Richard Branson

  b. 1950 | English entrepreneur

At The Bottom

— 1971

In spite of his apparent success, however, Branson was losing money and found himself in debt.

Richard Branson, an ambitious, 21-year-old entrepreneur, sat in a London jail cell, humiliated and filled with remorse.  Branson, founder and publisher of a student magazine known simply as Student, had recently decided to branch out into music sales when he realized that he could undercut record stores by offering discounted music through the mail.  Calling the business Virgin Mail Order Records, Branson and his business partner, Nik Powell, were soon overwhelmed with orders.  Before long, the pair opened a shop of their own, and Branson even began looking for a house to convert into a music studio.  In spite of his apparent success, however, Branson was losing money and found himself in debt.  At this point, he hatched an ill-advised — and illegal — scheme to sell records that he told authorities were being shipped to Belgium.  Because the records were supposedly for export, he did not have to pay the sales tax; when he sold them to English customers, he was thus able to extend his profit margin by a sizable amount.  After Branson had sold several large batches of records this way, customs officials detected his debt-relief scheme, and he was arrested.  He was spared a prison sentence by accepting a large fine, which his parents paid by taking out a second mortgage on their home.