Around 1969, the hi-fi stereo market was starting to grow. Instead of buying old-fashioned mono record-players, people were starting to play their records on a stereo system, which comprised a record deck, an amplifier and a pair of speakers. The record deck would be mounted on a small wooden plinth with a tinted plastic cover on top and looked very smart and sophisticated.

The plinth and cover was essentially a lump of wood and a lump of plastic. K & K imported them from Denmark and sold them to me for about £3 10s wholesale. I was able to sell a few to the smaller retailers who didn’t know K & K, but most were buying directly. The margin was really thin and the item was quite bulky – just fifty of them would fill up the whole van – but they were selling well. This annoyed me because I instinctively felt that they didn’t cost much to make. I was sure there was something for me in this market.

I was getting pissed off selling stuff and just making a few pennies as a wholesaler. I needed to find a breakthrough where I could make some real margin. I decided to investigate making plinths and covers myself. The wood side of things was no problem. I explained to Johnnie and Izzy what I wanted made and showed them a sample. Having spent all their lives in the cabinet-making industry, they said, ‘It’s easy – it’s a piece of nothing. We know twenty people in the East End who can make them for you.’

‘How much do you think they’d cost?’ I asked.

‘That? The plinth section? No more than a pound.’

‘You’re kidding me. They're charging me three pounds for it.’ A total rip-off.

Johnnie took me to see some fellow in the East End. I gave him a sample plinth and sketched on a piece of paper how I wanted it modified – I had an idea how to enhance the Danish design and make it look a bit bigger. Within a couple of days, the guy had made me some samples. I negotiated him down to 17s 6d and ordered 1,000 pieces.

I’d located someone in Highgate who could make plastic lids for me using the vacuum-forming process. This entailed taking sheets of tinted Perspex (which they bought from ICI), cutting them to size, sticking them in a hot rig and, by using suction, shaping them. The cost was 18s each.

So, with a 17s 6d plinth and an 18s cover, I was in business for less than two quid. I started selling loads of them.

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The plinth and cover market was booming, but my orders were falling now that other people had cottoned on to the fact that you could get these plinths made in the East End. Plus, there were lots of vacuum-formers around. It was great for the East End chippy who’d previously scraped a living making bedside cabinets – he was having it off big time now. His factory was awash with plinths, not just for me, but for everyone.

I complained and asked if he felt he owed me anything. He thanked me for showing him a new area to exploit, but that was about it – business is business. I think he might have bought me a bottle of whisky at Christmas. Fair enough! I don’t have exclusivity on entrepreneurial ideas, even if they are mine. The competition always catches up, and after they hit the market there’s a window of opportunity to exploit them. The secret is to move on.

I had always felt that the plastic cover was expensive, so I decided I needed to find another way to make them, to look at the problem in a fresh way, as I’d done before.

On Sunday that week, Ann and I visited my mum and dad’s for tea and I noticed they had a plastic butter dish – a red-tinted one. As I lifted the lid up, I saw a moulding mark, known to me now as a sprue mark – the place where the plastic is injected – and in that moment, something clicked in my brain. Here we had a coloured, see-through plastic butter lid, and all I needed to do was to make a similar item but much bigger, also see-through, with a nice grey tint to it.

The following Monday, I got straight on the phone to the plastic manufacturers’ association of the time and described the product I was trying to buy. A helpful gentleman explained to me a process known as injection moulding. Simply put, powdered plastic was squirted into a giant press which had a ‘tool’ – a custom-made chunk of metal that moulded the plastic into the shape of the product you wanted. In goes the powdered plastic pellets – with extreme heat they turn into molten plastic – and out pops the finished part.

I was on to something here. That week, I ignored the rest of the business and went round visiting toolmakers with a sample of a vacuum-formed cover, to show them what I wanted made. The prices for the tooling ranged from £3,500–5,000, a fortune for me, but one company down in Surrey, called Arrowcraft, quoted me £2,800.

I engaged these people to make the tool. In those days, the process was slow. The tool had to be drawn up by specialist draftsmen and then hand-made by skilled craftsmen. The tooling time was going to be twenty-two weeks. Nowadays, the automated tooling process – from drawing to finished product – can sometimes be done in four weeks.

Big lesson coming up here, folks. Unfortunately, I had picked the Del Boy of the tool-making industry. I’d never heard so many excuses for delays in all my life. The twenty-two weeks went by and they were still drilling the steel.

I was kicking up merry hell. To fund this £2,800, I’d committed the cardinal sin of buying goods from one of my suppliers and flipping them for a very small margin in order to generate cash flow to pay the toolmaker. With vendors of other stuff funding my cash flow, I was obviously incurring liabilities. My accountant told me that the way I was operating, as Alan Sugar trading as A M S Trading Company, had many personal risks attached to it. He suggested it was time I formed a limited company.

I virtually lived at that tool-maker’s until finally they got the thing made. The tool was then taken to Morning Plastics in Chertsey, a very well-organised company, not like the bunch of monkeys at Arrowcraft. Here was the coup: the dust cover would pop off the moulding machine at 3s 6d each! Remember, up till then the lowest price anyone could buy vacuum-formed covers was 18s each.

Knowing my competitors were paying vacuum-formers 18s per cover, my masterstroke was not to treat these things as one of my normal products and just apply a reasonable margin. I decided that even if they did cost 3s 6d, I would sell them for 16s. The vacuum-formers scratched their heads because 16s was the cost price of the raw material they were buying from ICI.

That was it – the start of the big time for me. Within weeks of starting production, I was making £6,000 per month, at a profit margin of over 400 per cent per cover! I was selling thousands of plinths and covers to big companies such as G. W. Smith and Laskys.

Laskys, who begrudged anyone making a profit, reluctantly bought the covers off me. They wouldn’t believe this small-time-Charlie, who had hustled them over the past couple of years, was making the covers himself. They wanted to find my supplier. They managed to do so, but hit a brick wall – Morning Plastics could not supply anyone other than me with lids because the tool belonged to me.

Laskys were plutzing. They were in a dilemma – should they buy plinths and covers from me at a lower price, or not buy from me out of sheer belligerence and pay more to someone else? Even they weren’t that stupid. It’s interesting to note that the tables had turned and I had now become a supplier instead of a customer.