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“The entrepreneurial landscape in the UK is actually very good”

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Name: 

Florian Richter

Role and company: 

Managing director UK, SumUp

Employee numbers: 

SumUp has over 130 employees internationally.

Growth forecast for the next three years:

SumUp has only just launched, so we’re hoping for exponential growth over the next three years. We’re already in the UK, Ireland, Germany, Austria, Italy, The Netherlands and Spain, and we’re planning on expanding to over 20 countries over the next year or so. We’re looking to reach small and medium sized businesses that have a problem accepting credit and debit card payments, so the sky’s the limit!

In under 50 words, what makes your business distinctive in its marketplace:

SumUp is a new service which enables small businesses to take credit and debit card payments using their smartphones, with no monthly fees. With SumUp, merchants use a free app and card reader which turns their mobile devices into tills capable of processing payment, quickly and securely.

What’s the big vision for your business?

Our vision is simple – we want to make it possible for any business or sole trader to accept card payments, wherever and whenever they want. At the moment there is a big problem in the industry, as so many small businesses still aren’t in a position where they can take card payments because of the high monthly costs and complex paperwork associated with renting terminals from banks. 

This is creating a payments divide which means that some small businesses are missing out on making sales – or they are facing cash flow issues – simply because they can’t take card payments. We’re trying to change this, by making it possible for merchants to take debit and credit card payments with their smartphones, using just an app and a free card reader, with no monthly fees or hidden costs.

Current level of international business, and future aspirations: 

We’re an international business and launched in the UK, Ireland, Germany and Austria in August 2012. Since then we have expanded into Italy, The Netherlands and Spain, and we plan to move into other continents by the end of the year. 

Biggest career setback and what you learned from it: 

A few years ago I was given an opportunity to help start up a new business. But it wasn’t my own idea – the wheels were already in motion, the business model had already been developed and I was asked to take the reins to help make it a success. I was flattered and excited by the opportunity, but as the product had already been in development for a while there was little scope for changes and more funding. 

I knew that the product needed more work, but I tried to put my gut instinct aside to make it work based on what we had, as we couldn’t get more funding until the investors saw proof of concept. It was much more difficult than I had anticipated as I was trying to make something a success that I didn’t really believe in. 

A key learning I got from that experience is to always trust your instincts about a business model and product you are working on. If it doesn’t seem to be working and you don’t really believe in it, don’t waste your time. After all, if you’re going to spend your life working on a start-up that you don’t love, it will be hard to make it a success.

What makes you mad in business today?

At SumUp, we’re trying to innovate in a very established market. We’re introducing a new product that doesn’t really fit into existing rules and guidelines around how to take payments. We therefore have to deal with lots of different regulatory bodies, which can be very frustrating as it takes time and, as a startup, even two months can feel like a lifetime. Of course all of the regulations are important, particularly those around security, but it is frustrating to see how long it takes for the guidelines to be adjusted.

That’s what makes me mad in business today. It’s hard to be an innovator if you’re working in an established market and are trying to make a real change, when part of this change also includes changing regulatory guidelines/bodies before you can really get going.

What will be the biggest change in your market in the next three years?

I really feel that the biggest change in the payments industry will be what we are working on i.e the ubiquity of payments, so that any business – no matter how big or small – will be able to take card payments, wherever they are. 

Next, I think we will see more card payment schemes teaming up with loyalty schemes, so if you go into a shop, for example, the shop will automatically recognise you by your phone and will give you the option to take payments there and then, or will give you special discounts based on purchasing habits. The big players are already starting to do this, but it is the integration of this technology for small businesses that will make a real difference in the industry over the next few years.

Can businesses in your sector/industry access the finance they need to grow? If not, what can be done to improve things?

It is always much easier to get funding if your idea falls into one of the hot topics that VCs are on high alert for that year. A few years ago this was social networks, then daily deals, and now mobile payments technology. But if your idea doesn’t fall into that particular industry, then you do have to rely on your founders, their track records and connections much more. 

So much of it is about having the right contacts, so if you get an introduction to a good VC by a successful entrepreneur, you’re already part way there. It is therefore so important to have a business mentor, and if you don’t have a mentor or someone to help introduce you to angels/VCs, you should make sure you get one to help guide you and introduce you to the right people.

How would others describe your leadership style?

They would probably say that I am empathetic, understanding and interested. I always try to explain to my employees why we are doing something so they see how it fits as part of the bigger picture. The worst thing you can do is tell someone “this is the decision, so get on with it.” If you give the right background information and put things into perspective, employees will understand the rationale behind it and will go away feeling more empowered with a clear understanding of the bigger vision.

I don’t believe in a hierarchical structure. Trusting people with business information tends to have a big motivational impact on employees, and being open and honest about your decision-making makes delegation much easier, too. But you only get that by allocating a lot of time to people management, through regular team updates, face-to-face meetings, and so on. It takes time, but it is definitely worth it for helping build a positive working environment.

Your biggest personal extravagance?

I’m obsessed with gadgets. From phones to laptops, I’m always keen to get my hands on the latest tech. Although given the industry I work in, I try to justify my technology extravagances because it helps me stay ahead of the game! 

You’ve got two minutes with the prime minister. Tell him how best to set the UK’s independent, entrepreneurial businesses free to prosper:

Compared to other countries in Europe, the entrepreneurial landscape in the UK is actually very good, so the government should be congratulated for helping make it easier for businesses to start up here. The labour and working laws are definitely much better than in mainland Europe, and it’s also easier to get funding as all the big investors are based in London.

However, it would be good if you could protect the earnings on a company’s sale. At the moment, if you sell a company you have to pay income tax, but it would be good if that money could be instead used to re-invest into another business, helping drive further economic growth. This would mean that more entrepreneurs think about starting up new businesses, rather than just selling out.

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