In fact, Bannatyne is so at ease in his entrepreneurial typecast that it makes you wonder why it’s only recently that the man on the street might know who he is, and even that’s more down to his blossoming television career than anything he has achieved in his business life.
Which is a shame, because this story is perhaps the dream rags-to-riches tale that should be inspiring a whole generation of entrepreneurs. “Entrepreneurship in other countries is very different to how it is here,” he says, in a thick Glaswegian accent. “There are a lot more self-employed business people in France, for example. Wherever you go, there’s a shop and the owner’s in there. Britain has to become more of an entrepreneurial country to keep up with the economy.”
Although he’s probably best known for his role in BBC’s Dragons’ Den and Mind Your Own Business, Bannatyne has a string of vastly successful business ventures to his name. After initially setting up an ice cream business, Bannatyne owes the majority of his success to his chain of nursing homes, Quality Care Homes.
When he sold that in 1996, he turned his attention to children’s day nurseries and Bannatyne Fitness, a health club chain with 37 outlets that now turns over �30 million a year. That’s as well as Hotel Bannatyne – a 60-bedroom hotel in the north-east of England that turns over �1.5 million a year – Bar Bannatyne and Bannatyne Casino, both in Newcastle-upon-Tyne, and public speaking slots that start from �10,000 a time, making Bannatyne worth somewhere in the region of �130 million these days.
Paper money
But it wasn’t always like that. Bannatyne grew up on a Clydebank housing estate “the wrong end of Glasgow”. Yet even then there were glimpses of what was to come. His first entrepreneurial experience came at the age of 11 when he went knocking on people’s doors until he had enough names of people who wanted newspapers delivered to convince the local newsagent to give him a paper round.
But two weeks after his 16th birthday Bannatyne joined the Royal Navy, where he spent the next four years, before having “an altercation” with his commanding officer, which involved throwing him over the side of an aircraft carrier for a �10 bet.
Bannatyne was sentenced to nine months’ detention in Colchester army barracks to consider his ill-discipline, spending his 20th birthday behind bars. After seven months he was released, and headed back up to Clydebank to sign on the dole. He qualified as a welder and spent four years working in the area. “But I was 25 and I got really fed up of it,” he says. “My overalls were dirty and my fingernails were filthy.” He’d heard that Jersey was meant to be a great place for young people, so off he went.
“I ended up living in as a barman and I was in Jersey for the next five years having a great time: playing pool and nightclubbing every night,” he remembers. “Then I was on the beach one day and I said to my girlfriend ‘you know, I was the oldest swinger in town last night. Let’s go back and start a business’. And she said ‘OK’.”
After a week of knocking on doors of local businesses, they both got jobs in a bakery in Stockton-on-Tees. They bought a �12,000 house, with a �10,000 mortgage, before Bannatyne stumbled across the ice cream van at an auction, at the age of 31. “It cost �450, which was about all the money I had in the world back then. I got the Yellow Pages out and phoned ice cream suppliers, filled the van up and started selling ice cream,” he says. He quit the bakery job and Duncan’s Super Ices was born.
He got his big break when a concession came up for the sole right to sell ice cream in a local park. “A lot of people ask me for business advice and what makes entrepreneurs different,” he says. “Well, there were about 50 to 100 people who were selling ice cream in the Middlesbrough area and this concession came along and you had to enter the highest bid to rent it for a year from the council. So I bid �2,000 for it and I won and made �18,000 profit that summer. But why didn’t the other ice cream men who were also
supposed to be entrepreneurs bid for that?”
Within three years, he was running six ice cream vans and two caf? outlets and turning over �250,000 a year. “It was a great life but I was getting a bit fat because I couldn’t stop eating ice cream, so I thought I would try and do something different,” he says. “And I couldn’t expand any further because I was too vulnerable to the opposition. I had my patch and that was it.”
Something different turned out to be Quality Care Homes, a chain of nursing homes that Bannatyne started from scratch in 1986. It is this venture that set him up for life. With the fees offered by the government, he realised that it was possible to make a tidy profit while offering residents their own bedrooms with private bathrooms.
But it was a constant battle to pay the bills for the building work. “At the end of the first month I managed to scrape together enough money from the ice cream business and put the next two on two credit cards, so I had �10,000 on each,” he says. “At the end of the fourth month I sold the house. The wife wasn’t too happy but eventually we got this nursing home finished.”
With money coming in, he was able to persuade the bank to lend him �250,000 to finance another nursing home. The business was growing, but so were the debts. Five years later, with 12 homes on the go and debts of �6 million – “we had a bit of a problem,” he says – someone suggested floating on the stock market. He phoned up brokers one by one until one agreed to meet him. The company floated in 1992 for �26 million, which he still regards as his finest achievement other than teaching his children how to swim, and when he was made an offer he couldn’t refuse four years later, he sold the firm for �46 million to Principle Healthcare, taking �26 million for himself.
Bannatyne owes much of his success to his ability to spot a gap in the market. Just Learning was started in 1996 when he struggled to find a nursery for his own children, Hotel Bannatyne developed when he drove past a derelict building every day which he “thought was a shame to be lying empty”, while the inspiration for Bannatyne Fitness was a skiing accident which left him with a badly injured leg.
“I was sitting in the gym trying to build my leg muscles up again,” he says. “I knew how much it was to join because I was paying the fees, I knew how many people were members because I asked and I knew how big it was because I counted the tiles along the wall and I thought ‘this is good, I’ll have one of these’, so I opened my own gym.
“A lot of people just don’t try and do other things in their life,” he adds. “Almost anybody who goes into entrepreneurship will succeed. You have to find a product and just go for it.”
Into the Dragons’ lair
These days, however, you’re more likely to find Bannatyne on the small screen than in the boardroom. “When you’ve got enough money, making money’s boring,” he admits. In the highly successful first series of Dragons Den, Bannatyne and four other entrepreneurs – the founder and ex-chief executive of Red Letter Days Rachel Elnaugh, Simon Woodroffe from Yo! Sushi, technology businessman Doug Richards and Peter Jones from Phones International – assessed potential entrepreneurs looking for funding. His most notable contribution was to invest with Elnaugh in Elizabeth Galton’s jewellery, a subject he admits he knows little about.
“I mostly invested in that because of Elizabeth,” he says. “We kept asking her questions and she just kept coming back with this big smile and an answer and I thought that if anybody could do it, it would be her. It’s a bit of a crazy investment and it’s a real risk, but it’s only �55,000. And if it becomes a big name and I’m part of it, then that would be fantastic.”