, and after careful consideration he accepted my offer.

So on the eve of a new millennium, as everyone else was preparing for the beginning of a new era, I was preparing for the end of one. I had decided to put The PocketPhone Shop up for sale.

In December 1999 we topped 50,000 connections. We had done in a month what had taken us the first two years to achieve. We were now the second biggest phone connector in the country and one of the fastest expanding businesses in the UK. The remarkable growth of this company in the space of just five years was almost beyond comprehension.

After I agreed a price with Andrew for his share in the company, his lawyers drafted up a formal agreement, stipulating the price for Andrew’s stock out of the proceeds. Other stipulations were made, notably that any offer over £30 million had to be accepted!

Andrew again brought Arthur Andersen’s into the fray and this time I decided to use them, albeit different people from the irksome ‘Giles’ I had thrown out of my office a year earlier, but on my terms. I met Andersen’s, who were aware of the proposed agreement between Andrew and me and its stipulations. I spoke in detail about the market and who I believed would be the likely buyers. I discussed their fees and made it clear that the bigger the sales price they achieved, the bigger percentage they would get. It meant that I could be in breach of Andrew’s stipulation that the business must be sold at offers over £30 million. But I didn’t care, and neither did they.

Selling a business is a protracted and often nerve-racking process. And whilst I had made my mind up to sell, it felt strange: I was selling something that I had put my heart and soul into.

Andrew and I barely spoke. He never came into the office again. Our conversations were short and to the point, sometimes flaring into arguments. As far as I was concerned, Andrew was in no position to make demands. As long as he got what he wanted, everything else was academic. I was not going to engage in petty conversations and arguments with him.

In February 2000, once the polished sales document was complete, I suggested Andersen’s should approach Orange, Cellnet and 121, leaving Vodafone for another day. A quick timetable was mapped out. Documentation with interested parties by middle of March, indicative offers end of March, and final offers mid- to end April. There would then be an exclusivity period to allow the preferred bidder to perform due diligence, and completion by end of May 2000.

As the documents went out, I then told the Andersen team exactly who would buy it and for how much. I predicted it would be 121 and for north of £60 million. I told them of the conversation with 121 fifteen months earlier, when John Barton wanted me to tell him if I ever decided to sell.

In March we got three offers: Cellnet for £35 million; Orange for £40 million; and 121 for £40 million. We were now in play. All three exceeded the £30 million I was obliged to accept under the agreement with Andrew. As these were indicative offers, Andersen’s and I decided not to accept them. We also agreed that this was something that Andrew did not necessarily need to know at this stage.

Andersen’s went back to the bidders with a risky strategy to demand more. It was a gamble I was prepared to take because I strongly believed the business was worth more than what was on the table and Andersen’s agreed. Of course they did – their commission structure told them to.

Cellnet dropped out, to no surprise to me – we never had much of a relationship with them. Orange came back with £45 million and 121 with £50 million.

I decided to inform the other directors where we were at with negotiations, as individually they would profit from the sale. This was a mistake as, with the exception of my brother Dominic, at least two of the other directors lost their focus. I had heard of people when a business is being sold going into the ‘departure lounge’ but some of my directors were sitting on the plane sipping fucking mai tais.

At this stage Andersen’s started to panic and wanted to involve Vodafone. Their concerns increased when Orange dropped out, leaving one bidder at the table, 121. I had had a phone conversation with 121’s MD John Barton, who wanted a steer. I told him to get serious. Days later they came back with an increased offer: £60 million.

Time was against me doing this deal because the agreement with Andrew expired on 30 June 2000. Andersen’s wanted to take the offer but I said let’s go again. We unbelievably had 121 bidding against themselves.

When they upped the offer to £70 million and I still refused to sell, Andersen’s almost went into meltdown. But the way I wanted to sell PPS was indicative of how I ran the business, pushing the envelope on every deal.

My apparent disregard for what 121 were offering made them want it even more. Eventually they got to £88 million and refused to go a penny higher. It was somewhat remarkable, given that they had been bidding against themselves from £45 million onwards.

I eventually phoned Vodafone and told them we wanted £90 million for the business or we would sell it in twenty-four hours. They required less than an hour to say no.

So, on 27 April 2000, I instructed Andersen’s to accept 121’s bid of £88 million. We entered into a period of exclusivity with a timetable of completing in May. This is where the dynamics changed and the fun began.

When Andrew was finally informed what price I had accepted, the silence was palpable. His lawyers demanded to know how we got to this figure. I metaphorically shrugged my shoulders.

121 came in and brought a massive team of accountants and experts to go through all aspects of our business. This was a painful and arduous process. And the balance of power had shifted in the negotiations: since I had accepted their offer, my façade of being reluctant to sell had been destroyed.

I soon discovered that due diligence was Gaelic for get the price down. They wanted to go through the computer system and the stock, two prospects that concerned me, to analyse every financial agreement and document, and interview key staff in the business without my presence. They wanted to understand every commercial deal we had ever done. I didn’t want 121’s people sniffing around behind my back; I wanted to be present at every meeting they held. They tried in vain to circumnavigate me.

But 121 and their due diligence were not my only problem. I had two others that almost broke the deal: Andrew Briggs and David Goodman. Andrew was communicating only through his lawyers and trying to make other demands to indemnify himself against this and that.

And then there was David Goodman. The computer system had been sold as the best, which it was – when it was working! 121 wanted the intellectual property rights, and I believed I held them. But it turned out I was using it under licence. Goodman was a prickly little bugger who had got up most people’s noses. I was probably one of the few people that tolerated him. I demanded the IPR but he wanted big money for them. I couldn’t believe it – I had paid him untold amounts of money and swallowed the £400K in BT Costs because of his software balls-up and now this.

There was also the added complication that he had been diagnosed with a very serious illness; thankfully he was to make a full recovery in time. The treatment he was taking made him even more difficult to deal with, and while I tried to be sympathetic to his plight, at times it proved very difficult. After all, this was a computer system designed to my specifications and he was holding a loaded gun to my head. When he demanded £10 million for the IPR I was consumed with rage. And all this was going on without the knowledge of 121.

The cash flow at PPS was creaking again. No, more to the point, it had reached a critical stage. During my absence, my fellow directors had failed to hold things together and had let the business drop. As PPS balanced on a knife edge of cash flow, a couple of months of bad trading put us under extreme pressure.

Back at Head Office it was one meeting after another. 121’s guys went out to stores and the warehouse without my knowledge, precipitating a massive outburst from me. In a fit of pique I threw their guys off site. John Barton called me to complain. I told him they either coordinated through me, or they could piss off. John Barton reminded me of the size and importance of this deal, and told me to calm down and let them get on with their jobs, but he assured me that they would extend all courtesies.

Then I discovered a hole in the stock to the tune of £700,000 and had to call in a favour with a wholesaler to get a million pounds’ worth of stock and to arrange to pay him after the completion of the sale.

121 wanted a demonstration of the computer system and on the day they turned up it only bloody crashed. I made the decision to go ahead with the demo, but I had to create an illusion of it working using a back-up system, a mobile phone and a guy who would know what store I was logging into in advance. After going through this routine of what pre-arranged store I was logging into, my in-house IT guy, Suresh, downstairs, would log into the said store and I would illustrate how transactions were going in Liverpool, Newcastle, Dundee, Croydon. It was smoke and mirrors, but I pulled it off – they loved the real-time system and went back to their headquarters raving about it.

We were reaching the end of May and 121’s due diligence and legal meetings were still ongoing. Their legal people were getting right up my nose and Andersen’s were invaluable at keeping things together.

Briggs’ absence caused unnecessary concern with 121, who thought the deal would break down because he was not on board. I showed John Barton the confidential agreement between Andrew and myself so he understood there was no issue in the sale, just Andrew being tetchy about the differences in what we were both getting. John understood immediately and brought some order to the fraying nerves at both ends.

121 now started to chip at the price. They had discovered that the contract for the Time Computers concession was not being renewed and attached a £10 million valuation to it. That was nonsense and they knew it; they had seen the volumes we were shifting weren’t that great. So a £10 million reduction was a try-on. They also had a raft of adjustments, which caused much argument and nearly broke the deal on a daily basis.

More pertinently, I had decided that I was going to buy Crystal Palace Football Club and as much as I had tried to keep it under wraps, John Barton was aware of it. He tried to knock the price down to £65 million, we horse-traded, negotiated and beat each other up until we eventually settled on the final sale price of £77.8 million.

Right in the middle of this I had to fly to America as I was best man at my best friend Walter’s wedding. I was writing a speech for that, whilst juggling calls between lawyers and accountants representing my sale of PPS for £78 million, and another set of lawyers and accountants for my purchase of Crystal Palace Football Club, which I was buying with money I didn’t even have yet.

On returning from America I discovered our cash flow was completely shot to pieces. I pushed to close before the shit really hit the fan. David Goodman finally agreed a figure of £1 million for the licence, not the IPR and no software support contract.

Adding insult to injury two of my directors refused to sign standard non-compete agreements. That was it for me. I had held this thing together by duct tape, whilst they had taken the foot off the pedal. These two difficult sods were about to get more money than they had ever seen and they were arguing about the ability to sell accessories or some such crap in the future. I took both of them outside and said they either signed or they would get fuck all. Let’s say it had the desired effect.

121 were cooling and I sensed the deal was falling away. I suggested we complete on Monday 18 June in a hotel in Borehamwood and drove there first thing Monday morning. 121 were sticking on wanting the IPR for the software and a maintenance agreement.

Even so, we couldn’t complete the paperwork, as Andrew’s lawyers were not ready. The following day we tried to sign the completion paperwork again. Andrew had signed a power of attorney overnight with his lawyers who signed for him, completing his end of the agreements and providing the bank account details of where he wanted his share of the sale proceeds sent.

All day I worked on Goodman. Eventually I got his assistant to provide a third-party software maintenance agreement but I couldn’t get the IPR. In the morning I had no choice but to go with what I had: a third-party service agreement and an irrevocable licence to use the software.

I called John Barton into an alcove next to a vending machine outside the room, and after a few words he finally shook my hand on the deal. I went in, signed document after document in triplicate, and also signed my own resignation.

I had wanted to stay and oversee the takeover, but they wanted to put their own footprint on the business straight away so I agreed to go, and that was to prove a very costly decision.

On 20 June 2000, ten days before my agreement expired with Andrew and probably a matter of weeks before the cash flow ground to a halt, I signed away my ownership of the company. It had been five years and ten months since we had opened the doors to that first shop in Slough on 6 August 1994. This brilliant business built out of acumen, alchemy and bloody single-mindedness was now in my past. I had swapped passion, drive and immense achievement for a big bag of cash. Was it an equitable swap? I wasn’t quite sure, but it did give me the opportunity to look after my family.

And who knew what else would come of it?