Small Business: Serial entrepreneurs - Phil Richards

Phil Richards, founder of eight different businesses.

This week, Small Business editor Caitlin Sykes talks to serial entrepreneurs.

Phil Richards has started eight businesses including a chain of optometry stores, the cloud-based payroll company SmartPayroll, an international butter chicken business with distribution in supermarkets around New Zealand and a chain of accounting practices.

What motivated you to start your journey as an entrepreneur?

In the 1980s at age 10 I read the Rich List and noticed three common things: successful people played golf, were accountants and owned a business. My dad wasn't an accountant and he knew nothing about golf or owning a business. So at 12 I went to the local golf club in Whangarei and started to caddy for businessmen. They paid me $5 and I asked lots of questions about business and then I listened and learnt.

In the mid 80s those businessmen were buying shares, so as a 13-year-old I got my dad to book an appointment with the local sharebroker, Frank Newman, so we could invest too. My profits from those investments paid for my first few years at university and I'm now business partners with Frank Newman in a chain of accounting practices.

I left Whangarei at 18 with two goals: to become an accountant and to get a job on Queen St. After university the largest accounting firm in the world at the time Arthur Andersen - pre- Enron - offered me a job on Queen St and I ended up doing corporate finance work and helping companies and people buy and sell businesses. I used to see everyone working really hard in their corporate jobs, with no work life balance, and it wasn't a future I wanted. Plus I knew nobody on the Rich List had a job. I realised then I had to have my own business.

How did you start your first business?

My wife Michelle was an optometrist so at 26 we bought an optometry shop, which we grew into a small chain in our twenties. I used to get such a buzz out of helping people see better.
I saw that by going into business I would be able to help more people; I could have fun and make an impact. Business is really creative and I love doing the all the innovation, strategy and marketing side of things and getting other people to do what they're great at so I only have to do the bits I enjoy. It's not all about the money.

Your businesses seem diverse. What are the commonalities you look for in a business opportunity?

The first is product/market fit. I'll ask 'is there a big problem that needs solving for a big market, what are the needs and pain points in that industry, and are the customers getting their needs met?'

The second is the business model. I look for opportunities where I can do the work once and get paid forever. I like products and services that are predictable, and we've invested in food products, accounting, medical retail, petfood, payroll and HR and financial services because these are all stable markets with regular demand.

Next is scale and distribution. I like businesses that I can scale and grow quickly and easily and I always ask myself how I can get maximum leverage to grow my business the fastest way possible.

The fourth is people, team and culture. I like simple businesses where I can build a strong culture around what we do. I used to be a terrible boss in my twenties - I was just too naïve and stressed out with the pressure I was putting myself under - but now I think I can take a step back and really work with my team and help them, because I understand they're the secret to the success of the business.

The last thing I look at is exit opportunities. I always ask myself 'can I sell this business for a lot more money that I paid for it and what do I have to do to make it worth more? Or if I don't want to sell it can I put in management that doesn't require much of my time and just hold it?'

Do you see more ventures in your future?

I have one big business dream that I'm still really juiced about; I'm putting the plans together for a new company that will help employees achieve financial success and happiness. I want to make a difference in the lives of these people and their families. Also, ever since I read those company reports as a kid I've wanted to list a company that I started, and be the CEO of it. Because I have a short attention span I'm always searching for the next business thing to learn about.