Entrepreneurs and private equity players look for opportunities

THE economic downturn will provide opportunities for entrepreneurs with the bravest taking advantage of their rivals to expand, according to a round table event hosted by YFM Group and TheBusinessDesk.com.

David Hall, managing director YFM Private Equity, is calling 2008 the “Year of the Entrepreneur” and says that the Leeds-based venture capital firm believes that past experience shows that now is the time to back good businesses with investment.

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“When we invested in businesses and when they created the most value was between 1990 and 1992 and 2000 and 2002 and we’ve sold them on five or six years later. The economic conditions that are coming to pass now are not dissimilar to those times,” he told the round table event at YFM’s head office in Leeds.

Warren Shermer, managing director of Leeds-based envelope supplier, Great North Envelopes, is one of those entrepreneurs looking at expansion and acquisitions.

He said: “We are looking at buying one or possibly two businesses in the UK.”

Paul Cannings, managing director of the Chandos Fund, said that the fund invests in companies that typically don’t have a 50% market share but a niche in a market.

“There is no reason why they can’t double in size and that needs entrepreneurial guts as well as long-term finance and if you put those two things together that is where the opportunity lies,” he said.

Andy Hood, managing director of Ilkley-based Sarian Systems which supplies IT for lottery terminals and cash machines and was bought by US group Digi Inc earlier this year, said firms must have confidence despite the difficult outlook

“It’s a threat for some people, it’s an opportunity for others – you have to react to it,” he said.

Gary Lasham, managing director of DS Smith Multigraphics in Bradford, agreed: “This is not the time to batten down the hatches, it’s exactly the time to invest.”

Kevin Hill, managing director of John Fredericks Plastics in Huddersfield, which makes replacement windows, said: “We are looking to take market share, there is a low cost entry to growth by investing in sales.”

Peter Skipworth, MD of Sheffield-based water engineering research business SEAMS, said the company had decided against offshoring any of its operations because the cost and the quality of service meant it did not make sense and it was recruiting skilled staff.

For more information on video round tables from TheBusinessDesk.com, email: emily.boldison@thebusinessdesk.com