However, there was a clever salesman’s trick to this arrangement. As part of his sales pitch, Sugar would pretend that he had only one television set for sale, and that it was an unwanted gift to the Sugar family. He would lead punters into his bedroom, where only one set was on show, and then, as soon as that set was sold, he would replace it with a new one, to sell to the next visiting customers. It was a typically shrewd and effective sales tactic. The Maurann venture lasted no more than 12 months, but it was enough to fill the young Sugar with renewed confidence and energy.
Some of that confidence and energy enabled him to resign from the steel firm where he had been working. He remembers that his father was less than impressed by this latest career move. In less than a year, Sugar had gone through three different jobs, while his father had been in the same workplace for a decade and a half. Asked why he quit at that point, Sugar is typically honest and concise: ‘What I was really after was wheels.’ This was no small aim in those days, and, when asked what his earliest ever ambition was, he replied that it was to own his own car. ‘A car was considered to be an absolute luxury,’ he said. ‘Rich people had cars – that’s how you viewed it.’ He couldn’t afford one, but thanks to his spirited, entrepreneurial nature, he wasn’t about to let that hold him back.
So it was that the man who would later own a Rolls-Royce Phantom got his hands on his first set of wheels – a company car as part of the package for his next job. He saw an advertisement from a London electrical firm for a salesman. The firm – Robuk Electrical – was looking to add to its army of salesmen across the country, and it seems that, on applying for the job, Sugar so impressed them that they gave him the task of selling across the capital. Sugar was on the sell and, thanks to the van that came as part of the job package, on the move. It was in this job that Sugar acquired an amazing knowledge of the capital city’s many stores that sold electrical goods, a sector in which he would later make an absolute fortune. ‘They gave me a minivan and, at the ripe old age of 17, I was flogging recorders to radio and TV dealers in north London,’ he said, looking back. ‘Within three months I was the top salesman. I quickly realised it paid to think big. I would talk my heart out to sell one tape recorder to a small shopkeeper. But, using the same energy talking to the chief buyer of Currys, I could get an order for 100 units. So I looked for bigger deals – and landed some great orders.’
Here, though, the arrangement didn’t continue as expected for Sugar. He was initially delighted to be dealing with Currys. Up to then, he had been unable to do so because that store’s managers had needed to contact head office before taking orders for tape recorders. Sugar saw this new arrangement as ‘a licence to print money’. So, when he managed to persuade every Currys store in the capital to put orders in for Robuk tape recorders, he thought he was home and dry and that his commission rate would rocket. ‘Instead of being rewarded, my commission rate was slashed,’ he said. He had been told that, because the Currys deal was a bulk one, his commission was smaller than it would have been for a corresponding deal for the same number of independent stores. After a disagreement, Sugar resigned. Naturally, this latest parting of the ways didn’t go down well at home. ‘Third job over in nine months – the old man was tearing his hair out.’
Not that Sugar remains bitter about this episode – quite the opposite in fact. Like many of those who rise from mediocrity to become accomplished people, Sugar is not only able to shrug off past setbacks, but is also well versed at turning negatives into positives, at seeing how seemingly bad things in his past were actually wonderful things that set him on his way in life. ‘Here’s the payback,’ he said, smiling. ‘Had my ex-boss not been so ungrateful, I might still be working for him today. I can’t thank him enough. He made me determined to work for myself.’ This is the sort of positive thinking and philosophical outlook that got Sir Alan Sugar where he is today. Modern self-help books preach just this sort of positive thinking, although, when he was starting out in business, such books scarcely existed. But then he didn’t need them, because he naturally had most of what was contained within them, and what he didn’t know he could pick up along the way. As he said himself, ‘You can’t learn to be an entrepreneur by reading a book. You can only find out by giving it a try. Don’t worry if you make mistakes because that’s how most people learn.’
He was soon in new employment. ‘My next job was selling electrical goods to dealers,’ said Sugar. His employers were R Henson Ltd, a wholesaler based in north London. Among the products he sold were walkie-talkies, car aerials, clock radios and car radios. He would show these products to retail customers and close the deal. ‘I would talk my heart out to sell one tape recorder to a small shopkeeper,’ said Sugar. Also, as part of his job he had to deliver the completed order and take the payment. Sugar says this job really opened his eyes to the world of business. Soon, frustration he felt with his new employers was to bubble over into another confrontation that led to his walking out.
‘One day I pulled off a great deal on my own initiative,’ remembered Sugar. ‘Instead of congratulating me, my boss told me off for not earning enough money on the deal. That Friday I quit. Fourth job in a year.’ The great deal he was referring to was a pile of records he sold on behalf of Henson’s and returned with several hundreds pounds’ profit. ‘If Henson’s had been clever at that stage, they would have made me a partner of the firm, and it might have been Henson’s -cum-Amstrad by now,’ he said, looking back. But, after his boss told him off for not earning more money on the deal, Sugar felt ‘naffed’. So, off he went again in search of new work. However, although he felt naffed and walked out, he remained in contact with Henson’s and even did business with them after he set up his own firm. The life lesson is clear: look at the bigger picture, don’t be petty.
However, it was a nervous journey home for Sugar. ‘I left the car and went home by bus, worrying what I was going to tell my dad,’ he wrote. ‘At that time he’d been in his job 23 years and was taking home £16 a week. I announced that I had walked out again and was going to start working for myself from Monday. My dad came out with this classic question: “Who’s going to pay you on Friday?” “I’m going to pay myself,” I replied.’ As it turned out, he would make his first batch of money even more quickly than he had dreamed.
Gulu Lalvani was the founder and chairman of Binatone, the world’s second-largest manufacturer of digital cordless phones. A tall, suave and attractive man, he was born in Karachi and raised in Bombay, and he came to Britain as a student. He founded Binatone – named after his sister Bina – in 1958 with his brothers Katar and Partap to import radios from Hong Kong. He has since gone on to become a businessman of some repute, and one of Britain’s richest Asians. Today, Binatone International Limited is one of the largest privately owned consumer-electronics companies in Britain. It enjoys nearly 15 per cent market share in the domestic-telephone sector here. Gulu also plays a major role in Phuket’s high-end property market, having developed the Royal Phuket Marina on the east coast, which features luxury apartments and villas. In 2008, he invested a cool £1 billion in a Thai exhibition and conference centre. But, back then, he was to become a major player in the tale of Sugar’s rise from Hackney to the riches of Monaco.
During his short time with Henson’s, Sugar used regularly to collect goods from Binatone. He would turn up to Binatone HQ in Finsbury Square, in London, and wait his turn at the loading bay. Asked what is needed to form your own successful business, Sugar once said, ‘What you do need is sheer determination. Passion and great personal belief. And a slice of good luck.’ He was about to be served a delicious slice of that good luck. As he queued at Binatone’s loading bay, he got talking to Lalvani, who had already noted that Sugar had more ambition and drive than most of those who queued at the loading bay to collect goods.
Sugar also had an intelligent, enquiring way about him so he already had a firm grasp of how Henson’s relationship with Binatone worked. Henson’s received the Binatone produ
cts on credit, and sold them on for money, a perfectly normal way of doing business. ‘I can do that,’ thought Sugar. But he also believed he could earn four times his weekly salary of £20 if he went it alone. So he bought a minivan for somewhere between £50 and £80 (estimates vary in different accounts of this time), took out £8 in third-party insurance and approached Lalvani with an idea. He would resign from Henson’s and give the Binatone man a postdated cheque. In return, Lalvani would give him goods to the value of that cheque. Lalvani was a little nervous, because he didn’t want to fall out with Henson’s, who might, reasonably, conclude that Sugar had been encouraged to compete with them. Sugar was quick to allay Lalvani’s fears, telling him that he was going to quit with or without his help. As a compromise, Lalvani suggested that Sugar leave a two-week gap between resigning from Henson’s and starting up his own firm. ‘Deal,’ said the 19-year-old Sugar.
Lalvani recalled that his protégé was a very quick learner. In an interview with the Mail on Sunday, he gave his impressions of the young Sugar: ‘Alan used to drive a van for a customer of mine. He would come to the warehouse every day and buy electronics and sell them on.
‘But his boss made a mistake: he let Alan see how much he was paying for the goods and where they came from and Alan knew the customers and how much they were paying. He came to me and asked for £500 credit. It wasn’t difficult for me to say “yes”. I could see he was energetic and hardworking. I told him he couldn’t quit on Friday and start doing business on Monday – he had to wait.’
So, after two weeks with his feet up, Sugar returned to Binatone HQ and swapped the cheque for the goods. This cheque was postdated seven days hence. This meant that Sugar had just a week to shift all the goods, or he was in trouble. As it turned out, by the end of the first day of his new venture, Sugar had shifted the lot – a whole week’s goods in one working day. He drove into the Binatone car park, and told an astounded Lalvani, ‘Give me the cheque back. Here’s the cash.’ The following morning, he returned for more of the same. Recalling how he struck out alone in business, Sugar said, ‘Your average punter sees no further than finding a job and working for someone else. Business is viewed as a risk – and people are frightened to take the risk in case they fail.’ He had taken that risk, and, far from failing, he had exceeded even his own ambitious dreams. He must have been absolutely exhilarated. ‘You will understand the buzz once you have done something on your own. In a funny way, the money takes second place.’
With his new business venture proving a huge success from the start, Sugar could afford to be bullish and confident about his prospects. The world seemed indeed to be his oyster. However, his assurance was not shared by his father, Nathan, who was proving to be rather more cautious. His son’s courage and entrepreneurial spirit soon caused more concern. The clash of personalities was to rear its head again when Sugar’s minivan broke down. ‘It was always in the bloody workshop,’ said Sugar. ‘We needed a more reliable vehicle because that was the lifeblood.’ Too young to sign a hire-purchase agreement, he had to turn to his father for help in getting a new vehicle. However, his father was so concerned about Sugar’s ability to keep up the payments on the agreement that he would sign only on the understanding that he buy the van and ask his son to pay him instead. ‘It was the typical mentality of my father. He couldn’t understand that I’d ever be able to pay the money back.’
He would of course be able to pay his father the money back. And, very quickly, he was earning more money than even he could have dreamed of.
CHAPTER THREE
MARRIAGE
For all his success and the millions he has made, Sugar has always been a family man at heart. He’s firmly of the opinion that the only way to have a successful and happy life is to put your loved ones before your profits. He is a wonderfully loving husband and parent. At his side throughout his remarkable ascent to the top of the business world has been his beautiful wife Ann. After originally meeting her in 1968 through the youth club crowd of Stamford Hill, Sugar soon fell for the charms of young hairdresser Ann Simons. And she for his – though she admits that he was not like most of the other teenage boys she knew at the time. ‘He was completely different from anybody else I had ever met,’ she said. ‘He wanted to work all the time. He wasn’t like an ordinary 18-year-old boy.’
It seems her initial instincts were correct, for it seems there has never been anything at all ordinary about Alan Sugar. Right back then, there were already those hallmarks of ambition, dedication and a superb work ethic that were to separate him from the pack.
However, as the pair’s love developed, there was initially opposition to Sugar from his new girlfriend’s family. They felt that he was from the wrong part of town, but, according to friends and colleagues at the time, this only made Sugar more determined to get his girl.
As we’ve seen, Gulu Lalvani, chairman of the electronics company Binatone, was one of Sugar’s early backers and, in the Mail on Sunday, he gives an insight into the resistance Alan faced from Ann’s family: ‘[A] customer of mine pulled me aside at my warehouse. He was very angry. He said, “See that young man? Tell him I don’t want him to go out with my daughter.” I told him that he had to tell him on his own. Johnny was a good customer. He wanted his daughter to marry a lawyer or a doctor. I told him Alan was a good customer and I couldn’t say that kind of thing to him.’
So, despite these early difficulties, the couple’s love blossomed, and they married at the Central Synagogue in Great Portland Street. An eyewitness remembered, ‘The families put on a good show at the wedding – a clear sign that the Simonses were reconciled to Ann’s choice. It was a very joyous occasion and both families seemed to get on just fine.’
Their first son, Simon, was born a year later. His father was doing very well indeed by this time. At the age of 21, a lot of young people are still directionless, either still in education or in low-paid jobs, often spending their nights out at pubs or clubs, and it is hard to see how they will succeed. However, Sugar’s life was far more dynamic at 21, and betraying more than a hint at the fortunes that were to come for this incredible businessman. Let 1 November 1968 become a key date in the history of British business, as it was on that day that Alan Sugar formed A.M.S. Trading Company (General Importers), and registered it as a limited company. Alan Sugar really was on his way.
As we have seen, to get there, he had overcome numerous obstacles. One of these involved a sharp lesson in the dangers that confront any business. He had been storing his stock in the family home in Marlands Road, east London, but there was no burglar alarm to protect it, and he had no insurance to cover it. With the benefit of hindsight, he admits that this was ‘bloody stupid when you think about it’, as one day a thief broke into the house and made off with all the stock. ‘I wasn’t completely flattened,’ he said, but he quickly made sure that he got his own premises and took out the necessary precautions to protect his assets.
His premises were on St John Street in Islington. It was a slightly odd location. Across the road was the Sadler’s Wells Opera House, and a mere stroll away were trendy eateries and posh antique shops. However, the new Sugar HQ was in an area largely populated by other businesses, their storage buildings and workshops. It was on a busy main road, and generally the area lacked the charm that dominated nearby Islington, but he had a decent-sized premises that could safely store a substantial amount of stock. Next up, he needed an accountant, and he signed up with Guy Gordon, who not only managed his accounts, but also gave him plenty of general useful business advice.
For instance, the fact that A.M.S. Trading Company (General Importers) was a limited, rather than proper, company was down to Gordon’s guidance. He told Sugar that this way of working would mean he limited his personal liabilities, and therefore mean his house and other personal assets would not be at risk if his business got into difficulties. Just as there are things to learn from the nature of the company, so there are from the name he chose: the A.M.S. part was clearl
y formed by Sugar’s initials – Alan Michael Sugar. However, more revealing is that he chose the terms ‘trading’ and ‘general importers’, which suggests that at this stage his aspiration was not to make his own goods, but rather to import them and then sell them on at a profit. Exactly four years later, he would change the name of the company to A.M.S. Trading (Amstrad), although in reality he had been using that name for some time before he technically renamed it.
The name Amstrad is memorable, but Sugar says he simply took his initials, and welded them to the first syllable of ‘trading’. ‘It was more luck than judgement,’ he insisted, adding that a lot of operations back then found their names in such a way. This was, after all, in the days before brand consultants appeared, delighted to charge extortionate fees in return for a catchy title to name your company.
An insight into how hard Sugar was working at this time in his career comes from a man who had his own premises near to Amstrad HQ, on Gray’s Inn Road. Colin Lewin was an electrical trader who shared Sugar’s physical build and much of his up-and-at-’em business style. They became friends and business contacts, swapping electrical products, advice and gossip. Sugar sometimes stopped by for a cup of tea near Lewin’s premises. This happened only occasionally, purely because Sugar worked so hard. ‘[He] certainly put in a good six-day week,’ recalled Lewin. These were tireless times indeed. As well as impressing Lewin with his work rate, Sugar was still very much impressing Lalvani of Binatone. One day, while loading up his van with electrical products that Binatone had imported from the Far East, Sugar learned that the company had taken delivery of a batch of radios that were faulty. He took the radios home and fixed them himself with the help of his wife, working hard overnight, having slogged hard all day. He was certainly a man full of energy and enthusiasm.
Sir Alan Sugar Page 4