Lara Morgan became a force to be reckoned with in the luxury toiletries world when she founded her company, Pacific Direct words: rachel bridge FIVE YEARS AGO Lara Morgan promised her staff that if the firm’s profits reached £1 million, she would take them all on holiday to Barbados. Last year she delivered on her promise. Morgan and her 26 members of staff flew to the Caribbean for an all-expenses-paid week-long vacation. It is not the first time Morgan, 48, has shown her appreciation to her staff. Last year she sent them all a huge bouquet of flowers after they exceeded their monthly sales figures. Another time she taped £50 notes to the bottom of their chairs for them to find. She says: “It’s just a laugh. There are a lot more good people in this world than there are bad, and if you give people a chance it generally produces motivation, teamwork, and momentum. It is important to me that we have fun in the workplace. I’m here so many hours of the day that if I’m not enjoying it, what’s the point?” Born in Germany, where her father was serving as an officer in the British army, Morgan was brought up in Hong Kong after her father was relocated there, and from the age of 11 was sent to boarding school in Scotland. She left school at 18 to get a job in Hong Kong selling business gifts to banks and airlines. After three years she went to live in the Middle East with her then fiancé, where she sold advertising space for Yellow Pages, ending up as national accounts manager overseeing 128 people. When the Gulf War started in 1991, Morgan and her fiancé moved to New Zealand, where she ran triathlons instead of working until the two of them returned to the UK so her fiancé could study for an MBA. On the way home, they stopped off to see her parents in Hong Kong, where Morgan was approached by the company she had worked for selling business gifts and asked if she wanted to try selling them in the UK. She said “yes” immediately and on arrival in Britain started ringing round hotels. She got her first order, for a pre-threaded needle sewing kit, from the five-star Dorchester Hotel in London. Recalling that time, she says: “As I left their office they reminded me that they would only take a few at a time, invoiced as and when delivered, to be delivered within 24 hours, and I was asked if I would hold stock, have a warehouse and customise their order, to which I replied, ‘yes’, that was all fine. Which was rubbish – the warehouse was underneath my fax machine at home.” Morgan discovered she had a talent for selling, however, and by the end of her first year had managed to rack up sales of £108,000, importing all the products from Asia. While living at her grandmother’s home in Bedford, Morgan recalls: “I used to get up at 6am and drive to London, do five or six appointments and be back in the office by about 4pm. Then I’d do everything else – the rubbish bins, the phone, the fax, quotes, typing, the accounts, the bookkeeping…” It was largely a process of trial and error. As she explains: “I was continually asking people what to do. It is of huge value if you have no pride and no shame and are willing to say, ‘Look, I don’t know what I’m doing, could you help?’” The business soon outgrew her relationship with her fiancé and she moved to a one-bedroom flat – still in Bedford – which doubled as an office. She continued to work from home for the next four years until her new boyfriend insisted that the office move elsewhere. Then, in 1996, European cosmetic regulations changed, making importing products more difficult. Morgan decided it was time to start making her own. She spent £200,000 opening a factory in China and another £39,000 taking over one in the Czech Republic. “We did them at the same time, rather stupidly. It was not planned. I bought the factory in China and then our Czech supplier said they’d run out of cash and could I find some. I said yes – in return for 51%.” By 1999 the business was growing so fast Morgan realised it was time to work out where it was heading. So she booked herself onto a business growth development course at Cranfield Business School in order to write a business plan. While she was there she also came up with the idea of the promise of a free holiday. “When you are making profits of £200,000, it seems pretty arrogant to say we are going to make a £1 million profit, so I felt it was a good idea to give people a significant return,” she states. Before her incentive could become reality, though, the business hit a major hurdle. Two years ago, Morgan was forced to make 30% of her staff redundant. “I almost lost everything. The combination of foot and mouth [disease], SARS, bird flu and the run up to the war in Iraq meant that we weren’t seeing the same growth. It was pretty serious.” She survived by staying determinedly upmarket and selling to only the best hotels. Pacific Direct is now expected to make a £2.5 million profit in 2006 on sales of around £17.5 million. It supplies hotels in 103 countries, including the Waldorf Astoria in New York, and Sandy Lane in Barbados. Now 38, with three daughters aged between two and eight, and a husband, Charlie, who runs the company’s IT department, she thinks the secret of her success is to be continually learning. She says: “I’ve just come back from a trip to Italy and on the way I read business magazines. When I came back, I put 18 different sheets of photocopied articles into people’s in-trays. I invest in my staff a lot – but I haven’t forgotten myself. I also need to learn a lot.” Morgan is a great believer in doing things her way: “I like to do things differently. I don’t want to be anyone but me.” My Big Idea by Rachel Bridge, published by Kogan Page (£14.99)