Make what you love into a business
In the shadow of a clever older brother, Mike Clare was driven by an independent streak and a capacity for hard work. Mike tells Smith & Williamson’s Hall of Fame about his early desire to run his own business, which started with a sofa bed shop that became retail giant Dreams.
Mike’s older brother had set him a tough path to follow – six A Levels and a place at Cambridge. In contrast, Mike wasn’t academic and didn’t go to university. He admits he was also a little wayward in his youth, particularly after his father died when he was twelve. He had an early sense of wanting to forge a different path and not to rely on other people.
After High Wycombe College, he went to work in a general furniture store, where he was put in charge of the bed department. It was his first foray into retailing and he was pretty pleased to get a company car. On the side, he tried all sorts of business ideas. He was never short of plans, but none took hold.
In a now-or-never moment, and encouraged by his wife, he took out a loan of £8,000, to add to savings of £4,000 and another £4,000 on a credit card to start the Sofa Bed Centre. His wife thought he should ‘get it out of his system’ as it would become harder later.
“I risked everything. If it hadn’t worked out, I would have lost my home, but unless you take a risk, you don’t get up at 6am and do the paper work. I needed to make sure I didn’t fail.”
The group’s first home was an old motor parts centre in Uxbridge. It was in a terrible state and smelled of oil and grease. However, it meant it was cheap. He redecorated it for its opening in the summer of 1985 and it was an immediate hit. Solid local press coverage helped him to bring in £30,000 in the first month. Sofa beds were cool and Mike rode the wave.
Within three years, he had three more stores, but realised he wasn’t going to realise his long-term ambition with sofa beds alone. He reasoned that people would spend a third of their life in their bed and they were a whole lot easier to fit in the delivery vans than sofas. ‘Dreams’ was born.
His roll-out strategy was simple: “I’d find a store I liked and negotiate a lease with the landlord. Then I’d put an advert in the paper for some staff, put in the beds, have a grand opening, invite the mayor, have a cake in the shape of a bed.” He put every ounce of energy and thought into making it work.
There were hurdles. The business was hurt by various recessions along the way, plus fires, leaking roofs and even trespassers camping in the car park. He loved building the business and believes passion is the magic ingredient for entrepreneurs: “Make what you love into a business. The more passionate you are, the more successful you will become. It’s hard work, not sexy or exciting. I’m not particularly clever or lucky, but I have worked really hard.”
The skills he needed changed over the years. As the business grew, he’d be sitting at the boardroom table, negotiating with landlords, doing all the legal matters, managing big advertising campaigns. It is a tough progression, he believes.
Mike eventually sold in 2008. By that point, Dreams was the UK's biggest bed retailer with 200 stores. The deal valued the company at £222m, sold to private-equity firm Exponent. Mike didn’t want to stick around. He sold it on a Friday at 11pm, announcing it to the media at 9am the following Monday. He cleared his office and walked away from the business he had spent twenty years building.
“That was my life. I had a nice big bank balance, so it was quite surreal. But I didn’t know what I was going to do with the rest of my life.” He had a year of not doing too much. He bought a bigger house, a flash car (“I needed to get it out of my system!”). It wasn’t long, however, before he was back in business, buying up historic castles and unusual buildings, turning them into venues with his wife handling the interior design.
Today, he is slowly moving away from that business. Nevertheless, he remains passionate about business and entrepreneurialism and now extends loans to start-up companies. He also is considering a return to his main love and passion, ‘bed retailing.’
Apart from making money, Mike also has a focus on charity work. He runs a charity called the Clare Foundation, which helps charities become more commercial. “The trouble with many smaller charities is that they are ‘too nice’. They don’t write a proper business plan, they pay too much in expenses and administration. If they can lower their admin costs, they could be directing more capital to good causes.”
His advice to budding entrepreneurs? “Work hard and persevere.” He believes that, ultimately, what distinguished him from the competition was his dedication to the business. That, and a good night’s sleep.
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