The Pitch 2009 judge profile: Deirdre Bounds - accidental millionaire

The best business ideas are often the simplest and come when you least expect them. That's certainly the case for Deirdre Bounds.

In 1994, Bounds was, in her own words, a bit of a drop-out and living in a far from salubrious bedsit in Leeds. After splitting up with her boyfriend and bored with her corporate marketing role, she had decided to travel around the world teaching English as a foreign language (TEFL). But now she was back in the UK and it was time to decide what to do next.

Fast forward 10 years and Deirdre Bounds had become a millionaire having sold a business to one of the world's biggest travel companies. Not bad for a self-confessed lost soul but how exactly did she do it?

Where it all began

On returning to Yorkshire after her foreign adventures, Bounds rejected the corporate life and got a job as a youth worker. It was this decision which proved to be crucial to her future success as an entrepreneur. "The kids kept asking me how could they teach English and travel like I had," she says. "This got me thinking that the gap year thing could really take off and why shouldn’t young people from comprehensive schools have the opportunity to travel?"

Bounds decided to test the water by holding her first training course in Birmingham. She put an ad in the local paper offering training for £125, a big discount on the £1,000 she had paid for her own TEFL training. The course sold out within a week. "The cheques started coming through the door from people I’d never met," Bounds says. "I thought, hold on, I might be on to something here."

Buoyed by her early success, she approached Leeds Education Authority. As luck would have it, the organisation had some European funding to spend and jumped at the chance giving Bounds a contract to teach in 12 of the city's schools.

Not before long, many of her students began enquiring about how they could secure work placements overseas so the entrepreneur began faxing schools offering their expertise for free. Teachers from St Petersburg got back to her saying they were interested in coming to Leeds to visit Bounds’ school. A good result. The only problem was, she didn’t actually have a school to show them.

"When you're put in a dilemma like that you can fudge it and get a hotel room, avoid the issue or you can say yes. Most people would probably try and fudge it. I said yes." Ever the opportunist, Bounds approached the head teacher of Leeds’ Notre Dame sixth form college, where she had been running courses, and asked whether she could borrow his office. "He laughed, thought about it and said, ‘Deirdre, I've got to see this.'"

The plan worked and the Russians signed on the dotted line. Bounds later admitted the school they'd seen wasn’t hers but fortunately the deal remained intact.

As business began to flood in, i-to-i, as it was now known, moved into new premises including two portakabins at Notre Dame college followed by an office above a pizza parlour in Headingley, an area of Leeds popular with students, Bounds’ main target market.

Encouraged by her success and as staff numbers increased, the company moved into even bigger offices with the largest 8,000 square feet. "It was ridiculous," Bounds admits. "We never used most of the space and before long we were all rattling round thinking 'what have we done?'" The entrepreneur urges other to take heed. “Make sure you’re based in premises which allow you to grow," she advises, "but don't move into premises where you can't otherwise you'll get landed with an 80 grand bill for your rent like us."

Bounds soon realised that the internet was key to her future success and with the help of a student took her TEFL courses online creating another profitable revenue stream.

Growing pains

As the 21st century arrived, i-to-i had developed from a tiny business run from a Leeds bedsit into one turning over £10m and operating in 35 countries. But Bounds was beginning to feel the strain: "I had created a monster. I was having to deal with problems in the US and had crap going on in Australia. It was really starting to do my head in."

Realising she was no longer enjoying life running i-to-i, Bounds began thinking about an exit. "There are two types of entrepreneurs," she says. "One is the dealmaker who see deals and make money. The other is the creator, who come up with a concept and take it to a certain level. I’m a creator." It was time to move on

During a chance meeting with a director of First Choice at a travel event, Bounds seized the opportunity to hand over her business card and ask whether she could stock her brochures in his company's branches. "He called me the next day saying that's never going to happen but we've looked at your website and we're interested in buying your business."

Bounds admits that negotiating the deal was easy compared to the problems with the business which the due diligence process highlighted. "Our record keeping was shambolic because we had grown so organically with someone like me running it. I didn’t care for those things. I just wanted to create a product and sell it." At one point, Bounds had 23 temps focused on getting her accounts up-to-date but fortunately it didn't impede the deal and First Choice bought the business for £20m.

Poor accounts management wasn’t the only issue which could have jeopardised the sale though.

During due diligence, the entrepreneur was approached by a production company working for Channel 4 to appear on Millionaires' Mission, a programme featuring seven successful business owners travelling to Africa and attempting to use enterprise to fight poverty. "We were meant to be signing in early February but I said, sorry guys, I’m off to Africa!," Bounds laughs. "You should've seen my lawyer’s face. 'Let's hope I don’t change my mind while I’m out in the bush!', I told him." Fortunately for her lawyer she didn't and the deal was signed.

Lessons learned

Bounds says she never had any intention of running her own company and confesses to feeling "like a bit of a fraud" when it comes to business. She admits to "spending a lot of money and wasting a lot of time" and says staff were her biggest nightmare. "Business would be great if it wasn’t for having to manage people. People did my head in as I’m sure I did to them. Managing staff is something I never want to do again." Despite that, Bounds currently has two new businesses on the boil, the first of which launches in July.

She is also about to publish a book: 'Fulfilled: A personal revolution in seven steps,' based on the 12-step programme used by Alcoholic Anonymous, Narcotics Anonymous and other similar recovery services.

 Although Bounds has never had to turn to the likes of AA, she puts her success entirely down to the programme. "It is a process which purges you of ego, gives you more courage and integrity and sheds the wreckage of your past," she explains. "I've been following it for 19 years. Before I found it, I was floating around the world very much a lost soul."

The book launches in the UK on 15 June, has been translated into six languages and arrives in the US in January 2010. Bounds' ambitions are big with the entrepreneur hoping to repeat the success of global literary hit The Secret. Given her past achievements, very few would bet against that.

Deirdre Bounds was on the judging panel at the Midlands heat of The Pitch 2009, BusinessZone.co.uk's search for the UK's best new businesses. The overall winner will receive business support prizes worth £50,000 including one-on-one mentoring from former Dragons' Den judge Doug Richard. To find out who won the heat, click here.