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What would you do with a 'small loan' of £1 million? Ruth Shearn, RMS PR

US presidential candidate Donald Trump famously once said that he started off with a "small loan of $1 million" from his father. In the latest in our series asking local business owners about their thoughts on the comments and what they would do with a similar loan, we speak to Ruth Shearn, Managing Director of RMS PR

Ruth set up RMS PR in 1991 and over the past two-and-a-half decades has built it up into a successful, fully integrated agency.

  

If you were given a loan of £1 million when setting up the business, would you have done anything differently? 

Definitely. Initially, I'd probably have panicked at the responsibility before having a serious chat with myself and some trusted confidantes and advisers. 

I honestly think a loan of that scale would have been untenable when I set up the business in my back bedroom, with no funding whatsoever. It has grown organically over the intervening years - I have never borrowed anything. 

Instead of going into PR, I'd have probably gone into property conversion and refurbishment - and been a multi-millionaire by now! 

What difference would the loan have made? Would it have made things a lot easier? Why? 

It's such a different scenario from my reality, it's difficult to say. It would have made a huge difference but I don't honestly think 25 years ago I would have known what to do with it.  

I'd have probably searched out safe investments and taken advice from a professional wealth manger and just carried on doing what I did, with a nice, fat, safety net. 

How would you have used the money? Would you have spent it on specific purchases, or perhaps invested it? 

Using the experience and hindsight that I have now, I'd have invested the money in staff and expert, trusted advisers. I'd have bought property (which I have done anyway without the loan) and I'd probably have set-up a few side-lines, too. 25 years ago, I'd just got my first ever PC and still used a fax machine. The digital revolution hadn't started so the times were very different. 

How did you start your business? What financial help, if any, did you receive? 

I had previously worked in a large advertising agency. The culture had changed following a buyout and one of my clients suggested if I started up on my own they'd move their account to me. They were true to their word and even lent me a fax machine! I borrowed my dad's clapped out Ford Sierra and was delighted to pay him £500 for it after three months (naturally, he tried to refuse but I was adamant about not owing anything to anyone). I've never owed anyone a penny since, except for using credit cards for convenience and trade creditors, whom I invariably pay strictly on time. 

Are you pleased you did things the way you did, or would you have preferred to have received a huge loan instead? 

Again, hindsight is a wonderful thing. The decisions I took 25 years ago were the right ones for me at that time.  

With a massive loan, I would have been constantly fixated and stressed about paying it back, with interest. As it is I sleep most nights. 

What are your opinions on Donald Trump's comments suggesting he considers a $1 million loan small? Would you agree that it is 'small', or would you consider it a significant advantage when trying to get ahead? 

My views on Trump in general probably couldn't be printed! His comments are the comments of a rich kid who's completely out of touch with reality. Of course, $1 million is not a small loan - there again, I have come to realise that the size and value of money really does vary from sector to sector. He made his money in property so it probably wasn't a huge amount in that context. 

What size loan, if any, would you recommend prospective entrepreneurs and business owners seek when setting up a business? 

Impossible to say as it depends on what they want to achieve and their sector. Also, individuals have very different attitudes to debt. For me, I hate to owe any money. Yet others I know in business are quite happy to borrow. 

They should never borrow more than they absolutely firmly believe they can pay back by using their enterprise, skill, work and acumen. 

What advice would you give to other would-be entrepreneurs and business owners just starting out? What would you advise if they were presented with a loan of £1 million? 

Sit down and think before you do anything! Don't spend it all. As my dad used to say to me about gambling, "Bet cautiously at first until you've won your stake money back. Then you can start playing with the house's money and be a bit more adventurous!" 

I may not be a typical entrepreneur but I'm extremely good at poker! 

Borrowing (or inheriting, for that matter) large sums can have a crippling effect on immature and inexperienced people. They begin to think they're either exceptionally talented or exceptionally lucky. Unfortunately, life can have a nasty habit of teaching otherwise.