Lara Morgan

Building on a family tradition of entrepreneurship

Lara Morgan started her first business in 1991 aged just 23, building on a family tradition of entrepreneurship. She ultimately sold Pacific Direct Ltd for £20m in 2008. She talks to Smith & Williamson about her path to success.

HOF Entrepreneurs Lara Morgan 1920X1080

Lara Morgan started her first business in 1991 aged just 23, building on a family tradition of entrepreneurship. She ultimately sold Pacific Direct Ltd for £20m in 2008. She talks to Smith & Williamson about her path to success.

By rights, Lara Morgan’s early experiences of entrepreneurship should have put her off for life. While her boarding school peers were dressed in designer kit, she had to make her shoes last five years as her family’s business struggled.

Nevertheless, it proved to be the perfect grounding for success. Her parents were wonderful ‘leaders by example’, teaching her the value of hard work and the importance of budgeting. Travelling 27 hours to get to school in Scotland, at the age of 11, while her parents stayed in Hong Kong, also built some resilience and a certain knack for speaking to strangers.

“In the school holidays, I would stay with my Aunt – my parents often couldn’t afford to fly me home – and she used to do market research. We’d be on the streets of Croydon, encouraging passers-by to do our survey.” This required some courage and chutzpah that also proved valuable.

Eventually, her father went bankrupt and her grandparents paid for her to return to Hong Kong, where she paid rent to her parents. At age 18, any plans to go to university were shelved. She had to get a job quickly.

A sales career beckoned. She sold promotional products in Hong Kong – including umbrellas and key rings. It was a formative experience, teaching her about pricing, design and artwork. “There is an awful lot of luck in business and that certainly played a role for me.” She left Hong Kong to go to the Middle East with a boyfriend. There was no work there – it was in the middle of the last recession – so she decided to make her own job: “I had to make something and sell something; otherwise, I’d have starved.”

This was the start of Pacific Direct. Lara spent two lonely years building the business. She set herself a series of internal targets - for example, no coffee until she’d made 100 calls. This helped her get through the early years of rejection. And there was a lot of rejection. “I had to take it on the chin and then go and do it again. In this way, a sales background was so useful and gave me staying power: it took me nine months to get my first order. With each call, I honed my sales pitch, I became better, more fluent, more persuasive and people took me more seriously.”

After two years, the business was in a position to hire. Lara found “the second loudest person on the hockey pitch – I liked her and felt she had guts”. She also employed a qualified town planner and finally had a small team to rely on: “They sold every hour available. Saturdays and Sundays were for admin. They were in touch with the customer anytime the customer was available.”

Turnover rocketed – from £108,000 in the first year, to £360,000 in the second to £880,000 in the third. Strong cashflow meant they didn’t need external financing. They structured flexible finance terms with the supply chain, so they could grow together. She paid herself little, less than some of her employees.

At some point, however, she started to see cracks appearing. Having grown Pacific Direct with no specific direction, she needed to formalise the business and write a business plan. She felt over-stretched and was running out of cash. She attended the Business Growth Programme at Cranfield and it proved transformational.

There were still road bumps along the way. In the wake of the 9/11 attacks, Lara nearly lost everything and her house was put up as collateral. She had two small children at that time and chose to have the conversation with her husband after the event. He has forgiven her and got a far bigger house in the end!

The Cranfield programme showed her she had to “grow up as a leader and become a better performer”. She put in a proper management structure and ensured the business had different skillsets in place. “I couldn’t fake it. I went to market in 2007 and sold to a private equity group in April 2008. I stayed for a year and then left the business, making sure I was paid in cash.”

Before she exited, she put herself in the position of a buyer. She recognised that she would only exit once and that exiting in the right way should be a job in itself. It was an £18.5m turnover business by the time she left, selling in 110 countries.

Having left, Lara wanted to help other companies get off the ground. She says: “I asked myself could I have an impact? What could I do next? Mentoring was key. My expertise is as a salesperson so I started to work with a little group of companies.”

She has now gone back to sport, an early passion. “I’m also into health and wellbeing. I was always an enthusiastic sports person,” she says. “I didn’t always win but I really tried my hardest – lacrosse, squash, swimming and running. I was 10th in the world at triathlon at one point.”
Lara says building a business is not for the faint-hearted and can be tough to combine with family life, but it can be done: “Entrepreneurship is hard work. It’s even harder with a family but it is possible if you are realistic about your skillset and don’t try and do everything.”

 

 
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