Rich pickings for the new millionaires

It's been an amazing month for wealth creation. Britain's new entrepreneurs are having a ball. By Nigel Cope
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Indy Lifestyle Online
WHAT a month it has been for the new entrants into Britain's millionaires' club. Thanks to a decision to sell or float their business on the stock market, the founders of a computer software group and an internet services company are now sitting on a paper fortune. They are not alone - in the last four weeks alone, seven entrepreneurs have made a combined pounds 1bn.

These are some of Britain's new millionaires. Often quite young, aged in their 30s or 40s, they have typically made their fortunes in new, fast- growing industries And there has been a sudden rush of them.

Mike Norris, 36, who runs the Computacenter PC supplies business, is now worth more than pounds 12m following the company's pounds 1.3bn flotation last week. The two founders, Philip Hulme and Peter Ogden, are worth a staggering pounds 344m and have so much money to spare that they are giving away pounds 50m to charity.

Cliff Stanford, has made pounds 33m from selling his Demon Internet business and is now setting up a fund to help young entrepreneurial hopefuls.

Tom McCabe, founder of the Swiftcall phone company, is set to net pounds 100m if a deal to sell the business to a Japanese company goes through.

Tom Singh will find his stake in the New Look fashion chain he founded worth more than pounds 120m when it floats on the stock market next month. And so the list goes on.

The array of talent paints an interesting picture of entrepreneurial Britain. The first point is that Britain's businessmen and women seem to be more dynamic. Rob Johnson, an American who lectures in entrepreneurship at London Business School says he feels the UK is now catching up with the go-getting, "can do" business culture of the United States. "There is a change in the business culture. People are more willing to take risks. We are getting more and more role models like these new millionaires and people start to think 'well if they can do it, I might have a go.' Success breeds success."

It is a point backed up by Cliff Stanford of Demon Internet. Mr Stanford is one of a growing number of "serial entrepreneurs" the country is now producing. In pubs alone there are three. Michael Cannon built up the Devenish pubs chain, sold it and then developed the Magic Pub company before selling that too. David Bruce founded the Firkin bar and breweries and is now setting up bars in France. Hugh Corbett is opening pubs in London again after selling his first chain.

There remains much to be done here, though. Some economic commentators point out that Britain's economy still lacks the large layer of medium- sized companies which exist in Germany. They say many sell out rather than seeking outside investment to develop their businesses. A look at our list shows some common themes. Many of the new millionaires have made their fortunes in fast growing high technology sectors such as telecommunications and computers. There isn't a single engineer or industrialist in the list.

It is a trend underlined in the recent Independent 100 list of Britain's fastest growing privately owned companies. The top places were dominated by service sectors enterprises computer software businesses or recruitment consultants which are benefiting from the trend towards the contracting out of non-core services.

As Nigel Crockford, a partner at accountants Price Waterhouse in Nottingham, says: "These kind of businesses are very attractive to the stock market at the moment and they are fetching some very high ratings." For example when Computacenter, the PC supplier floated this week, its offer of shares was swamped by investors. It could have been subscribed 10 times over. According to David Wilkinson, national head of entrepreneurial services at the accountants Ernst & Young, the surge in the number of deals is due to the stock market's long-running "bull market" which has now lasted for several years.

"With the stock market at these kind of levels companies are looking at it and saying 'if we go now we can get a very good price. If we wait, things could change. There is a lot of talk about potential recession at the moment and that could affect sentiment. So if I had a small restaurant chain at the moment with a bit of a brand name, this would be a very good time to sell."

Fear that the market may change could be one factor behind the rush of deals, but so could the threat of higher taxes. Mr Wilkinson says the Labour Government could "get tough" on capital gains tax for entrepreneurs selling their businesses. "There has been a sigh of relief from the entrepreneurial community so far because Labour has not yet launched any sort of crackdown. But that could change."

People used to say that the difference between a Briton and an American is that while an American dreams of making a million, a British person dreams of winning it. But if Mr Stanford, the founder of Demon Internet, is anything to go by, attitudes may have changed. "I like having money in my pocket. But it would be no fun to win it on the football pools. The thrill for me is to make it through business deals."

Perhaps it is significant that most of our new millionaires do not plan to jack it all in now they have made their millions. Most of them plan to continue working in their businesses.

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