Some people just get lucky; they just stumble into something that is perfect for them: the timing is right, they get a lucky break and they are successful. But we've established by now that luck is not a career plan. You can't say, “I'm going to pay my bills by buying a lottery ticket every week!”
It can also be dangerous to look at someone who got lucky and think that you can emulate that person. If you don't get the same breaks, you could end up very disappointed. For inspiration, look at people who have been successful through hard work and dedication, rather than people who got lucky. Do your research on life's workers, not life's “lucky people”, because there is a formula for success, but there is no formula for luck. I've watched people look at someone who is successful and think that they can follow their success, but person A's success was based on luck; when person B doesn't get that luck, they fall flat on their face.
I believe that you will always work harder for your own money than for someone else's. But the rewards, when they come, will always taste sweeter. We have heard many stories of people who win huge sums of money on the lottery but then burn through it, spending it on badly planned businesses or overpriced luxury items. Often these “big winners” create a lifestyle with huge overheads and yet they are not generating the income to finance those expenses. Once the original lump sum of capital runs out, they end up with bills they cannot service and plunge into debt.
People who make a million know how to make another million, even if they lose it all suddenly. People who win a million will find the same strategy (buying a lottery ticket) is unlikely to work twice!
I can tell you, from first-hand experience, that nothing in my professional life has come close to the immense joy and satisfaction I've felt from building a successful company from the ground up, with no outside investment until it had grown to a very substantial size. When you get it right (sometimes after years of trial and error), when you make the right choices for you and you really put in the hard work… that is when the results are the most rewarding.
Building a business is always a marathon, not a sprint. I started my company with an outlay of £15,000 that my initial partner and I put in between us. Until just recently, apart from another £30,000 that our third director put in not long after we launched, I never took another penny of outside investment as I built my company.
The seed idea for the company was mine and evolved out of the frustration I was feeling with mortgage brokers at the time.
I had been building my property portfolio for several years and every time I had to get a mortgage (specifically a buy-to-let mortgage) for a new property, I had to go to my mortgage brokers. I chose the product I wanted and then instructed my broker. I decided what my brokers should do, when they should do it and how they should do it; then they had to implement everything by submitting my application. I did most of the legwork and yet they took a fee for filing the application. Not only that, they took two fees: one from me and one from the lender.
I gradually got fed up with brokers who didn't call me back. I constantly had to chase them. And if I called the lender myself to ask about the progress of my application, I was told they couldn't speak to me – only to my broker. I got sick of paying someone for a service but doing most of the work myself. I decided I could be the middleman myself – and offer a better service.
I often say to my team: “Don't be the kind of mortgage broker who inspires another Ying Tan. If you inspire someone to go off and set themselves up as a broker, because they feel they could do a better job that you're doing, then you haven't given them a good service!”
As a property investor, you can go straight to lenders yourself, but then you can only look at that lender's products; they can only give you advice about their own mortgages. Mortgage brokers, on the other hand, can access all the lenders at the same time and compare every product. This is particularly important for buy-to-let mortgages, which are specialized mortgages because you are operating as a business and working on tight margins, so it is particularly important to get the best one for you.
I could see this was an excellent niche service for me to get into. So, having been a full-time landlord for four to five years – which I did after quitting my job in investment banking in 2001 – I decided to train and set up as a mortgage broker.
In the summer of 2005, after a lot of consideration and reflection, I took and passed my CeMAP exams, the qualification you need in order to broker mortgage products. They weren't too tough, especially compared with my accountancy qualifications, but they took up a lot of time. Then I did a lot of customer research and piloted my service by arranging a few mortgages.
In February 2006, I launched my company, The Buy to Let Business.
I knew I was taking a real risk. Most people who set up as a business have performed the service or trade they are selling for a few years. Yes, I was familiar with mortgages and was a qualified accountant, so I was comfortable crunching numbers, but I had never worked as a broker before. It was like going back to school. On the fast track! However, I had faith that all my high-level experience in banking, plus all the dealings I'd had with mortgage brokers – as a customer – would count in my favour.
I was excited about my potential, and in fact I saw my relative inexperience in the trade as a possible bonus. The advantage to having never worked directly in a trade before is that you have a completely clean slate. I was able to decide exactly what kind of service I wanted to provide and focus on that vision as I built my business.
I started with just one business partner, someone who had worked at Deutsche Bank with me. He had a large property portfolio – both residential and commercial – and had left the banking world a few years after me, also in order to become a full-time landlord. He was ten years older than me and I valued his additional experience in many areas. He became our Financial Director.
A third director, a Sales Director, joined us after a few months and invested an additional £30,000 into the business. He quit his job as a Senior Sales Director for another company, which was a big risk for him, so there was a lot of pressure on me to make the new venture work. I sold him on my vision; he bought into it and was prepared to support me. He had just got his MBA, so he was excited to take on a new challenge.
So, we weren't your average collection of company founders. We were two accountants and a new MBA graduate, none of whom had actually worked as mortgage brokers before! We all had our own property portfolios, so we were familiar with a range of mortgage products, but we hadn't ever provided the service we were planning to offer. However, as three customers of the service we were planning to provide, we were coming together to offer what we knew we wanted ourselves.
We were typical entrepreneurs, taking a calculated gamble with something we believed in.
Our first office was in a business centre in Guildford. It only had room for two desks and had no natural light. I also worked in the evenings and weekends from home. I worked harder than I'd ever worked in my life during this period. Every day, I worked from 7 am in the morning until late into the evening. We were all taking a minimum salary (we paid ourselves the maximum you can pay yourself as a company director without paying tax), which was around £6,000 a year then (it's around £10,000 now). Obviously, we all had some income from our rental properties as well, but interest rates were still quite high at that time and so we were all juggling our finances.
This was one of the toughest times of my life. Samantha and I were waiting for work to be completed on our new home; after a lot of expensive renovations, it had flooded just as it was about to be finished, so we were “camping out” in a small rented house. Brandon was still a baby. The new home was drying out with a load of dehumidifiers (I often had to go and work there in the evenings). With all that pressure of having a family to support and a new business to build, plus big expensive repairs on a new home… I soon discovered that the entrepreneurial life is not for the faint hearted.
When you work for someone else, you can leave your work in the office. When you work for yourself, you are never free of it; it's in your head, 24/7. The responsibilities are all-consuming. You never stop thinking about what you have to do, and how you can improve what you are already doing. It's very difficult indeed to switch off. But if you enjoy what you do, it never actually feels like work, no matter how exhausting it gets. Trying to become successful at something you don't like will eventually burn you out. However, when you love what you are working towards, the work just inspires you to keep pushing forward. It's hard, but it doesn't feel like it's a chore. You get a buzz from doing it. Even after 13 years doing what I do, I come into the office feeling excited, with a spring in my step. I love coming to work every day because I love building a successful business.
You don't resent the input if you love the output.
We were a good team, my two fellow directors and I, and we ran the business very well. We started to grow and were soon able to take out our £2,000 in dividends per month (again the amount just under the tax ceiling), which helped ease the financial burden of supporting my family. The good thing about a service-based industry is that the operational costs are quite low. To begin with, it's just you and a computer. However, in the middle-to-end of 2007 the credit crunch hit; and it hit us hard. We stopped paying ourselves, we had to move out of the larger offices we'd rented, and it all started to get very tough.
Around the end of 2008, we had a vote – the two other directors and me – as to whether to stay in business. I voted yes; the other two voted no. My Financial Director left after this. He didn't feel it was fair to work so hard without getting paid. I understood his decision. On a personal level, he had bigger overheads than me, including older kids in private school. He had also lost faith in my vision, so he couldn't keep working towards it.
I managed to persuade my Sales Director to stay on for another year or so, but eventually he, too, left a couple of years later in 2011.
From 2008 to 2011, I didn't pay myself a penny. But all storms come to an end and by late 2011, the market was starting to pick up. I worked harder than ever over the next few years. Part of this was on building my brand. I ensured my name was known and valued in the industry. I built up a good reputation. I had to network hard to do this, attending occasions such as awards ceremonies and sporting events. It sounds glamorous but you can't just let your hair down and have fun on these occasions, you are there for work, to meet people and impress them.
As I was building the company, it never really crossed my mind to get investment. Back then there wasn't the big obsession with finding angel investors that there is now, with programmes like Dragons' Den and government schemes like the EIS (the Enterprise Investment Scheme) and “crowdfunding” campaigns making the headlines. If you wanted investment, it was a lengthy, complicated process of putting together very formal proposals for venture capitalists, and you had to have a substantial valuation.
We built the company on hard work and investment in people. As soon as we could afford to, we recruited new members of staff so that we could keep scaling up. This is the same concept as someone having taken as much of their pay cheque as they can, every month, and using it to grow a fund to invest in. The bigger the fund, the more you can invest, and the more dividends you get to reinvest. Like that person, we made sacrifices. We didn't take holidays for years. We took time off, of course, but we didn't go on luxury holidays. We didn't eat out in restaurants; we didn't buy fancy cars. I know that people suffer far more hardships than not having holidays, nice cars and meals out at restaurants, but everything is relative. For the amount of work we were putting in, in terms of hours and effort, it was hard going without immediate rewards. But it was worth it in the end. We were very careful with how we spent our money and that was how we kept the company going. To have grown the company to be worth tens of millions, from scratch, is highly rewarding.
When you spend your own money on your own project, you are also very careful to protect it in the long term. One thing that was always key in my mind was protecting the reputation of myself and my company. This gets more critical and difficult to control as you take on more members of staff. Your reputation then rests on them, so decision-making becomes all-important. I always applied the same rules to my team as I applied to myself. You work hard to earn the rewards. When many of my longest-serving members of staff started, there were no perks and benefits like nice break-out areas and fancy kitchen gadgets in the break room. My long-serving staff members tend to appreciate those benefits more than those who have only been with us a short time and have always known them to be there. But I do warn them all: if you take these benefits for granted, if you don't value them and take care of them (if these areas are left untidy and equipment is not used properly) you will lose access to them.
Everyone has more appreciation for things that they have worked hard for than things they have just been given freely and have always taken for granted.
I'm not saying it's necessarily a bad thing to get massive investment to grow a business. It's just a different way of proceeding and there are pros and cons to both. I meet people today who get a huge injection of investment and say, “Well, if it doesn't work out, I've lost nothing myself.” And a big pot of cash may allow them the freedom to take greater risks, to get places quicker because they are not afraid of losing money. It's just a different way of growing a business. I knew that I needed “skin in the game” because I cared so much about my vision. I knew the specific business I wanted to build, and I wanted to stay in control of that and not become answerable – at an early stage – to outside investors.
Ironically, I benefited from someone else's different attitude to building a business because it was one of those companies – that had grown rapidly through a massive injection of capital – that gave me my first opportunity for massive growth through acquisition.
In 2012, six years after starting my business and having recovered admirably from the credit crunch, we were offered the opportunity to bid for a competitor, which was a Southampton-based mortgage brokerage (specializing in residential mortgages), because it was going into receivership. They were a very young company that had received a £1.5 million injection of cash from a Dragons' Den-style bidding event. They had burnt through the money rapidly, buying expensive office equipment and offering “silly” salaries before ensuring that they could generate the revenue to maintain that level of spending. (Much like that million-pound lottery winner who doesn't work out how to generate the income to support their overheads and burns through their capital quickly.)
Until this point, I had stayed very focused on our niche market – the buy-to-let market – but the acquisition of a company with a different offering would give us the opportunity of expanding into the residential mortgage market.
We put in a sealed bid of £88,000 (because 8 is a lucky number in Chinese culture) and won! The investment immediately paid for itself because it gave us some excellent assets (including fancy servers and IT capabilities) and a whole new sector of pipeline business. Some of the material assets we acquired included these beautiful ergonomic office chairs (the extravagance of these company directors ended up being our gain!). There were 30 of them in total and I still have one in my office. I think they were originally bought for around £1,000 each. I was stunned by the decision of someone starting a new company to choose to spend £30,000 on top-of-the-range office chairs, but I can't complain as I still have mine and thoroughly enjoy it!
The story of the company we bought, compared to my story, is a cautionary tale against overspending seed investment. Because they didn't grow organically, they got trapped in a position where they could not maintain their overheads. On paper they looked very similar to us, with good assets… but those assets were bought rather than earned, so there was no foundation to hold them up, no depth of structure. That's the only reason they went bust. I was very fortunate to get the opportunity to pick up those remaining assets and the brand name. It gave us a good umbrella under which to expand into residential mortgages. But I only did it because I believed it was the right time for me to expand, that I had the experience and structure in place to underpin this new venture.
I felt bad for the owner but he only had himself to blame. He made a choice to pay himself a big, six-figure salary out of that investment. He had the funds to finance it for a short time, but not the revenue to continue supporting it. He took the rewards without putting in the hard work. He was more greedy than ambitious. Yes, he was prepared to work hard, but he paid himself ahead of doing that work instead of as a result of that work. He had a good run at it, but it was short-lived. He lost everything in the end. However, his loss was my gain.
You can always entice people with huge salaries, but I would rather build a team of long-serving loyal members who share my vision. Some of my most senior managers today started out on fairly low entry-level salaries, but they have worked their way up to being very well paid. For example, our IT Director, Mike, started out on a modest salary in the IT department in 2006 and has been rewarded for his loyalty, growing with the business. He has been an invaluable asset in our success as so much of our growth has been dependent on keeping up with the digitization of our whole business. I am also now able to take a salary myself that is commensurate with the effort and experience I inject into the company on a daily basis. I underpaid myself – sometimes not even paying myself at all – for a long time. The first director who left wasn't willing to do that, and the second director I had to buy out, but in the end it all worked out for the best because I had always wanted to own my own business outright; it was always a slight compromise to have partners. It was good to have the other two with me to start with, to thrash out ideas with, but they lost belief in the business. I was Managing Director; it was my business and I never lost that belief. Indeed, the passion and the vision have never left me. I wouldn't have got through the hard years without that belief, passion and vision.
Obviously, I didn't sit down every day saying, “This is all going to be fine.” I had plenty of times when I had to question myself and challenge myself. When you are on the path to creating something big, and you are taking risks, you question yourself time and time again. You need to do that; to better yourself and to grow the business.
We love to romanticize success. Every “movie hero” seems to have a special talent – and seems to have acquired that talent without any hard work. Well, you may not have seen the hard work (because that's often not the interesting stuff) but that's not to say it didn't happen. Every “genius” worked hard. Mozart may have been composing as a child, but only after endless hours spent learning the piano. And even Mozart had setbacks. You couldn't describe his career as a “smooth path” just because he was so gifted.
The Beatles were highly successful and prolific songwriters. But they didn't suddenly start writing perfect songs one day without putting in hours and hours of hard work. They played for years in Hamburg as unknowns, giving them time to hone their craft. Malcolm Gladwell mentions this in his book Outliers. He suggests that it takes 10,000 hours to become an expert at anything. Some people have criticized Gladwell because he just “states the obvious” but sometimes it needs to be pointed out; not everyone sees what is blindingly obvious! And people don't tend to share their failures, and years of hard work, as readily as they share their successes. When you don't see the work that goes into someone's success, when you don't see the years of failure and disappointment, or the endless hours of training, you get a false sense of what “talent” can achieve… it looks like talent alone, when it's really talent plus hours and hours of painful hard work!
In other words… often, what looks like “luck” is actually a huge amount of hard work. So, when you think someone has been lucky, question whether you are seeing the full picture. Maybe you just can't see what they put in to get to where they are.
I've seen successful mortgage consultants who've come from all walks of life. The ex-policeman has little in common with the former banker or the waiter, for example. The only thing they have in common is that they all put in the hours and the hard work; they have all taken the knock backs and stuck it out. Others come in who don't have that attitude; they think they can get by on a bit of luck instead of hard work, and when they don't get the results they want, they swiftly move out of the business.
When people in my company put the hours in, they will get the rewards. It's not about where you come from or what opportunities you had growing up. I think a lot of people use their background as an excuse because they are afraid of hard work. They say, “Oh, I didn't have a good education, that's why I'm not successful,” or “No one gave me a break, so no wonder I didn't get anywhere in life.” But the opportunities are everywhere when you live in a free country; you just have to roll up your sleeves and do the hard work – every truly successful person I know has done that. Are they “lucky” or did they make their own luck? I say to my team, when they get a customer who takes a mortgage: “Is it just luck that you got that customer, or did you create the opportunities to ensure that you got that customer?”
Opportunities are everywhere, but you have to take them! And then you have to work very, very hard to turn those opportunities into successes.
Big success is always about taking the harder path. It would have been much easier for me not to have started my own company, or even invested in property. I would have had an easier time if I'd just stayed in my job and worked my way through the world of investment banking. But I actually saw that as the bigger risk; I saw the perceived security of that as slightly illusory. Why would I want to plant my fate entirely in someone else's hands? If I'd relied on my “safe job”, what would have happened if, during the credit crunch, I'd gone from a nice package with a six-figure salary and endless benefits to nothing, as many people did?
And in the end, success is completely relative. Everyone starts from a different point in life.
My parents may have worked hard just to survive. They may not have built a multimillion pound business, but relative to where they came from and compared to what their parents managed to achieve, I consider both my mother and father to have been hugely successful. They moved to a new country! The easier option for my father would have been to stay in his village in Malaysia, but he was ambitious and driven. He was prepared to take the risks and put in the hard work, and what he achieved was fantastic – and beyond anything his parents had achieved.
In this respect, I do sometimes worry about my children having too much security. What drove both my father and me was a desire to achieve more than our parents had before us. Will my children have the same motivation that I had? I hope they do. I've encouraged them to work hard. The first thing on my mind when I turned 16 was how I could earn money because I dearly needed it. Even though my children don't technically need it, I've tried to encourage them to experience hard work. I've brought Brandon and Ryan into work with me during their school holidays, to get some work experience. And when Brandon asked for money recently, I told him he could sell stuff in the garage on eBay, and he's worked hard at that and made a nice profit for himself. So I hope I've put him on the right track and will be able to do so for the others, too.
I can also give my children opportunities that I didn't have as a child. If they needed my financial backing to pursue an artistic career, or one in professional sports, for example, I could help them do that. Of course, they would have to prove to me that they intended to put in a tremendous amount of hard work, and show me the plan of how they intended to succeed in their chosen profession, but I would have the ability to support them, financially, and invest in their effort to build their skills/craft, in the same way that I am paying to give them a private education in order to open up new opportunities to them. I can afford to give them more opportunities, but I need to see that they value those opportunities; that they don't take them for granted.
It's too early to tell what the children might decide to go into, but I'm excited to see them develop their skills. Brandon, for example, is a very talented linguist. He loves studying German, French and Chinese, as well as Latin. (This is not an area in which I excel so it's fascinating to me that he's taken to it.) Language skills will enhance any career path he wants to take because speaking multiple languages opens up even more opportunities around the world.
I think the moment I knew I had reached a huge milestone, in terms of success, was when a FTSE250 company offered to invest in my business. But the even more rewarding experience, for me, is watching individuals hit their own milestones. Seeing people work hard and reap the rewards – and achieve things they never thought possible – is hugely rewarding.
An individual is an asset. You work your way up towards becoming investible. My top members of staff are great investments for me. They are worth every penny of the salaries I pay them. But they all worked their way up there, just as I worked my way up towards having an asset: an investible company.
To watch people who were previously in a career that would only ever have offered them a low maximum salary achieve an annual salary of £100,000 is heart-warming. Everyone, from the ex-policeman to a former cocktail artist (think Tom Cruise in Cocktail), can achieve their financial goals if they work hard in my company. The latter, the cocktail artist, had never even worked in an office before. He was 30 and had been travelling the world doing cocktail mixing performances. It was an exciting life, but he didn't know how to make enough money so that he could afford to settle down and raise the family he wanted to have. He's one of our greatest success stories. Another success story is our Operations Director, Penny, who started as a Junior Administrator and has worked her way up through the company over the past ten years, and our Mortgage Club Director, Cat, who has worked her way up the company since joining us in 2008. Along with Mike (our IT Director who I mentioned above), Jon (our Strategy and Growth Director who started as a “Protection Manager” in 2013 managing life insurance policies) and Tony (our Mortgage Sales Director who joined the company in 2010 as a Mortgage Consultant), they form our management team. Jon is also a fellow LFC fan who played alongside me for the charity event at Anfield; he and Tony are the managers who came along to the Vitality LFC Players’ Awards where we sponsored the “Best Supporters Club” Award in 2017.
Seeing my business change people's lives for the better is the sweetest reward of all. My success is the collective success of everyone who has joined my team.
A huge milestone for us, as a company, was the day we moved into our new office space after existing in a tiny office in Camberley (that I'd moved into when we'd downsized from Guildford during the credit crunch). We picked an office in Watchmoor Park that had another office next door, which we earmarked for where we would expand into when we were ready. When we were, we literally smashed down the wall between the two! It was a huge breakthrough moment and a great achievement for all of us.
Our first big intake of staff was in 2012; we recruited eight new people, doubling the size of our workforce in one go. I remember one of the questions I asked candidates in their interviews was: “If the world as we know it really is going to end on 12 December 2012 – as prophesized by the Mayans – then which single item would you take to a desert island?” Their answers were interesting. Some said practical things like knives for hunting and water filters, but others said their iPhones… I'm not sure they thought that one through; where did they think they were going to charge their phones?
The business has not stopped growing since that day and we recently made yet another office move, taking over a whole building on the other side of Watchmoor Park in order to accommodate the almost 200-strong team.
Watching people grow and change their lives will always be my greatest motivator. I continue to encourage them at every step, and to help them believe in themselves, in their ability. I deliver what I promised: that I would support their growth if they delivered the hard work. They've all worked so hard in their own worlds before joining mine. They embody hard work and are shining examples of “you reap what you sow.” I hope their rewards taste as sweet as mine!