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Phone entrepreneur dialled up success

SME Focus: With financial markets reduced to turmoil and some of the world's biggest banks left on their knees, lecturers in finance and business will be wondering if they need to change the lesson plans.

With financial markets reduced to turmoil and some of the world's biggest banks left on their knees, partly as a result of dealings in complex securities that some senior people did not understand, lecturers in finance and business will be wondering if they need to change the lesson plans.

However, even before the credit crunch there were plenty of people who were doubtful of the claims of those who said they could teach people how to succeed.

In this week's SME Focus a born entrepreneur lends support to the sceptics but admits to learning a valuable lesson from the fabled sage of Omaha, Warren Buffett.

Name: Scott Allison Age: 32 What is your business called? Abica Where is your business based? Glasgow What services does it offer? We are the UK's first business-only mobile network and I believe that our genuinely unique selling point is that we offer corporate rates to the SME sector. Abica is also a landline and broadband telecoms provider.

What is its turnover? £1.1m and growing fast.

When was it formed? Abica launched in October 2008, but the company has an eight-year history leading up to that point. I originally founded the company as Freedom Mobiles in 2000 after graduating from the University of Strathclyde.

Whilst the industry sector that we operate in has essentially stayed the same over the years, our target market has changed from consumers, when trading as Freedom Mobiles, to exclusively SMEs in 2006.

That was when my business expanded with new partners from the B2B community coming on board.

These three new partners merged their businesses into mine. David Munro and Gregory Barnett are still involved but the third partner left earlier in 2008 to pursue other interests.

How did you raise the start-up funding? When I was a sole trader I just started with a few thousand pounds of savings.

Later when I set up the company I sought a small bank loan and an outside investor who had established a similar business before me selling mobile phones to consumers online.

That investor, Chris Conwell, departed in 2006 when the company focused on SMEs. Chris went on to sell his business, Mobiles.co.uk to Carphone Warehouse in 2007.

What were you doing before you took the plunge? I've always worked for myself and taken an entrepreneurial approach to things. I couldn't wait to dive headfirst into the world of business and while I was studying marketing at the University of Strathclyde, I decided to set up my businesss selling mobile phones online in 1996.

I think that universities may be great at teaching the theory, but when it comes to offering practical experience they often fall down spectacularly.

I was happy to forgo time in the pub to put the lessons I was learning in the lecture theatre into practical use and it was a very successful little business.

It was a great time to be selling online, mobile phones were becoming increasingly desirable and there were also more and more people getting online every day.

It was a pioneer time because none of the big mobile players took the web seriously as a route to market then.

Why did you take the plunge? I was really interested in mobile technology and back then only one in ten people owned a mobile phone. I passionately believed this would change and that one day everyone would have them.

To me, putting my interest and knowledge of mobile technology to a practical and profitable use was far more interesting than anything else I could have been doing.

What was your biggest break? My biggest break was winning the opportunity to launch our own branded mobile service. We won this opportunity by not giving up on the goal we set ourselves, not being put off by rejection and continuing to talk to all the major players within the industry.

Most of these discussions were fruitless, as the major network operators are very protective of the SME segment, especially Vodafone, the business market leader. We are one of only about 10 mobile virtual-network operators (MVNO) in the UK right now. This is what allows us to set our own tariffs and wholly design our own proposition, rather than simply reselling what the networks themselves offer.

I set us a target back in 2006 of doing this and it seemed impossible at the time.

Only three years later Abica is up and running. We have also done incredibly well to secure Rod Matthews MBE as our chairman.

He was appointed in October 2008 when we rebranded as Abica.

Since setting up Scottish Telecom in 1993 he has been regarded as a leading authority in the telecoms market and his support has been excellent.

What was your worst moment? I got caught up in a legal fight with Glasgow City Council in 2001 when I was trying to get a taxi branded up with logos for both Freedom Mobiles and Orange. As Orange was going to pay for it, the taxi had to carry both logos.

However the Council had what seemed to be a bizarre rule about not being able to advertise two companies on the same taxi, and they wouldn't let our case through.

I spent a lot of money on getting my lawyer to send letters, but in the end had nothing to show for it. I'm always dismayed when people who should know better hide behind their procedures and bureaucracy and fail to look at things pragmatically by taking a common-sense approach.

What do you enjoy most enjoy about business? I am a very practical person and love to get things up and running and moving along. I put a huge amount of energy into everything I do and the kickback I get from that is the satisfaction of seeing a business idea building up a head of steam and gathering a momentum all of its own.

I also love the team spirit of working with people to build something new.

What do you least enjoy? When everyone expects me to know the answer, to everything, all the time: it can be exhausting.

What is your biggest bugbear? It's the mindless, never ending, and hugely frustrating bureaucracy that seems to come with running a business.

What are your ambitions for the future? My aim is for Abica to become the biggest and best provider of telecoms to small and medium businesses, across the whole of the UK.

I want us to be known as the Carphone Warehouse of business telecoms. I want us to prove that it is possible to compete head on with the multinationals.

What single thing would most help? Unlimited and inexpensive capital to fund our expansion and acquisition plans.

What could the Westminster or Scottish government do that would most help? Right now SMEs across the UK have good ideas for growth and offer the best way for the country to retain jobs and help us get through the recession, but up until now the banks have been unwilling to lend to fund business expansion.

This is despite the fact that the sub-prime losses which got us into this mess were nothing to do with business lending.

It is too early to know whether the Government's action to free up the credit markets will actually work, but it is certainly a step in the right direction. Encouraging entrepreneurialism at an early age and putting in place efficient support systems which are easy to find and use would also be a positive step.

What was the most valuable lesson you have learned? It's probably something I have learned from Warren Buffett, and that is to do business with people you like, trust and admire. I recently bought shares in Buffett's company Berkshire Hathaway and went to last year's shareholders' meeting in Omaha. I met the man in person and it is the fact that he comes over as such a well-rounded and accomplished individual that is perhaps most impressive.

He is clearly a specialist in the world of investment, but his philosophies and morals are set on a much wider set of foundations.

I think that breadth of perspective is a very important thing to develop in any commercial enterprise.

How do you relax? I work at least six days a week, so I make up for that by going away twice a year for at least two weeks at a time and just switch off and relax. I'm just back from Asia, my favourite part of the world..

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