London Loves Business
Would he be the next dragon on Dragons’ Den?
Company: Owner of REL Capital / REL Group
What it does: REL Capital Ltd purchases established and distressed UK SME’s in a number of sectors and REL Group is Andy’s property trading company.
Founder/s: Andy Scott
Size of team: 100 +
Your name and role: Chairman and Founder of REL Capital and REL Group Ltd
Two reasons you should be watching Andy Scott:
- Due to his experience in investing, owning businesses in multiple sectors and success at an early age, Andy is tipped to be a strong candidate to become the next dragon on Dragons’ Den,when a seat becomes available over the coming seasons.
- Andy is a prolific dealmaker and investor buying in businesses and property over 5 different sectors.
You are popularly dubbed as the ‘Doorman turned dealmaker’. What is your growth story?
I started working on the door of large nightclubs aged 16 but the entrepreneur in me soon began looking at other ways to earn a living. I purchased my first run down house aged 18, with £5,000 left to me by my grandmother and that ignited my passion for property development. I have developed and built over 500 houses and flats across the UK and expanded into hotel groups, bar chains, including owning 1 Leicester Square, the West End’s biggest venue. Away from real estate, I purchase established and distressed UK SME’s personally and under my company REL Capital and currently own several businesses in the leisure, events, recruitment and transport sectors.
How do you make your millions? Who’s bankrolling you?
I did well in my 20’s from the property boom but got wiped out losing £6m in the Global financial crash all before turning 30. I literally had to start again from nothing, going back to working on building sites. I got some funds together to start property trading and I was off again, but it was a long slow painful journey. I took each day at a time and never gave up. God loves a tryer is my motto.
I bank with Coutts + Co, having a funding line with various development lenders. Funding for trading businesses is tough which is why the profits from real estate projects fund the purchase of all my new trading businesses for a long-term hold.
What advice would you give other disruptive entrepreneurs trying to secure that kind of finance?
I would recommend the EFG schemes through various lenders backed by the British Business bank which the Government guarantee the lender 75 per cent of the loan, as they are priced very sensibly. Unless you have a track record, a complete vanilla deal, often requiring asset backed security, I don’t believe the clearers (high street lenders) are in the market still, hence the massive rise of Private lenders, peer to peer and crowdfunding platforms.
My general advice would be to make sure you have a business that you have a passion for. Us Entrepreneurs are typically not detailed people, and you will invariably make expensive mistakes in the first months or year, and that passion is needed to stick at it, and prevent you from throwing in the towel.
What do you believe is the key to growing your business is?
My business model is quite simple to grow my portfolio of companies. The 4 B’s
- (B)uy in at the right level with a flexible deal. Spread the cost over a couple of years. I buy in at between 2-3 x multipliers which gives a 33-50% ROI if you keep winning
- (B)uild a great management team who have a vested interest, build sales and control costs
- (B)olt on other acquisitions with synergies as this rockets growth and have a plan to scale the combined business
- (B)ugger off to the beach to clear your head! You should be working on the business, not in the business. Use the time away to work out how you can repeat the above on the next deal
What metrics do you look at every day?
I am a numbers man. I have a finance director, finance managers looking after each business, accounts assistants, credit controllers and an in house lawyer. I get numbers weekly if not daily on the different businesses and ensure the Managing Director or management team are rewarded so they have a share of the upside, we look for long term partners rather than employees generally. I monitor every business going into administration daily to see if it is one I can swoop in on and rescue, buy assets, or part of the business. That’s the fun part for me.
What’s been the most unexpectedly valuable lesson you’ve learnt so far?
When doing deals, get into the mind-set that they will be the first of many with everyone you meet. Always be remembered for being the pain free businessperson who does what they say they’re going to do. You will ensure you are the first in people’s speed dial when they have an opportunity, as they will see you as an easy fee and win for them, knowing you get deals done quickly. Trust in good people until they let you down and don’t micro manage. I have the same partners who are close friends for 10-20 years. You can’t put a price on trust when you work remotely.
What’s been your biggest mistake so far?
I had over £10m of debt when the credit crunch hit. Banks were throwing money at people through my 20s, and I hadn’t seen any previous economic cycles. I had all the toys, 2 Ferraris, a plane, superyacht and when the music stopped, I was left with my trousers down. I remember putting all the above into a spreadsheet and weighing up my options, it all had to go.
I am much more frugal these days, I don’t have credit cards, don’t use overdrafts, don’t live beyond my means. It dawned on me that without savings, if you miss 3 months mortgage payments you could be homeless. Losing everything teaches you to be more humble, gracious and respectful of everyone.
Do you have any expansion plans?
As a dealmaker you don’t see expansion, just onto the next deal, its non-stop. I’m always working on 10+deals. I have recently bought a group of 12 x development sites, I have 50 homes in planning, with our in-house architects and planning team. This occupies a lot of my time ageing and stressing me the most. I campaign for improved and relaxation in planning laws if this Government wants to hit housing targets and build new homes.
Additionally, I bought 5 trading companies in 2017, I should do more this year. I have a Chelsea Pub completing in a few days, a bolt on transport company in 10 days, and a recruitment company next month, so I don’t know any other way other than to keep doing deals. You can’t stand still. I love it.
What do you think is on the horizon for your industry in the year ahead?
I am just completing my home in the South of France, which has been converted and extended from 4x apartments over the last year. I am excited to finally have somewhere I can call home rather than be a global nomad. For selfish reasons I was hoping Brexit would be a little less smooth than it has been to date, in the hope of more distressed opportunities and people needing to sell, but my prediction is of more of the same, and Brexit in name only.