lain Russell and Arran Aromatics Limited: Portfolio and serial entrepreneurship Carol Craig and Frank Martin
Summary This case discusses the behavior of lain Russell. He makes a major career change by leaving an elite part of the police force in England in order to move to the island of Arran in Scotland. lain wants to bring his family up in an island environment. He is very disenchanted with the police force and its regimented procedures. lain goes through a series of crises and recovery situations trying to start various businesses on the island.
The case explores the process of trying to make something out of nothing. This case illustrates a single-minded entrepreneur who often offends more people than he should. Success is eventually achieved. lain, with skills inputs from his wife, does succeed in making a good living for his family. He is still not satisfied with his situation and the case ends with lain contemplating new business opportunities.
In 1989, lain Russell established Arran Aromatics Limited. It was a small company based on the island of Arran in Scotland making a range of gift soaps and toiletries. In its first year, the sales turnover was £200,000. Six years later, sales had risen to £2 million. The company was taking regular orders from up-market stores. such as Heal’s and Habitat. It was also receiving similar orders from companies based in the United States.
In the spring of 1996, lain Russell was the managing director of Arran Aromatics. He was 52 years old and had lived on the island for 23 years. lain was in an enviable position. His order book was growing each day. His daily drive to the office started at his luxury home in Arran’s Whiting Bay and took him to Brodick along a beautiful coastal road. He could spend weekends and
evenings sailing his yacht ott Arran. For Russell, another of Arran’s attractions was its proximity to Glasgow. Within two hours of leaving his ‘haven, he could take his seat on the board of the Glasgow-based Scottish Design Council. Arran Aromatics was essentially a lifestyle business where the quality of life was paramount. From his office window, once the Home Farm for Brodick Castle, could watch sheep grazing, and on fine days draw ins ration from the legendary Goatfell, which towers o the island. So why did Russell, sitting in his Home Fa office in May 1996, proclaim that setting up in Ar had been a `catastrophic mistake’, the ‘worst business of his life? What had led him to this view, and was there anything he could do to rectify the position he was now in?
Police years lay Russell grew up in the midlands of England.
His father was a policeman. When lain left school with qualifications he had no clear idea of what he wanted to do. Joining the police was an obvious option. His fats wanted his son to follow in his footsteps but instead of joining the police force, he went to work for the land Bank. After a few years spent in what he de as a ‘Dickensian’ organization, lain relented and j the police force.
After an interview for the Police College, Russell was ‘Many are called but few are chosen. His dreams of -ng it to the higher echelons were smashed, and he interest in his police career. He knew he had to get t and he needed to do something different. Russell the idea of setting up a business because it would e him the independence he craved.
However, Russell d no capital or business knowledge. In part due to his family circumstances, Russell was reluctant to take risks. His wife, Janet, had recently given • to Andrew, their first son. Janet was the same age as r husband and came from a Methodist Shropshire fain-. Unlike lain, Janet had stayed on at school and acquired a State Registered Nurse qualification.
By the time she left nursing to start a family, she was a ‘Ward Sister. During a summer holiday in Arran, his father’s birthplace, lain felt frustrated with the CID and Birmingham, which he thought was not a suitable place to raise a family. He was being pushed towards giving up a secure, well-paid job and starting a new life. lain considered moving the family to Arran in order to start a new life in ‘the unspoiled haven’.
Given the limited employment opportunities on a small island like Arran, the Russell? the only hope was to start their own business. They had no capital other than what they could generate from selling their house in Birmingham. After several unsuccessful attempts, they managed to buy a petrol filling station and accompany-ing shop in Arran’s Whiting Bay. In January 1973, they moved to the island.
Within months the business they hat area mean about began to take shape. They rented out some of their new premises to a hairdresser. Further, they opened their own craft shop. They also bought a few bicycles and a rowing boat to hire out to the tourists. Janet gave birth to their second son, Duncan. The sales turnover in the first year was £28,000, and the declared profit was £1,300.
They had money to feed themselves but not enough to clear their debts. A solicitor’s bill for £700 landed on their doormat, and they could not pay the bill. lain went to see the lawyer immediately in order `to come clean and tell the truth. He always believed that if ‘you’re open and honest, people will go a long way for you They eventually paid the bill and no long-term damage was done.
The following year they bought a dilapidated croft, which was renovated in their spare time. The croft generated rental income. In 1976, undaunted by cashflow problems, lain rented an additional craft shop located on Brodick pier. Within a few years, both shops were doing well.
However, Russell was finding it difficult to source suitable craft items to sell. In the early 1980s, there were several craft workers on Arran, but many of them did not want to sell their goods to lain. They resented Russell making profits on what they had produced. Arran Canners, an important supplier, closed down and in the process triggered the next phase of lain Russell’s entrepreneurial career.
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