Rachel Watkyn: ‘At 14 I knew all the bailiffs by name’

Rachel Watkyn had a troubled early life, spending some time in a care home as an infant and suffering financial hardship when back with her family. She made it to university, though, getting a business degree from De Montfort then worked her way up at the software firm Tetra. Complications after appendix surgery led her to move back home and in 2006 Watkyn, 53, launched a sustainable jewellery business that evolved into the packaging firm Tiny Box Company. In 2008 she won a £60,000 investment from the entrepreneurs Peter Jones and Theo Paphitis on the BBC’s Dragons’ Den and now the company turns over £10 million a year and employs 90 staff including her husband, Steve Edmunds, who has three grown-up children. The couple live in Crowborough, East Sussex.

I can’t be trusted with money because I lose everything. If you give me money, you can guarantee that I’ve lost it by the end of the day. My husband gave me €100 at an airport a couple of years ago and I put it in my back pocket. I went to the toilet, came back, money gone. I’ve lost my purse hundreds of times. Genuinely.

I’ve worked out that my brain only has so many slots and the slots are filled up with business things and stuff that needs to be done, so for things like car keys, wallet, phones, there’s no capacity left. Everything is done on my phone, so right now I’ve got about £40 in my wallet and if I go to Brighton or something, I’ll see a homeless person, especially a woman, and I won’t be able to resist emptying my wallet and giving them all my cash — if I haven’t already lost it.

I’ve got three or four and I pay them all off every month automatically, because if it was up to me, I’d forget. And I lose them all the time. I lost my Amex card. It had been lost for three weeks and I hadn’t noticed. I’ve actually been really lucky. I once left my purse in a pub and about three days later got a call to say they had my purse with everything in it.

I am generally a saver, but I have a terrible weakness for new clothes. That’s my nemesis. I can go four or five months without buying anything clothes-wise and then I’ll have a splurge. But I never buy fast fashion — although I was in Primark on Saturday with my granddaughter and hated every minute and refused to buy anything. But I am a bit of a peasant really. I don’t like fancy restaurants. I can’t stand the pretence.

Last year was a mean year. Probably about £140,000, because I didn’t take any dividends. I left all the money in the business. The peak was £10 million turnover and ebitda (earnings before interest, taxation, depreciation and amortisation) on that was about a million, but as I say, we’ve just kept it all in the company, which has left the company rich as opposed to us. If it’s been a good year, between us we will take half a million out.

Contrary to popular belief, going on Dragons’ Den wasn’t the financial accelerator. Apart from the initial 60 grand we got from the Dragons, we’ve never taken any loans or anything. For the first five years, I was taking £16,000 a year. Then I went up to £24,000, and in about 2018 or 2019 I started taking more than £100,000.

I went to see a medium a few years ago after my sister died and the medium, who knew nothing about me, said: “How are you not down an alley with a bottle of vodka?” Because she could just see all of my past, which by anyone’s standards was challenging.

I was at Notre Dame in Norwich, which is a really expensive prep school. That was funded, which I didn’t realise, by my stepfather not my real dad. My fees were paid but there was no money for anything else. Me and my sister, surrounded by all these posh rich kids, used to hide our lunches in the school canteen as they’d be sarnies from Mum’s homemade bread with a bit of lard and a couple of bits of cucumber.

At this point my dad had set up a spiritual healing sanctuary in our house. We always thought he was a businessman but when he died a few years ago we discovered he’d racked up debts of £70,000, which was a lot of money in the Seventies and Eighties. He was like Leonardo DiCaprio’s character in Catch Me If You Can. He went from being an accountant and a financial adviser to an auctioneer, to an estate agent, to a grade I and grade II listed buildings expert, to a spiritual healer. Consequently, I have a typical entrepreneur mindset, but it’s never been about the money.

Prior to setting up Tiny Box, I had worked in software all over the world including putting in a finance system for the corrupt government in Sierra Leone. When I decided to set up Tiny Box, I was like: “I’ve literally got nothing to lose by trying it.” All I’ve ever wanted is financial security because I saw my dad lose everything when I was 14. We had to move home, we were taken out of school, like literally everything gone, bailiffs round all the time, we knew them on first-name terms. My mindset has always been to never be back in that situation. That’s always been the core driver for me.

I own a six-bedroom house in Sussex with a mortgage and we’re in the process of buying a flat. I would love a house in the British Virgin Islands. A house by the sea with turquoise waters and sun.

I think so, yes. While my dad was trying his hand at various crazy enterprises Mum was doing the same thing. She set up a dating agency, she set up a map business. She had a genealogy business. She had an antiques shop. I have a brother and two sisters — one died — and we all work for ourselves, so that entrepreneurial spirit is clearly in the blood. The problem is, we don’t know how to conform.

Yes. I do it two ways. I’ve got some shares in Sage and Aviva that I’ve had for years. And then I invest in funds, which is a lot safer. I invest in what I deem to be safe funds. I’ve got growth funds with Vanguard and Hargreaves Lansdown. I’ve also invested in crypto and have increased my initial investment of £500 by 500-600 per cent.

My pension is not great. I’m looking at property as a way forward, but I can’t see myself retiring and whatever happens I don’t think we’d flog everything here. We’d still keep a house because of family and everything. We have a dodgy gene in our family, I’ve had cancer three times, so it just makes me reluctant to put everything into pensions, because I’m like, “Well, I may not live that long.” I get scanned every six months and right now I’m OK. All my three cancers have been primary cancer, which were caught really early, but it’s quite limiting in life. So there’s no point in putting all my money to come out at 67. I’d rather have access to it now then whatever happens I can afford to go out with a bang.

Tiny Box, definitely. I put £24,000 in to start with and if you wanted to buy me out now it’d cost you between £10 million and £15 million.

• Dragons’ Den company Tiny Box cuts one in three staff

I invested in a clothing and lifestyle business called Know the Origin just before lockdown. How much did I burn? About £22,000 because after lockdown no one had the money to buy eco-friendly or sustainable goods so the bottom fell out of the market. It’s still going, but it’s limping along with a broken leg.

I don’t think we needed to spend £1 million on a six-bedroom house as it’s only me and my husband, but we bought it for way below market value at the very start of the first lockdown so it was good timing. We’d probably get £1.6 million for it now.

Clothes. I don’t do big designer brands though as what’s the point in spending £150 on a posh cashmere jumper only for the moths to eat it? Other than the house, our big expenses are nice holidays. We went to Bermuda in October, which was lovely.

Continuing to save more than we spend. There are moths coming out of my husband’s wallet anyway. He hates spending money. Where I’m trying to get to is that if my dodgy genes do fail me, then my husband will be fine for the rest of his life without having to worry.

Micro-funding for third world women. That’s my ultimate game. If there was any left after that I’d buy the house in the Virgin Islands. I’ve seen a three-bedroom one, right on the beach, up for sale for $2.6 million.

We donate every month to the Chailey Heritage Foundation, which is a centre in Lewes for children with severe disabilities, and I have monthly subscriptions to the air ambulance and Plan International.

What is the most important lesson you’ve learnt about money?

Humility. You can be right up the top of your little ivory tower and if the foundations aren’t there it can be all the way down again. You can go round being as flash as you like but if something suddenly changes — legislation or your health — and suddenly you’ve lost it all, then it means jack shit.tinyboxcompany.co.uk