This first-time business owner made a profit in year one

4-minute read

Thu Feb 15 2018

Brought up in foster care. Joined the Army. Lost his sight. Opened a successful hotel that he’s never seen with his sight. This is a story of courage and a life reinvented. Of a man with untameable vision of what he wants to achieve in business.

Meet Paul Jacobs, Britain’s youngest and lowest ranked ex-serviceman to receive the George Medal for bravery. And, since February 2017, the proud owner of a nine-bedroom guesthouse in The Wirral, North West England.

Paul’s back story is important, not because he’s had it tough but because his sight loss means becoming a small business owner posed some logistical challenges. And they could only be overcome by, in his words, ‘working with the right people’.

What attracted Paul to the hotel business?

So when he decided to buy a hotel, Paul knew he couldn't do it alone. But first, why did he buy a hotel? After all, that's a big decision for anyone, let alone someone with no business or hotelier experience. He explains:

“I’ve always been on my own, in a sense. Regarding being in foster care and everything. So I’m quite happy in my own company.

“When I was in the Army and on leave from my post in Northern Ireland, I used to pick a B&B and go and stay in Liverpool, or Birmingham or wherever. It was a way of getting away from the blokes because it’s one thing being in a brotherhood but you don’t want to spend your whole life with them.

“I used to love just wandering around, just getting to know different cultures.”

But when he lost his sight on active duty in Afghanistan, Paul had to reinvent himself. To go from a man who didn’t need anyone, to a man who relies on other people to realise his business ambitions. So when he decided to buy Peel Hey, he got in touch with several banks to see if they could help. And it was Barclays Business bank that Paul connected best with. 

The key to success – choosing the right partners

Paul Jones is the Barclays Business Relationship Manager in the Merseyside area and he became Paul Jacobs’ one point of contact. Sitting down together to discuss ambitions, business plans and commercials, the Pauls realised a commercial mortgage was the only real option. These can be very difficult to secure – especially if, like Paul Jacobs, the applicant has no prior business experience – and they can take up to three months to go through the approvals process.

By working through the plans together, Paul Jacobs (Peel Hey) was able to use the commercial mortgage to take over the hotel in February 2017. And because he was so impressed by the support he got from Paul Jones (Barclays), he was happy to be introduced to Nicola Colligan from Barclaycard Payment Solutions. And when her message and approach were consistent with Paul Jones’, he trusted her too.

Paul Jacobs wanted to bring Peel Hey up to date, to make it a real destination for guests and diners. He knew he needed to upgrade the technology, as well as the décor. One part of this was card acceptance.

Nicola (Barclaycard Payment Solutions) spoke to Paul Jacobs about the most cost-effective, customer-friendly ways to take card payments. She explained that portable card machines – one for reception and one for the restaurant – could give customers a quicker, more personal experience. That training the staff to take contactless payments for all transactions within the current contactless limit would save the business money in authorisation fees. And that making the switch would help the hotel restaurant feel more like a destination in its own right, rather than an add-on for guests only.

“Nicola sold it to me. She’s a wonderful person and she put her best foot forward. And Mr Jones has been an outstanding manager. He sat me down and he looked at all the different security aspects, looked at all the money coming in and going out and said we can put this in place and that in place. So if money does go missing, you’ll know it can only be that person or that person.”

Being blind means that such security measures are crucial for Paul to be able keep a track of his incomings and outgoings. After all, he can’t sit in front of his screen going through a set of accounts.

But when it came to switching to Barclaycard, Paul realised he had a lot of issues with legacy contracts and was told that he had to stay with the existing provider. And because he couldn’t read all the necessary policies, he didn’t know his rights. He didn’t know that he could switch until he was taken through the relevant policy documents line by line so he understood his rights and responsibilities.

Without this help and the support he got from Nicola (Barclaycard) he wouldn’t have switched. But his decision to switch to Barclaycard was also based on price, tech upgrades, education and cash flow.

Why switch payment providers?

Price

During negotiations, Nicola realised she could save Paul and Peel Hey around £1500 in Merchant Services Charges (MSC) over 12 months. But much more than that, because the old card machines Peel Hey had were not contactless-enabled and therefore the staff didn't know how to accept contactless payments, the business was paying more than necessary in authorisation fees

Did you know that there’s no authorisation fee on a contactless payment, but there is on a chip and PIN payment?

To put that into context, by taking contactless payments on afternoon tea for two at Peel Hey, cups of coffee, drinks and some lunches that cost less that the current contactless limit, the hotel saves a lot of money in charges. As Paul nicely put it:

“You can’t spend too much in the first year; then there’s nothing left for the second and third years!”