Generating cash from caring
IT’S NOT often that an entrepreneur comes up with a multi-million pound idea while out with his elderly aunts looking at care homes around the south of England. But that is what happened to ex-advertising whiz Mike Parsons.
That was back in 1988. The dismal state of the care homes that he visited sparked an idea that would eventually grow into Barchester Healthcare, which provides luxury homes for older people, and is one of the UK’s most successful private companies.
Parsons’ first foray into entrepreneurialism was as founder and managing director of KHBB, an advertising agency that he sold to Saatchi & Saatchi in 1985. The contrast between then and now isn’t as stark as people think. “Both advertising and the care home business have similarities. To succeed at both you need to take into account the customer’s point of view,” Parsons says from his office in Chelsea Harbour, close to Stamford Bridge, the home of his favourite football team, Chelsea.
“There is lots of fun in advertising and the media, but what I am doing at Barchester is so much more worthwhile,” he adds.
He started Barchester with £650,000 of his own money and a £1m loan from the Bank of Ireland. It’s also 52 per cent owned by the Irish investing trio: JP McManus, John Magnier and Dermot Desmond.
It’s been a good investment for all concerned, it seems. Barchester’s turnover for 2009 is expected to be £408m. The business started with a staff of three, now it employs 300 people on the administration side and 15,000 staff around the country to look after Barchester’s 11,000 residents.
Educated in the state system, growing up in a working-class family in the East End fuelled his ambition. “I’m not hugely driven by wealth but I certainly was driven by a lack of wealth,” he says.
His dedication to the care home business is clear from his emotional attachment to it. His father spent time in a Barchester care home before he died. He also calls his proudest moment a visit to a care home in Edinburgh where a resident was celebrating their 100th birthday: “It brought a tear to my eye when Dr Barclay, who has lived at our home for 12 years, said that it was actually living at Strachan House that has kept him alive.”
Parsons is forthcoming with the other side of the coin. He recently received a letter from an older lady who is struggling to pay the £800 a week it costs to care for her husband in one of his homes. “I will obviously respond. I’ll make sure she is aware of all the benefits that she can claim from the government, but I am not sure that will solve her problem.”
Parsons says that because a job for life is no longer relevant, switching between industries offers an opportunity: “I think it’s great to do two things, maybe even three, I think there is a third idea in me.”
CV | MIKE PARSONS
Age: 59
Lives: London
Education: Economics at Sussex and Oxford Universities; MBA at London Business School, Diploma in International Management at Hautes Etudes Commerciales, Paris and the Graduate School of Business Administration on Wall Street.
Favourite book: “I’ve just read the Stieg Larsson trilogy, but usually I like historical biographies, Churchill is definitely my favourite figure.”
Things could have been different for Parsons, prior to starting care homes, he considered fitness clubs.