Welcome to The Secrets of My Success, where I, Alpesh Patel interview Dr. Vijay Patel. Dr. Vijay Patel B.Sc (Pharm) MRPS, GPHC, CCMI, FRSA, discusses how he made his business from nothing to billionaire with passion, clear goals, and hard work.
We don’t often hear about entrepreneurs starting with absolutely nothing. Who came as immigrants to a foreign country and have built up their business into hundreds of millions.
His objective in any business that he started is to build to its maximum potential. Never shy away from hard work, innovation, and continued improvement. Recruit smart people to recognise talent, promote and reward appropriately.
Dr Vijay Patel
Early Secrets to Success
Alpesh Patel: What were some of the secrets to success from university? How did you start going from that into becoming a businessman?
Dr. Vijay Patel: My upbringing is from a very humble start. Therefore that was an incredible cracker for me. To get on in life and distance myself from that.
As a child, I was always wanted to be in business for myself. Because at a very young age, I had worked out that the business community particularly owned the best cars, the best buildings and the best bungalows. Even in the village or the town where I was brought up in Africa.
And I said there are doctors, engineers, engine drivers, and they all live in apartments. Therefore, there must be something good about the business. And that was at a very young age.
I decided, “I will be in business because I would like all the nice things.” But that was just a child, eight, ten years old, thinking like that.
Pharmacy as a Business
When I did pharmacy, I realized that joining a business that was a profession was a very nice business. And I had placed to do medicine, dentistry because I had parental pressure from my mom. I only had a mom. My dad died when I was very young.
To be in a medical profession and purely to please mom, I so-called try and do medicine, but it wasn’t me or the industry.
And I said, “Look; by being in pharmacy, I can be in business for myself and also be a professional. That will please mom.” And that’s how I entered pharmacy.
Business Strategy – Thinking Ahead
Alpesh Patel: One element was that you did have a strategy. It wasn’t that you hadn’t thought it through. You had thought through, “This gives me options. There is something I want.”
You had thought far ahead. But how far ahead had you thought? How did that planning begin when you were at university? What was it? Ten years ahead, 20 years ahead?
Drive and Passion from Within
Dr.Vijay Patel: The pharmacy school is only three years, but it’s a formative part of your life. A boy goes into university, comes out a man. And then I had the passion to go into business.
And a penniless guy when coming in a Lyft on the motorway from Leicester to London to start work. But I always wanted to do it. So it came from within -that I wanted to be successful. To build a business, and it’s something that’s within you.
Focused on my Goal
I definitely did not say, “Oh, well, I’ll see what life brings.” No, that wasn’t me. I wanted to be somewhere in life. Meaning I wanted to be in business. So that was a tick.
Then I was entirely dedicated and focused on reaching my goal. How am I going to start my first pharmacy? And that was the first two years of my career. Save enough money to go and open up your first pharmacy.
Starting A Business
Alpesh Patel: How did you save the money?
Dr.Vijay Patel: I worked extremely hard. I would work absolutely every hour that I was given. I would be a local pharmacy.
My wife, who was also a pharmacist, we joined our savings for the whole 18 months, two years of our life. And then we put in a deposit for our first pharmacy.
Getting Funds to start a Business
Alpesh Patel : Do you think people could replicate that model again today? Where people can say, “Look, nowadays borrowing money is so difficult. Banks are more risk-averse.” Do you think that avenue, people could replicate your strategy even today?
Dr.Vijay Patel: 100%. The opportunities presented today to borrow money are much, much better. I was refused a bank loan from Barclays, NatWest, Natwest, and Westminster Bank. You name it.
Every bank in England. I’d been to a High Street presented my plan. And they said, “You know what? You don’t have enough equity. You haven’t got enough experience. So sorry, come back.”
Challenges of Starting A Business
Every bank in England. I’d been to a High Street presented my plan. And they said, “You know what? You don’t have enough equity. You haven’t got enough experience. So sorry, come back.”
Now. How can a guy who’s just got three or 4,000 pounds wanting to start a business ever have experience and a large amount of deposit? And I didn’t. An uncle of mine guaranteed the money to start a business.
I said this to the chief executive executor Barclays once. I said, “You know what? This was something wrong with you guys. As soon as I became a success, you guys came running to me and couldn’t do enough for me. Why didn’t you give me a leg up to start with?”
And he said, “Please, Vijay. I promise you; there are so many opportunities for start-ups. And they’re got departments in banks now to help the start-ups.”
Alpesh Patel: You’re right. It has changed. And they’ve learned, I think, from the experiences of people like you, who then gone back to them and said, “Listen, guys, you’ve been messing up. You need to change.”
So you’re right, they’ve got the incubators. And it’s inspiring to hear that, that you did get rejected. It wasn’t just wealthy parents, and here’s loads of money. You had so many rejections, and you pursued that. You mentioned passion.
Everybody loves to hear about the successes, and we’ll come to that, how you sold for hundreds of millions to business from zero. But tell me about the most challenging times. What’s the secret to getting through the toughest times?
Uncertainty About Funds
Dr. Vijay Patel: There was no certainty about getting the loan. And that sucked because I said, “Look, there’s so much opportunity I see in building a business.” As the business, I wanted to open was a small pharmacy run by a Welshman who was just starting.
Initially, I found that when I finally purchased that business, having been given a loan from an uncle, people originally went to the opposition or didn’t come to my pharmacy.
Then some very nice ladies in a region in Essex saw the nice side of me, so you know the guy is perfectly all right. He’s young; he’s very attentive and helpful – we should give him a chance.
First Pharmacy Business
And do you know what? That was the beginning. And within a year, I had doubled my business. And then there were three pharmacies near me. Within two years, they all closed down because they saw that this guy was on fire. He can do anything for us.
I was like what the little Indian did. It’s anytime you want anything; I lived above. If you have an emergency at night you need milk powder for the baby, just knock on my door. Deliver the medicine also.
Hallmarks of Business – Service and Likeability
Alpesh Patel: I want to delve into those two points because they’re often brushed over by people looking at these things and don’t appreciate the importance – service and likeability.
Service. You had that culture of service, so you outcompeted everyone else. The other thing was likeability. I mean, you said they said you were really nice. So they said, let’s give him a chance.
Let’s not underestimate that. That likability, the ability to get along and not be entitled. You weren’t demanding things.
Know Your Customers
Dr. Vijay Patel: Not at all. I knew the name of every customer, client, their family, and the children. I’d made a point. So Mrs. Smith, Mr. Brown, how are you? How’s the boy. How’s your husband? That’s it. And do you know what?
I made that my business, and I genuinely meant it because they were also my clients. And I used to know them, and I think they saw that.
They said, “You know what? He’s a nice guy,” and my business has shot up. And three pharmacies around me within a couple of miles off, they were done. And I went from one to five pharmacies within five years.
Scaling a business and making it grow
Alpesh Patel: Tell me more about this growth path. Let’s take it to the scaling. That’s a real problem people face, not just from the Indian community in Britain but also globally.
People can get to a particular stage, and then scaling becomes really difficult for them. What were some of your secrets to scaling big?
Success Gives you Confidence
Dr. Vijay Patel: One thing once you are successful, you got that confidence. Haven’t you? I was successful in one business. I got to replicate in the second, the success in the second. So third, fourth, and fifth becomes easier and easier.
The most important thing is your banks. Once they see you are a successful person, they want to associate with you and lend you money. So lending and borrowing, borrowing money came easier, much more accessible. So that was a huge thing.
Service oriented business
Then we had this formula, whereby whatever business we bought, we transformed it into a 100% service-oriented business. Working hours extended, and the same ethos that I had with my first pharmacy was extended to all my pharmacies. There was no magic or science.
Alpesh Patel: You had a formula for success that you consistently applied it.
Dr. Vijay Patel: Correct. And it worked, and it worked. So the chain then grew within five, nine, ten years to 25 units. So that was good. My brother joined me in 1982 because I was building this thing, and I was struggling.
And entrepreneurs often like management. They don’t know how to handle human resources. They are not disciplined. I suffered from all of that. I had a formula to succeed, which was great.
It worked. But at the same time, I was struggling to manage all those businesses, growing businesses. I needed somebody who had a disciplined mind.
My brother is an architect with an incredibly disciplined mind, an excellent manager. He’s an outstanding administrator because architects think in 3D.
He always foresaw problems. Whereas, I was stretching to the sky, saying, “I want to build bigger, bigger.” Just a little bit.
Alpesh Patel: I guess that’s where the element of luck and chance comes in. You were lucky you had a brother who had the skills you needed. Otherwise, it presumably would have been a bit risky trying to find somebody with that.
Realise Your Limitations
Dr. Vijay Patel: Yeah. At that level, yes, I was fortunate that I had a very capable brother who left his architecture profession. He’s a very bright man who had success in his own time. But I said, “There’s a lot more here.”
Now, at a certain level, any entrepreneur building a business has to recognize that he hasn’t got all these abilities. He has got the ability to build a business. But he’s probably not the best administrator, accountant, or marketeer.
Surround Yourself With the Best People
You have to surround yourself with the best people, and this is very important for all entrepreneurs to realize that they’re not the best at most things.
And therefore, they have to surround themselves with these capabilities, these capable guys. As I always said, they have to buy into my vision. Look, this is a winning formula.
We are doing it. All I need you to do is look after certain aspects of the business. You look after the sales; marketing; the assets; accounting, etc. And then you can grow the business.
Can’t Be the Best At Everything
That’s precisely what I’ve done. And you know what? I have not been trained as a manager or have a degree in economics. I just learned as I went along.
But it’s vital to recognize that you are not the best at everything. You are worst at most things than others who have single tasks or relatively closed areas or businesses to work in.
And that takes humility. I mean, people associate entrepreneurs with ego, but it takes humility and a lot of self-reflection to say, “Actually, I want people who are better than me to be doing these things.”
Recruiting in a Business
Alpesh Patel: On the flip side, how hard has it been to fire people when you realize they’re not as good as you thought they’d be?
Dr. Vijay Patel: I’ll tell you one thing. I made a lot of mistakes in recruiting. And you are spot on – time and again, that does happen, in fact, regularly.
You have tremendous well-presented guys, very elegant, well-dressed. They do a fantastic presentation. And then you realise there’s not that much of a depth in this person.
We now go to a recruiting agency; they put three or four candidates in front of us. The board recruits them, and I interview them too.
Cup of Tea With the CEO
Finally, we choose two guys and say, “All right. These are the two finalists.” I had the privilege of having, as I call it—a cup of tea with the Chief Executive. Then you know what? A completely innocent conversation. They are about to join us for a cup of tea and biscuit. And then I’ll put in a couple of red herrings in that question.
I’ll be able to judge whether there was any depth to the person or not. And generally, we wait it out. But having said that, we still used to make mistakes, and you’d have to be very honest with the first three months. Say, “Look, culturally, perhaps you won’t fit in this environment,” and just let them go.
Entrepreneurship in Great Britain
Alpesh Patel: I’ll say that the reason it’s called Secrets of My Success is I think people don’t often realize these things as they should be. Now, you’ll know I work with the Department for International Trade. They’re going to be seeing this too because we want to attract more entrepreneurs to the United Kingdom.
There are all the benefits that you’ve had by being a business in the UK. Speaking to that global entrepreneurial audience, what messages would you give them, given your success as an entrepreneur in Britain?
Good Banks in Great Britain
Dr. Vijay Patel: If you are an entrepreneur and have a single-minded desire to succeed, Britain is a brilliant country. The banks are good. I have no idea what banks are in foreign countries.
If you have a good idea, if you present yourself and then deliver, then deliver what you say year on year, the sky’s the limit.
Don’t be Afraid To Make Mistakes
Successful entrepreneurs will tell you that they had a go at several businesses, but the ones that have succeeded or succeed very well and the ones that didn’t, you let them go. That’s one thing you have to learn.
I made more mistakes, Alpesh, than you probably ever have. And I’m not ashamed to say that because unless you cut your losses and move, you’re digging a hole. So culturally, we said, right, that’s a mistake. Let it go before it’s too late.
Becoming an Investor
Alpesh Patel: I can tell you that’s so inspiring and relieving to hear that. And I know it will be for the audience watching this. Now you then grew the business, but then you sold. And now, in your own right, you’re an investor.
Tell me about the decision to sell and were their secrets of making sure you’ve got a good valuation? Because obviously, we’ve got entrepreneurs listening to this, and they’ll want to know about getting great valuations.
And that transition to becoming an investor yourself. What are some of the secrets to making sure you make sound investments?
Transition from Business men to Investors
Dr.Vijay Patel: We have transited from one retail outlet to a fully-fledged pharma. I have divested two companies. So, if you put that together, I have sold my business think of 1 billion pounds. What started as one outlet with 2,000-pound capital. But that’s the work I’ve done all my life.
As time goes, you become a far more sophisticated because you learn. We went from retail to distribution, sales and marketing, manufacturing, and then development.
And we did all this. I’ve done the whole nine yards of pharma except original research, which is beyond me because that takes billions. And I didn’t even reach that size. But as my children will, but that’s rare.
So, having learned all this, there’s a lot of knowledge in my organization about building a pharma business. And now it’s very sophisticated because we use all the modern amenities that make a successful pharma.
Good valuation for a Business
Alpesh Patel: As an investor, how’s that transition been for you? And don’t forget the secrets of getting those valuations when you exited.
Dr. Vijay Patel: Again, you employ capable people around you, and then your advisor’s consultants who work out what your business is worth, how you present it in its best light.
Successful Businesses Find Takers
When there is a successful business, there are a lot of takers. And we have sold both my businesses to PE (private equity) houses. And they, generally as you know, well, you know more about than I do, they’re financial engineers who put several businesses together build up the value.
That’s precisely what has happened. The business, we sold $600 million near the end of the very first one. It was then sold for 2.3 billion pounds. So I sold it for 270 million pounds, and they’d built it up and sold it for $2.3 billion. I had rolled over some funds in there. So it’s been a very successful thing.
Now, the second business, they are working at it, and let’s see what happens. But you have to have a profitable business. Net cash flows generated; otherwise, PE houses are not interested.
And you should have a pipeline. That’s the future. If you’ve got all these nice, healthy margins, net cash flows, pipelines, I think you’ve got a sellable business.
Rights Over Future Earnings
Alpesh Patel: Yeah. As you said, you did something very clever. Again, you’ve slipped it in there, but I think it’s worth drawing out that you still had rights over future earnings after selling it.
So essentially, an earn-out which private equity firms like mine are very interested in because we want to make sure that you still got skin in the game, and we can call on you to help it.
Dr. Vijay Patel: Absolutely. And also, you know what? You are going to enjoy future growth. Yeah. And it reduces the risk from our side of things. Again, you let go of your baby, as it were, your businesses.
Transitioning Into New Businesses
Alpesh Patel: You’ve gone into new businesses. What’s been the secret for that transition? Because a lot of people can’t let their businesses go. How have you managed that?
Dr. Vijay Patel: Yes, don’t forget, I’m 70. Mentally, I may be a little younger. But the next transition, my sons are in the business now. My son is the CEO of the pharma business that we sold. And they are building that very nicely. So we’ll see what happens in that.
Always Build Businesses
But to grow from building businesses to becoming an investor is a big jump. And your mind has to settle in now. I’m getting used to the fact that I’m not running a pharma business as such, though we have got a small generic business. And because I’m a chemist, I enjoy being that small.
But that could be something nice in time to come, and that will continue. So I always have a day’s work to do in there. And I do spend time there building that up. That’s very small right now. I always build businesses, and the most successful business I’ve built is from zero, too.
Change in Mindset
But the change of mindset from running a business to become an investor is enormous. I must say now all our investments are made through Waymade Capital. So that is our investment now.
We have invested in pharma course, real estate, the second big part of everything, then private equity.
Investing in Private Equity
Now I’ve got a team of people working in the Waymade Capital, and we are advisors for real estate, and there’s quite a big portfolio for us – the second-largest portfolio. It’s up to our team of half a billion real estate, the rest pharma, and then PE.
We invest as virtually as PE ourselves. We partner with PE and also invest with companies, PE houses. So these are all the three, four things. And then, we have actual asset management with several banks.
Alpesh Patel: I guess one of the secrets to continuing to be successful is not slowing down because clearly, you haven’t. There is one other thing I’ve got to mention, and you’re too humble to mention it is the amazing philanthropic work. If I may say so, that’s the mark of success.
What you’ve done from my home village in Karamsad, India to the United Kingdom – the massive building named after you and the facilities, the considerable donation there. But also the state-of-the-art hospital in my home town.
Dr. Vijay Patel: It has been made the COVID hospital for our part of the world. Because, and I’ve just sent them 100,000 pounds of PPE. But that is the center for COVID treatment for all of this population. I don’t even know about 5 million people it says, or whatever.
Alpesh Patel: I mean, and look at that. I mean, that’s got to be the real mark of success. You’re saving lives. And we left that part out because obviously, this is what pharmaceutical is about. And we know this more than ever now. You’re saving lives.
And through your work in Britain and De Montfort, you’re educating the next generation of lifesavers and entrepreneurs.
Dr. Vijay Patel: Yes, indeed. And that’s my team. All my life, I preached, “I’m an entrepreneur.” As you know, the entrepreneur of the year in the UK. I’ve won several awards.
My theme is you can be anything you like, provided you are singular-minded, unafraid of failing, trying again, and have deadlines to meet. And you work at those. That should be the mark of a successful man.
Any entrepreneur who’s built a business will tell you that he has failed several times. But the focus is still there to succeed at the end of it.
Alpesh Patel: Dr. Vijay Patel, on that very inspiring note, thank you so very much. We could have gone on a lot longer. Learn from an old-school industry how to start an airbnb cleaning business. I think many people will be inspired by your story and look into it in more detail and use it as a basis to build their businesses. Thank you very much for all your perspectives.
More free resources on www.alpeshpatel.com
Alpesh Patel OBE