BusinessCompany NewsProfile: Enter the Dragon – Peter Jones

Profile: Enter the Dragon - Peter Jones

Top TV entrepreneur Peter Jones argues that bad businesses should be left to their own fate and explains why smaller accountancy firms are better than the big guys

When you imagine the seat of Peter Jones’ empire you’d be forgiven for
picturing a fortress hewn from the granite of a lightning-struck cliff face.

But a business park in Marlow is where this particular Dragon has set up his
lair. It’s a no-nonsense can-do kind of place, which is reflective of the mogul
Accountancy Age has come to interview. ­ The luxury Maybach Mercedes
Benz with the personalised number plate is the only conspicuous sign of wealth
at his HQ.

But Peter Jones is running late, an unwanted side-effect of such a diverse
set of business interests which include the companies and entrepreneurs in which
he invests, his various TV shows and advertising endorsements. When he finally
emerges from his office he poses for a few pictures and eases into a cavernous
seat tailored to accommodate his 6’7” frame.

He conveys the impression everything is taken in his stride even at a time
when the UK economy is in tatters and household names and brands are going to
the wall.

In his twenties Jones lost his own business as key customers imploded,
putting him on a steep learning curve.

This is one of the reasons he is championing Small Business Week, hosted by
BT Business and launching the start of findings of the Business Pulse survey –
one of the UK’s largest ever surveys of smaller enterprises.

His experience of business failure sharpened his own outlook when it comes to
making investments and surviving tricky market conditions, and the plight of
SMEs in general.

“We’ve just got carried away on the self-fulfilling cycle of increased debt
and let’s be perfectly honest, we’ve gone from hero to zero in the last six
months,” Jones says.

He predicts SME businesses will continue to suffer the wrath of
over-leveraged banks trying to recover from sub-prime shockwaves, and some
under-par businesses would have to be sacrificed for the good of the rest.

“Of course we want the approval of credit to speed up a bit. We want credit
to start flowing a little bit faster than it is but, if you open up the doors
and credit opens up too fast, all that’s going to happen is the businesses that
are going to be saved, on occasion, will be businesses that probably do not
deserve to be around.”

“Let’s be honest, over the last 12 months, you’ve had businesses which have
clearly run on the back of a beautiful crest of a wave, they’ve just copycatted
existing businesses and there’s no real unique selling position.”

The accountancy profession, made a scapegoat for flaws in banks’ bookkeeping,
touts itself as a key adviser to businesses spanning the FTSE 100 to those ‘mom
and pop’ concerns at the other end of the spectrum. However Jones says the
profession, especially the Big Four, shouldn’t be so quick to believe their own

“Can accountants be Masters of the Universe? The answer’s no, and any
accountancy firm that says ‘we can do it all’ is only trying to take all your
money and perhaps not give you all of the best advice.”

He says he prefers Grant Thornton over a Big Four sign-off because of the
mid-tier firm’s arms length approach.

“I think the Big Four do have a view and, to be perfectly fair, they do have
an infrastructure that has experts in certain fields so I think that it is right
they provide services to their clients under one umbrella. But what I’m saying
is they can learn a lot from pulling very specialist knowledge that sometimes
comes from outside of their own network. Perhaps that doesn’t happen as often as
it should.

“That for me is where accounting firms can really add some serious value ­
because there is no conflict of interest then.”

An area where accountants provide undoubted value is insolvency. Company
collapses are at record levels, which has forced the thorny topic of pre-packs
out of the shadows.

It’s no secret to the profession or Jones, who says: “I know everything ther
e is to know about running a business”, when we ask the extent of his knowledge
on the practice. “I think it’s like any level of protected law that has a
structure. It’s always going to open itself up to a certain level of abuse. For
me, as an acquirer, I’m going to be very, very careful. The good option for me
is to make sure when I look through and see what I see, I might decide that the
pre-pack is the best option for me because I’m going to have protection and set
up my ‘Newco’, and I’ll have protection over essential issues.”

The stigma attached to the insolvency process comes from the lack of
communication to the parties involved with the stricken company, he believes.

Pre-packs have been around for 25 years and they’re hitting the headlines
because clearly there is a certain element that’s questionable over its misuse.
We’ve got the insolvency body that’s come in and said ‘we recognise it’s open to
misuse, we need to put some things in place here’ (measures which are “probably
not good enough”, Jones believes).

“But if I was sitting on the other side, I’m now a shareholder in a company
that is in trouble and somebody’s coming in to offer money and it’s on the basis
of a pre-pack and I’m not really informed, I’m going to be annoyed. It’s the
lack of communication to creditors which is absolutely crucial if we want to
change the myth of ‘ was that company sold too cheaply?’

“If we really want this to work, go and get a third party respondent to come
in and see whether that value’s good. If they come in and say, a good job’s been
done, then the creditor would say ‘I’ve got X back in the pound and the business
is still going’.”

Jones also urged SMES to consider automating business processes like customer

care, marketing and finance using software that will allow them to operate

faster and more effectively.

“Moving finance online will help users to be more productive and redress an
often dire work/life balance,” Jones says, flagging up BT Business’s Xero
application, which provides 24-hour online access to bank transactions.

Putting troubled businesses to one side for a moment, Jones considers the
climate for those budding entrepreneurs hoping to follow in his footsteps. They
will have to negotiate the choppy waters of the UK’s tax system, but Jones
believes the lack of skills is even more damaging than an oppressive fiscal

“There’s a skills gap in this country. We have to teach our young people and
give them the skills to be entrepreneurial. Our tax system will almost not be
relevant because we will force ourselves into a very positive environment in
terms of cash coming into the economy and investment going forward.

“I think our tax system at that point would still make it very compelling to
stay in this country. We’re still a top five economy in terms of our business

“Change the skills that are being taught and fill the skills gap and, I
promise you, you’ll never ask me again about a question over tax in this

On a personal note the multimillionaire says he won’t be following Lewis
Hamilton’s lead and taking up residence in a tax haven, despite the crackdown on
the super rich. “I love the UK too much, Jones says. “My children and family are
here. At the end of the day I’m in the tax system and I love what I do.”

“I’m probably saying that it’s not about the money – of course it’s about the
money. I don’t go to work to lose money – but at the same time it’s not a major
Jones’ “major driver” is variety.

“I’m on TV one minute and investing in a company the next. For me I don’t
even question it. I’m UK born, UK bred. Cut me in half, I’ve got the Union Jack

Peter Jones is championing Small Business Week 2009, in association with
BT Business. The event is taking place from 19-23 October, where a range of
government, business and independent organisations will come together to
celebrate and support the country’s 4.7million small businesses. The agenda for
the week will be set by the 2009 Business Pulse ­ one of the UK’s largest ever
surveys of smaller enterprises.

Mid-tier vs the Big Four: no contest

“We should be careful not to let accountants run away with their own thoughts
about the level of value they provide in the community and the jobs that they
do,” says Peter Jones.

He engages Grant Thornton as auditors and has done so for “many a year”. “I
continue to use them because they are extremely good at making sure every level
of detail across all our accounting systems are not just proven and ready, but
they are solid at the level of reporting.

“When our management accounts are produced and verified we have a very
thorough look at the detail against the financial accounts that we provide in
our annual statements at the end of year.

“I have a slightly different view of what the accountancy profession is there
to do. For me it isn’t necessarily a consultative business.”

He’d rather bring them in on specific issues such as the way they might help
with tax benefits. He’s not exploiting loopholes in the tax system, he quickly

“The tax [regime] has been put there for a good reason, and we need to adhere
to it. Also we need to find the most tax effective [strategy] for our reporting
mechanism and our financial results.

“What I want to do is phone my firm of accountants and say ‘I need some
specialist advice in this area’.”

“Why I like Grant Thornton is because it isn’t always about them. I think
accountancy firms have to look at themselves and ask what they are providing of
value and how do they scale that value?”

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