Patience has its rewards

Very few business plans survive their first interaction with the real world,’ says Luke Johnson, whose own ventures have ranged from Pizza Express to fresh fish distribution and the UK’s largest chain of dental surgeries. ‘Entrepreneurs have the advantage that they can adapt swiftly — “pivot”, as they say in Silicon Valley — to satisfy real demand, or improve their product and its distribution. Bigger companies find it much more difficult to change course in that way.

‘I’m a great believer in incubating a business quietly: pivoting it until the model works. Maybe I’m unconventional, but I believe raising money too early — through crowdfunding, for example — can be a dangerous thing. I’ve seen it too often in the chain restaurant business: you open a couple of outlets, raise money, then open a whole lot more before you realise your concept doesn’t work at scale. It puts you under all sorts of stressful obligations, whereas the discipline of scarcity of capital, relying on retained profits and borrowing, can be positive because it forces the entrepreneur to be more ingenious.