Alec Reed, 75, doesn't have fond memories of his schoolteachers. "They said I lacked ambition," recalls the founder of Reed Recruitment. "But I was making lead soldiers at home on my mother's kitchen stove. I was working with the milkmen every morning at 5am for two bob a round. To say I was lazy was ignorant."
The son of a civil servant, Reed grew up in an end-of-terrace house in Hounslow, west London. He left school at 16 and became a trainee accountant for Gillette, working part time for a girlfriend's father as an estate agent. "He was a sole trader with a double-fronted shop and I was his only employee. So I said to him one day, 'You're selling carpets in the other half of the shop. Why don't you turn it into an employment agency?'" Reed was turned down. But he didn't give up. "I left it for two weeks then said: 'Well, if you won't do it, will you rent me that half? You make £10 a week from your carpets, so will you rent it to me for £10 a week?'"
That's how, with £75 in his pocket, the 26-year-old came to open his first employment agency on Kingsley Road, Hounslow, in 1960. "It went like a bomb." Whether through "intuition or stupidity", he went in charging 25% more than his rivals, at a week and a quarter's wages. He also took out advertisements in local papers that, he says, "were supposed to be funny 'Alec Reed went to Cambridge and Oxford. He thought they were both nice cities' rubbish like that."
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But the main factor in his success was luck, he reckons. "It wasn't until years after that I realised why I did well. It was because I opened in Hounslow just as they were developing Heathrow. And what I did was find the centre point of a great labour battle between the Great West Road and Heathrow." Drug group Beechams, defence giant BAE and state-owned airline BOAC started pinching each other's staff. "Right from the word go it made a substantial profit."
Within a year he'd opened a branch in nearby Feltham. "I thought this was easy, let's open more." A further ten agencies followed. "But I was stuck with two making money and ten losing money." So when Reed heard a rival was looking to move into Hounslow, his best patch, "I had to outbid him for the property. So I opened up another agency under another name." The business continued to grow and in January 1971 Reed went public, floating the company for £1.5m when it was making £315,000 a year in profits. "It was the biggest mistake I ever made, because I was giving away so much growth. The people who bought the shares in 1971 made lots and lots of money. The original price turned out to be a steal."
Even so, Reed hasn't done at all badly. The firm now has revenues of more than £750m a year, while Reed and his family are worth more than £60m. He plans to give much of it away through The Big Give, a charity that matches donations of up to £5,000 pound for pound. But his three children won't go without. "I'm not one of those guys who thinks you should starve your kids. I think that's ridiculous. I mean, you've brought your kids up to have a certain standard of living. It's cruel then to chuck them out of the nest."
Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.
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