The Big Interview: Qdos chief Alf Gordon
His career has seen him work in fields including oil and gas, accountancy, insurance, training, property and private equity, delivering combined turnover in excess of £3 billion to companies he’s scaled, creating 13 multi-millionaires, and put him at the helm of a business empire currently valued at about £50m.
But he stresses that he’s taken a deliberately low-key, chameleon-style approach to avoid being too closely associated with any one sector. “I’ve always kept myself in the background of all the businesses I’ve done and it’s served me well,” says Gordon.
The first decade of his career was focused on heavy engineering in the oil and gas industry, and in 1987, after completing an indentured chartered engineering undergraduate training programme with Wimpey International, he co-founded Aberdeen-based oil services company qedi.
By the time it was sold to what is now Amec Foster Wheeler in 2011 for more than £33m, it had more than 350 staff and had seen turnover grow five-fold in as many years, on the back of its GoTechnology offering for commissioning management and technical integrity, which Gordon developed and says became a “world standard” in the oil and gas industry.
In 2000, he started an accountancy practice specialising in servicing one-man companies and the self-employed, leading to the creation of Aberdeen-based Qdos Accounting. That is part of integrated business services provider, The Qdos Group, where Gordon is chief executive. It now boasts 165 staff, and gross turnover and profits of £27.5m and £7.1m respectively in 2017, while its offering spans contractor, accountant, insurance broker, HR, health and safety, legal and recruitment agency services.
It was founded in 1988 as a VAT consultancy firm, and Gordon financed and led its 2013 management buyout, marrying his business experience with an injection of technology to significantly catalyse growth. This reflects the mantra that Gordon has increasingly relied on. “You’ve really got to live in the future today to be successful,” he says.
The group, with its three remaining insurance firms rebranding as Vantage, was earlier this year named the private company with the highest profit margin in the UK, at 51.5 per cent in 2017, and also ranked the UK company with the 55th fastest growing profits in the past three years, with annual growth of 70 per cent.
It was revealed last month that its Qdos Contractor arm, a provider of insurance products and services to the UK independent contractor and freelancer market via an online digital delivery platform, was being sold to Tokio Marine HCC unit HCC International Insurance Company for what Gordon describes as a “huge” undisclosed amount.
The disposal comes as the Scottish entrepreneur looks to significantly scale down his business portfolio. “I think we’ll probably get the rest of the group away for about £40m to £60m in the next three years,” he says.
His lengthy list of business interests also features UC Finance, set up to lend money to the UK’s growing number of freelances and sole traders and backed by a £5m loan from Royal Bank of Scotland and a £250,000 regional selective assistance grant from the Scottish Government, along with £1m from Gordon himself.
And there is private equity vehicle Britannia Capital Partners (BCP), which started trading last year and is currently being built up, focused on property plus other businesses.
All of Gordon’s companies are being “groomed and grown” with a view to being offloaded by 2025, with the exception of BCP, which from then on will be his key focus.
But after such wide-ranging activity, will just one business be enough to hold his attention? “I think it will because it’ll have quite a varied portfolio,” he says. “It will be busy.”
In terms of how to decide which individuals and businesses to work with, he invented a formula studying for an MBA in Aberdeen (“if you asked me how I found the time for it I’ve got no idea”), one of his many qualifications, including in computing technology and an MSc in management systems.
Gordon had at one point planned to retire at 40 and “shoot for a professorship at one of the universities”, but was able to mix work and study with the advent of distance learning. He also sees his extensive studies as enabling him to jump into different industries with authority.
He came up with what he calls “enterprise synergy”, looking at entrepreneurship, “intrapreneurship” and innovation, developing a screening system and mathematical formula for building businesses and assessing people, helping determine whether something is a “go or a no-go” scenario.
“It served me very well and that’s what I use now,” he explains. A prerequisite for him investing in a business is that technology must be tightly woven into its offering, regardless of sector. “It’s more than a must – it’s an essential part of business life going forward.”
And global ambitions are key. “I think internationalisation is also going to be fundamental for all parts of business,” he adds, having opened and run offices in China, Kazakhstan, Azerbaijan, the US, the Middle East and Africa.
UK SMEs are shrugging off economic uncertainty to broaden their international horizons, according to data published earlier this month by international payments company OFX. It found that 62 per cent of firms feel confident about doing business overseas, and 47 per cent increased sales abroad from 2017, growing global revenues by an average of £50,000.
But looking at the oft-cited hurdle of scaling up, Gordon sees a lack of both thinking outside an individual sector, particularly in the oil and gas industry, and forward-planning, with many firms operated for the market in the short term, not the long term.
“For a lot of business leaders and people who own businesses, I’m afraid to say time’s passed them by – they’re already knocked out. Businesses are trading and they’re continuing to go forward but they’re not at the front end – survivability for a lot of them is potentially quite bleak,” he adds.
The failure of a business can have a ripple effect, with recent research from insolvency and restructuring trade body R3 finding that nearly a fifth of companies in Scotland may have suffered a financial hit in the last six months following the insolvency of another firm.
Gordon also believes that the next generation of business model doesn’t exist yet. “There’ll be another industrialisation of business, which we’ll actually see in our lifetime,” says the serial entrepreneur, who worked in a factory in Maidenhead on leaving home at 15. Although he decided to go back to school after six months, every second weekend he would go down to London, buying up clothing stock and selling it to boutiques. “I’ve always been an entrepreneur, really.”
His achievements have been numerous – picking up awards including EY 2017 Scale-Up Entrepreneur of the Year for the Midlands for Leicester-based The Qdos Group, and Entrepreneur of the Year at the Grampian Awards for Business Enterprise 2012 – but for his defining moment he chooses the birth of his son Reuben, now four. The boy is a “massive focus” who has seen him scale back his workload to spend more time with his family.
Gordon, whose significant personal wealth has enabled him to make a castle in Ayrshire his home, admits that the life of an entrepreneur has involved sacrificing time for his personal life over the years.
“One sometimes sits and looks at the physical trappings of success, but it’s not really all about that.” Instead it’s about identifying young people with entrepreneurial flair or older people with what he deems “latent” entrepreneurial potential.
“You hear some really good success stories. Some of them fail as well, but there’s nothing wrong with that – I’ve failed many times myself.”
Indeed, Gordon has been asked to join advisory companies and boards, but he would want to have enough time to carry out such roles “correctly… maybe as time moves on I will have time to do these things”.
Given his ambitions for BCP, the private equity firm looks set to take up a significant chunk of his time for the immediate future. Having brought in about £200m via the businesses he’s sold so far, “I suppose it would be nice if, by the time I retire, if I could get that up to £500m or £1bn,” he explains.
However, Gordon jokes that it could go either way – and he might spend the next ten years “just failing all the time”.
But that’s unlikely. “The older you get the wiser you get – and the less chance I’ll lose money.”