The Herald Plymouth Family Business Guide January 2015

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Complete our family business survey: www.francisclark.co.uk/family-business-survey

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The Herald, Wednesday January 14 2015

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Introduction Family Business Guide 2015

Francis Clark’s Family Business Advisors. Left to right: Tim Culverhouse, Giles Hutchings, Stuart Budgen, Jemima Fox, Stuart Cowen, Martin Atkins and Gordon Fox

Commitment, trust, support

By Francis Clark, sponsors of the Family Business Guide 2015

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HAT sets family businesses apart from non-family enterprises? Ownership is the most obvious answer but each can be very different in the way they are structured, in the products and services they sell and the way they operate. However, after Francis Clark conducted another set of interviews with family businesses located in and around Plymouth, it is clear that any differences between them are eclipsed by the traditional family values they have in common – commitment, trust, mutual support and customer service. They also have a longer term view of investment and offer more stability and confidence for customers and employees. Our case studies included partnerships, limited companies and a franchised operation with some relatively new enterprises and some celebrating 25 years or more in business. We spoke with businesses that are expanding rapidly and those that need to employ new staff. We heard how business owners had spells of not taking salaries in

order to pay and keep their staff when times got tough, and we discussed how some family businesses had recognised and dealt with succession plans and inter-generational difficulties while others were just coming to terms with the challenges these pose. The core values that drive these family enterprises were consistently evident with similar phrases being employed to express their organisational ethos and approach to business life – “treat customers the way you would want to be treated�; “it’s not just about profit and loss�; “it doesn’t always finish when you go home�; “go the extra mile� and “we have a conscience, it’s about doing the right thing�, were all common themes. It is values such as these that help to make family businesses more resilient in tougher times and more prepared to ride out the storm of recession. The South West probably has a greater concentration of family-owned businesses than many other parts of the UK so we need to nurture and cherish them.

However, despite the huge part that family businesses play in the UK economy, it is alarming to find that so few of them are passed on through the generations. Figures from a 2009 survey reveal that only 30 per cent of family businesses survived to the second generation and 10 per cent into a third. The average life expectancy of a family business is only 24 years. So what makes a successful and enduring family business? The list is pretty long – a clear strategy and vision; market knowledge; effective sales and marketing; organised around systems not people; understanding recruitment and motivation. Not to mention high staff loyalty and low staff turnover; planned finances; effective management structure and defined job roles; succession planning and forward planning across generations; separate management and ownership. Some of these characteristics are, of course, applicable to non-family enterprises but some are not.

Family and business are two very different and often conflicting forms of organisation. Long term planning is important for family tensions and conflicts to be minimised, including inevitable inter-generational differences, and to ensure successful succession and exit strategies are in place. These conflicts between the family and the business arise because there are effectively two different systems. On the one hand the family is a socialistic system with emotion, relationships and love, whereas the business is a more capitalistic system which is rational and in many cases, money focussed. At Francis Clark, we have long recognised the value of family businesses and we act for many across the region supporting them in a variety of ways over and above the provision of accounts, audit and award-winning tax advice. This includes recognising and dealing with the dynamics of a family business which introduces a whole new level of complexity not experienced by non-family enterprises.

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The Herald, Wednesday January 14 2015

Introduction Celebrating the bedrock of the city’s businesses

By William Telford Business Editor

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LYMOUTH’S family-run firms are the backbone of the city’s economy – and The Herald’s Business pages too. Our packed weekly business section wouldn’t be as varied if it wasn’t for the dozens of family firms we’ve been able to feature. The following pages in this Family Business Guide contain details of many of Plymouth’s top companies, and each family controlled. From household names such as Michael Spiers and Walter C Parson, to manufacturers such as Applied Automation and Pepper Communications, through to smaller operations such as Mian Landscaping and Carbon Funding, family firms are the bedrock of business. In this, The Herald’s second Family Business Guide, brought to you in conjunction with accountancy firm Francis Clark, we feature 18 of the city’s leading family businesses. But beyond this, there are many more. We have aimed to feature a different selection of companies from those in our inaugural guide. So let’s not forget those firms are still operating successfully, just over a year on. The list includes Harrisons Builders, Tony Glynn Scaffolding, LTC Group87 Ltd, Beacon South West, Drakes, Wray & Co, Lawsons, Larry Speare, Fairway Furniture, Pipex Px, Morris Engineering, Bandvulc Group, DT Plastics, Allspars, Securi-Guard, VH Graddon, Plants Galore, Langdon Court, Moorland Garden Hotel, Boringdon Manor Garage, Roger Young, Peter Goord Travel, Hackworthy and Sons, Friary Mill and Gribble’s Butchers. That’s some list. But even that doesn’t cover all the family firms The Herald has featured since launching our comprehensive weekly Business section, nearly two years ago. In the very first edition we featured Stonehouse’s oriental food wholesaler KW Brothers Ltd, and since then barely a week has passed without a family-controlled enterprise, of some form or other, appearing in our Business pages. The list includes the mighty – such as Chris Dawson’s The Range retail empire – to the minnows. And family businesses cover a range of relationships. There are firms which have passed down the generations to start-ups featuring siblings or husband-and-wife teams. In the following pages you’ll find a variety. Companies where the business has already passed to a new generation, such as at Michael Spiers or Walter C Parson. Or where, like at Applied Automation or Karris Ltd, a youngster is just entering the business, ready to one day step up. There are husband-and-wife enterprises, such as at Argus Express, Silverfish or Carbon Funding.

By Paul Burton Editor, The Herald

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Some of the family businesses featured in last year’s guide

A family affair Father and son teams, such as Kernock Park Plants, Ridgeway Tyre Centre or Mian Landscaping, are popular too. And as for siblings, how about the four brothers taking Pepper Communications into a second generation? Or the four sisters at Siblinc? There are businesses, Certini Bicycle Company for instance, with two families involved. Others, such as Gilletts of Callington or the Hajiyianni hospitality empire, which have multiple

family members working together. And every sector imaginable can have a family firm, from services to retail to manufacturers. Look at Plymouth’s restaurants, for example. In addition to the huge number of top-notch outlets run by the Hajiyianni clan, there are other family controlled diners such as Sprouts, Rock Salt, The Chancel, Samphire Brasserie, Real Food Kitchen, and Zuzimo. Not forgetting Plymouth’s two most famous sibling chefs: the Tanner brothers’ Barbican Kitchen.

Other leading Plymouth family firms include Independent Utilities, Wants, TPS Group, Dartmoor Zoological Park, The Cabinet Supplies, Langage Farm, The Original Pasty House, Ivor Dewdney, and Underhill Engineering. With Barclays Bank predicting Britain’s family-owned first-generation family companies are growing sales at a rate of 22 per cent a year, it seems likely we’ll be writing about Plymouth’s family firms throughout 2015, 2016 and for many years to come.

ELCOME to the second Herald Family Business Guide – our in-depth look at Plymouth’s leading family businesses. The Herald is delighted to be highlighting the city’s family firms again, with the support and assistance of our friends at Francis Clark, because such enterprises are the bedrock of Plymouth’s economy and vital for its success. In Plymouth, as throughout the UK, family-run firms provide jobs, create wealth and help build communities. Where would we be without them? The Institute for Family Business, and Oxford Economics, last month revealed research showing the UK has three million family businesses, providing 9.4million jobs, generating 25 per cent of the nation’s GDP and paying £102billion in tax annually. Britain has gained an extra 30,000 family businesses since 2010, and employment by such ventures is up by 500,000 since 2010. Family businesses now employ 39 per cent of all private sector workers. The Gross Value Added (GVA) of family firms has also increased since 2010 – by £3billion to £360billion, a quarter of UK GDP. And while most are small, more than 15,000 family firms are classed as medium and large companies. More than one in 10 large companies and nearly half all medium-sized businesses are family controlled. Family run businesses make up more than 60 per cent of private sector firms. They make an estimated £1.1trillion annually, 32 per cent of all private sector turnover. More than 15 per cent of Government revenue – £102billion – was generated by the family business sector. Some of the UK’s most famous firms are family-run affairs: JCB, Warburtons, Associated British Foods, Bestway and Dyson. In Plymouth we have fine examples of successful firms under family control, and in the following pages you will read about the likes of Michael Spiers, Vospers, Walter C Parson, Applied Automation and Pepper Communications. But for many, the image of a family firm is a more intimate operation. The Government estimates 62 per cent of the country’s 1.23million SMEs are family run. Plymouth’s Federation of Small Business has about 1,100 members. Many are family run. You will find compact businesses such as Kernock Park Plants, Certini Bicycle Company and Carbon Funding in this guide. So, it is crucial we support family firms, large or small, so they can continue to grow, prosper, bring jobs and wealth.

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

The firm that shows family, like diamonds, are forever

Adam Spiers, Keith White and Michael Cox

Michael Spiers

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FAMILY business which began by selling trinkets to tourists in South West seaside towns is now a serious player in the luxury jewellery and watch business. The Michael Spiers group was founded in 1956, spreading from Looe to Polperro, Newquay and Paignton. It opened in Plymouth in

1969, giving it a more stable, year-round market. The business rose to the challenge of long-established local rivals such as Bowden and Sons and Richard Wigfull, eventually taking over both companies. It now has branches in Plymouth, Truro, Exeter and Taunton, with a workshop in Plymouth and

satellite services at Hatton Garden in London. In 2011, the company invested almost ÂŁ1 million in refitting and stocking its Plymouth and Truro showrooms, putting them on a par with many fine jewellers in London. The directors took over the lease of the former clothing shop, Louis Bernard, next door to its Cornwall Street branch and converted it into a high-end watch gallery, selling luxury brands such as Rolex, OMEGA, Tudor, Breitling, Gucci,

Mont Blanc and TAG Heuer. Founder Michael Spiers died in 1999, but the business has remained safe in family hands, now being run by his brother-in-law Keith White, Michael’s son Adam, Adam’s uncle Stephen Spiers and the company’s long-serving diamond and gem expert Michael Cox. In the years following the advent of the package holiday, the business evolved away from seaside souvenir hunters to well-to-do West Coun-

try residents seeking a touch of class and a reward for their own efforts. Investing in beautiful jewellery and quality timepieces is a philosophy which has increased among consumers faced with years of rock-bottom interest rates. Adam Spiers explained: “The return on this investment is the pleasure and delight of ownership and when giving jewellery, the smile and joy on the recipient’s face.â€? Across its four stores, Michael Spiers currently employs 51 people, including three goldsmiths and a watch technician. Many of them have been with the company since they left school and staff turnover is virtually zero. The Michael Spiers specialists can not only model and set jewellery, but also strip down a timepiece for a service, polish and restore to almost new. The company’s diamonds and gemstones are sourced direct from the Far East sellers’ market and from industry trading base the Diamond Bourse. Mr Spiers added: “We sell diamond rings from ÂŁ600 to over ÂŁ100,000; because we manufacture ourselves and don’t pay middle men, we can keep control of both costs and quality.â€? Michael Cox was elected to the World Federation of Diamond Bourses in 2007, a great accolade, and as such is involved in setting industry standards. The business was not immune to the recession, which, when it hit in 2008, brought an end to the double digit year-on-year growth that Michael Spiers had experienced for more than a decade. Adam Spiers said: “We dipped in 2008-9 for the first time in many years, but have experienced sales growth every year since then. “I was brought up in this business from birth, although I qualified as a Chartered Accountant with Deloittes. “As a family business we are often recommended within families - it is very satisfying to be selling engagement rings to the children of my father’s original customers.â€?

Carbon Funding: Going greener and greater by the day

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PLYMOUTH business helping to make British homes greener is planning to double its ÂŁ4million turnover in 2015. Husband and wife Malin and Unis Lobb founded Carbon Funding Ltd as recently as August 2012. But already they have nine employees and have just moved to new, larger premises at The Chapel in Millbridge. The couple, both from Dartmouth, have been together for nine years and married for four. Malin, aged 29, is a trained carpenter turned property developer who previously ran his own con-

struction company. Unis, aged 31, was previously an energy assessor. They heard about the Government’s Green Deal scheme via the internet and now act as middle men to help householders all over the country access Government funding. Green Deal allows householders to improve their property’s energy efficiency, the cost of the work being recouped via their energy bills. The debt is attached to the property rather than the owner. ECO funding sees improvements such as loft or cavity wall insulation paid for by a non-repayable

grant. Carbon Funding Ltd organises assessments, obtains recommendations, engages accredited sub-contractors to do the work and sorts out the funding. Malin said: “We deal with our customers from start to finish. ECO funding is here till 2017, and Green Deal is here to stay. “It all stems from the Kyoto Agreement on carbon reduction which is set to run to 2050. Our turnover this year was ÂŁ4 million and we want to double that next year. “We are a growing company which has taken on more staff and recently moved to bigger premises.

We are finalising arrangements to be able to offer interest-free finance on solar panels and boiler replacement to help people make their homes more efficient. “We are very energy-conscious and have procedures to limit our environmental impact: we do recycling on site and are planning to install solar panels.� Malin added that he and his wife had different roles within the company and sometimes saw little of each other during the working day, but said they enjoyed working together. “Being business partners as well as husband and wife works well for us,� he said.

Husband and wife Malin and Unis Lobb

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

The dynasty that started with a cafe The Hajiyianni family

Silverfish

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HE family which owns Plymouth’s largest independently-run hotel is part of a dynasty which continues to control some of the city’s best known restaurants. The Hajiyianni clan last year celebrated 30 years of ownership of the New Continental Hotel, in Millbay Road. The building was built in 1865 but bought by Steve and Persefoni Hajiyianni in 1984. The couple, Cypriots who came to Plymouth in 1953, started a city business dynasty which continues two generations down the line. Steve died in 1996, but he was survived by his wife, and their children Mario, Bobbie, Chris, Tina and Alexandra. Another son, Costas, was general manager at the hotel, but sadly died in 2006. Mario’s daughter Yasmin is in charge of sales and marketing at the New Continental, ensuring family involvement moves into its third generation. And those family members, working together under the New Continental Group moniker, have become involved with other businesses throughout the city too. “When Steve died the rest of the family carried on and expanded into a larger portfolio,â€? said Yasmin. Today the family has control of the well-known Mission and Morgans restaurants, and last year added the newly-opened The Dock, at Millbay’s King Point Marina. They also run Strathmore House Apartments, on Elliot Street, The Hoe, a block containing 18 serviced units. And they have an interest in Cafe Curva, in Drake Circus Shopping Centre, along with members of the extended family. Yet this all started with one cafe. Steve moved to the UK in 1947, bringing his wife over five years later, and they came to Plymouth to open a cafe in King Street, with Steve’s brother Andrew. Then they started a successful steak and omelette restaurant in 1966, selling it in 1981. But the family said acquiring the Grade II-listed New Continental, at that time known simply as the Continental Hotel, was Steve’s greatest moment. “It was his pride and joy,â€? Chris said. Steve paid ÂŁ300,000 for the hotel, and ploughed another

Bike firm are in gear for growth

Rear: Mario Hajiyianni, Alexandra Hajiyianni, Bobbie Hajiyianni, Christopher Hajiyianni. Front: Tina Hajiyianni and Persefoni Hajiyianni. In the picture: frame Steve Hajiyianni. The family are pictured at the New Continental Hotel

ÂŁ1.25million into refurbishing the Victorian building. He changed the name of the landmark building, with its distinctive turret, when he reopened it in May 1985. At that time Plymouth was not as well served with hotels, and with the dockyard busy and plenty of corporate work and weddings about, the business thrived. More cash was pumped in, including a ÂŁ3million, two-year, refurbishment starting in 2008, the year the hotel was chosen to host auditions for the Hollywood version of Alice in Wonderland, starring Johnny Depp. Today, the New Continental hotel employs about 60 staff and has a total of 99 rooms with four conference/function rooms that can cater for up to 350 delegates. It also has an in-house restaurant

called Steve’s Brasserie, a leisure club, with gym and swimming pool. Famous guests have included top snooker stars, such as Alex Higgins, Jimmy White, Steve Davis and Ronnie O’Sullivan, who competed at the next-door Pavilions. Actors such as Martin Shaw, comic John Bishop, boxers Nigel Benn and Frank Bruno, and even the Monkees have stayed the night. “Last year was really busy, the busiest for a few years at the hotel,� said Yasmin. “And The Dock has taken off really well.� Meanwhile, members of the extended Hajiyianni family are involved in other well-known Plymouth businesses including the Grecian Taverna, the Barbican Pasta Bar, Dartmoor Diner and the Blues Bar and Grill.

EAR-on-year growth of 30 per cent tells its own story for Cornish bike distributor Silverfish and, with more expansion on the cards for 2015, the future of this Saltash-based company is looking bright. Owned and managed by the husband-and-wife team of Darren and Sarah Mabbott, Silverfish was founded in Plymouth in 1999 and now imports and distributes five different bike brands as well as a huge range of bike parts and accessories. The company enjoyed early growth in an increasingly popular leisure sector but even this rapid early growth has now been eclipsed by its 2014 performance. Turnover has soared to ÂŁ7.6million with an all-time record sales figure of ÂŁ1.29million in October alone, with individual brand sales increasing by as much as 73 per cent year-on-year, and the business scooping Distributor of the Year Award honours in the influential trade publication, BikeBiz. Success has undoubtedly been helped by cycling’s popularity, being on an upward trajectory for many years, and, to a degree, by our kinder weather patterns tempting more people into the saddle. But these factors alone cannot entirely explain Silverfish’s impressive growth. As the industry has grown, so has the amount of competition. A very steep learning curve resulting in a robust management structure, efficient logistic procedures for warehousing, picking and distributing, strong brand recognition and a supportive staff have all played a significant role in moving the company forward according to managing director Darren Mabbott. Darren said: “In the early days when we had six or so people, everybody did everything so you always made yourself available and worked together to get things done. “As we grew though, we quickly realised that this was no longer the best way to work. “We needed to rationalise jobs and impose a more rigorous management structure. “At times this was tough, especially when redefining what a long-serving member of staff had to do, so managing relationships was an important part of our organisational change. “I like to think we look after our people. We run an open-door policy

Husband and wife Darren and Sarah Mabbott

and we’re committed to staff development.� Silverfish now employs 34 staff including five full-time sales representatives, an in-house web and PR team and two full time brand managers reflecting the extreme competitiveness of the industry. Demonstration events and road tests throughout the UK are also organised by the Saltash team and they are proud to sponsor the Cardinham Trail Centre, in Cornwall, as this gives support to a popular local riding area. But it’s not all about marketing of course. Anticipating buying trends, knowing what stock to order and how much to store is another key area and one quickly learned in those early years in Plymouth.

‘I like to think we look after our people. We’re committed to staff development’ “Retail has changed,â€? said Darren Mabbott. “Dealers can’t stock everything and many want to buy ‘just in time’ whereas we have to order six-to-eight months in advance. “As a result we can, on occasion, have little credit coming in and massive credit going out and that is a challenge for any business.â€? Silverfish has maintained warehousing in Plymouth to this day, as well as having a storage facility in Bristol and a recently announced expansion of its Saltash headquarters to 20,000sq ft. But what of the future? 2015 will see an increase in the number of brands imported with more sales and warehouse staff being employed. After recent expansion into the German market, there are also now plans to address the Irish and the rest of mainland Europe markets with a turnover target of ÂŁ10million-plus.

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Legacy of excellence is living on

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ROBABLY the biggest fabric stock in the South West can be found at Dave Nicholls Upholstery, on Faraday Mill, in Plymouth. The highly experienced family team which owns and manages the business specialises in both commercial and contract upholstery for hotels, restaurants and bars, and domestic work including sofas, chairs, caravans, cars and even seating and sleeping areas on private yachts and vessels for other maritime customers. On the commercial side of the business, it can number Plymouth University, the National Marine Aquarium, Dame Hannah Rogers, Seale Hayne and the Holiday Inn as amongst its satisfied customers and its services are in demand with professional shop fitters. The partnership running the business comprises Chris and James Nicholls and Chris’ wife, Dawn, all in their early to mid-thirties. The brothers decided to carry on the business established by their late father, Dave, in 1991 and benefit from the strong reputation and immense goodwill he had built over the intervening years until his untimely death in April 2010.

James, Chris and Dawn Nicholls are shown in the main picture, while James and Chris are pictured with their late father Dave in 2008 above

‘Thanks to our father we know the business inside out’ Dawn Nicholls said: “Dave’s legacy has been a reputation for personal service and getting every job exactly right. “As a result, we enjoy some very long-standing and repeat customers on both the commercial and

residential side of the business with new orders coming from recommendation and referrals although we have established quite a social media presence. “The recession was difficult but we have benefited by more people deciding to restore or refurbish their furniture rather than buy new. “We haven’t stood still since Dave passed away. “We have established a bespoke, hand finished curtain service and increased our roll stock to such an extent we have had to reorganise our premises by moving the workshop upstairs to create a customer friendly fabric room which houses around 350 rolls.� Now in its third year at Faraday Mill, business is on the up with a waiting list of orders and the three partners are beginning to outgrow their 1,800sq ft outlet. Expansion and new recruits are on the horizon but the priority is consolidating the success they have enjoyed in recent years. Chris Nicholls said: “James and I were brought up in this business and thanks to our father we know it inside out. “We are determined to go the extra mile to ensure that every job is finished to the exacting standards we set ourselves so that we can protect the reputation of the business that bears his name. “It’s not all about profit and it’s not a nine-to-five environment. “We are all very committed and feel very rewarded when we get repeat orders – that tells us we are getting it right.�

DAVE NICHOLLS UPHOLSTERY Curtains & Fabrics

for all your upholstery needs Domestic & Commercial Made to Measure Curtain Service One of the largest fabric selections in the Southwest Roll stock available Based at Faraday Mill, Plymouth

Tel: 01752 600404 www.davenichollsupholstery.co.uk

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Dave Nicholls Upholstery

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

Helping companies ‘wow’ clients Karris Interiors Limited

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OUTH Brent-based Karris Limited is a leading commercial refurbishment company providing all elements of office refurbishment and fit-out work and the supply of commercial furniture from the UK’s principal manufacturers. Karris specialises in full fit-out services from light construction work to floor finishes, partitioning, ceilings, building services and everything in-between. Its team of sales consultants, designers, specifiers, project managers and trusted sub-contractors design and project manage the entire process in-house. There is more to it, however, than just workspace upgrades, according to managing director Perri De

Perri De Wan, managing director, and his son Daniel De Wan, an apprentice plumber with the company

complete commercial interior design refurbishment, ďŹ t-out & furniture

working with successful businesses delivering inspiring new workspaces www.karrisinteriors.co.uk 01364 73673

Wan. He said: “The importance of the right working environment in terms of employee well-being, productivity and brand has become more apparent to business owners in recent years. “Many organisations are looking to bring their office environments into the modern world with higher-quality finishes and carefully-considered schemes; we work alongside our clients to bring their brand gently into the workplace with subtle use of colours, finishes and textures along side the practical and functional requirements. “We look at the working environment as a whole, not just a series of components. By approaching a project in this way and listening to our clients’ needs the results can be amazing.â€? Perri and his wife Sally, who is company secretary, established the business in 2003 in the back room of their house before moving to a small office in Ermington and then to larger premises in Ivybridge which could accommodate larger deliveries. Karris’s recent move to South Brent, and a 4,000 sq ft facility incorporating a new furniture showroom, reflects the growth of the business, which has been impressive. Karris now directly employs 12 staff and has increased its turnover by nearly 250 per cent in just three years. The company is on target to reach ÂŁ4million turnover in three years with the current upsurge in business putting them firmly on the road to achieving it. Amongst others, clients have included Kitsons Solicitors, Invensys Controls, Plymouth Life Centre, Sutton Harbour Holdings plc, Stones Solicitors, Cigna Insurance and the award-winning Oxygen House occupied by the ATASS Group in Exeter. Perri De Wan added: “Karris is family-owned and the core values you would expect from a family business are evident in the way we work. “Our sons Daniel and Thomas, who are 20 and 17 respectively, are both working for the company as apprentices, Daniel as a plumber and Thomas as a joiner. “Our business journey has taught us to be wise with money. “When times were tough in the late 2000s we had to be cautious but managed to keep our employees during that period. “We are committed to our people and they reciprocate. We have also built strong relationships with preferred sub-contractors strengthening loyalty and as such the quality of our service.

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Perri de Wan, who owns Karris, Commercial Refurbishment and Business Environments, based in Lee Mill

‘Our sons are both working for us as apprentices’

“However, we don’t play the ‘family card’; while being approachable and understanding, we convey professionalism, experience and expertise. We want our clients to know that there may be options they haven’t considered and that intelligent, holistic design of a space can save money, improve morale and wow their client. Some are astounded with what can be achieved. “We can now showcase our capabilities at Darcey Court in South Brent and hope businesses will come along and see what can be achieved. “We want the business community to enjoy cutting-edge services that many think are only available in the South East but are actually available and prospering in the South West. “Karris is on a strong growth path and we are proud to say that word of mouth recommendation has become the leading source of new business, we believe this is driven by an understanding of our clients’ needs and the high standards we set ourselves.�

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Where quality rides with expertise Certini Bicycle Company

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‘If you want to be competitive in this market you have to match the quality of products with the knowledge and expertise of your staff’

staff. We have enjoyed good employee retention because we provide a good employment package, are staff are all bike enthusiasts and because I think employees respond to a family business environment. “Every day they see us as owner/managers and our children doing all the jobs around the store, so it becomes natural for everyone to get stuck in. “We haven’t begun to discuss succession plans but this is something we need to put on the agenda. “It was a big step to open a branch in Bristol but we found the right premises, which is key. “I wouldn’t rule out further expansion in the future but that would be entirely dependent on finding a property with all the right credentials.�

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Top: Tony Dare and Rob Carron. Middle: Lee Dare , David Carron, Charlie Carron, Tony and Rob. Bottom: Lee serving a customer

ASED just off the A38 on the Tamar View Industrial Estate, in Saltash, the Certini Bicycle Company’s showroom houses a spectacular display of up to 700 cycles of every description from mountain and road bikes to hybrids, power assisted, children’s, cyclocross, triathlon and stunt bikes. There is a ladies’ section, a separate showroom for the imported “specialised� brand, a workshop and a “body geometry� room complete with cameras to analyse and optimise riding positions. Alongside is a vast array of bike accessories, components, lights, clothing, helmets and shoes, bike racks and energy food with some highly knowledgeable staff to advise and guide. The business was established by partners Robert Carron and Tony Dare, who ran a successful cycle shop in London in the 1980s before starting to import bikes and accessories. The partners moved back into retail and relocated to Plymouth, opening the current store with 6,000sq ft of space which they later expanded, adding an additional 10,000sq ft. It employs 13 staff in Saltash and the same amount in recently-opened premises in Bristol which were acquired with the support of a grant from the Regional Growth Fund. Both Robert and Tony have children working in the business. Robert’s daughter Charlie and son David, and Tony’s sons Lee and Carl are all in the management team undertaking a variety of sales and customer-facing roles, as well as administrative tasks such as stock control, re-ordering and responding to email inquiries. Robert Carron said: “Our building was the main driver behind the move to Plymouth. “As the only independent specialist cycle retailer in the city, we need to hold a large amount of stock and we need parking. “Customers want to have a ride before they buy so we need a forecourt and you just don’t get premises of that type in city centres.� Fortunately, Certini’s reputation for quality products and services means that customers are prepared to travel from all over the South West and beyond. The internet is their shop window and word-of-mouth recommendation brings in a lot of trade. The partners are committed to a bespoke personal sales service but

also operate a mail order service nationally, and even locally, where it is required. Robert Carron added: “Cycling is perceived as a healthy way of life and it’s been on the way up for many years now. “As a result, the products have developed and become more sophisticated. “The quality of components and the technical equipment have improved immeasurably and it has become a sport that is accessible to all; from those who need a power-assisted bike to get them up hills, to those who are willing to pay as much as ÂŁ8,000 or more for an ultra-lightweight, carbon framed, competitive pro-bike. “If you want to be competitive in this market you have to match the quality of these products with the knowledge and expertise of your

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PAGE 10

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

173 years strong and still growing Walter C Parson

I

T WASN’T inevitable that John Ware would join his family’s firm of funeral directors. But when you’re seventh generation, the pull is hard to resist. John, aged 23, gained first class BSc (Hons) degree in business management at the University of Surrey and worked for two years in London before returning to his Plymouth roots to join Walter C Parson, a household name in the South West. He is now assistant to his father Stephen, the managing director, while his grandfather Graham is chairman of the company. Walter C Parson was established in 1842 at Stoke Climsland near Callington. It has, either by inheritance or acquisition, remained in the family over seven generations, and although now Plymouth-based, has grown to cover the South West. Entrepreneur Richard Walter Parson, a carpenter and joiner, set up the original firm,

offering affordable individual funerals as opposed to the en masse burial services which were normally the fate of the Victorian and Edwardian poor. His great grandson, Walter Cyril Parson, was the fourth generation to go into the family concern, having bought the firm from his father, Oscar Walter Parson, in 1932. His son Wally junior became a partner in 1976, and another of his four children, Pat Ware, became a partner in 1980. Her son Stephen Ware, who joined in 1982, is the current managing director, bringing the family connection into its sixth generation. He said: “We’re still a family business with good traditions, and when we started to expand we tried to put that tradition into all the people we employed.� His son John Ware said: “We all work well together and share a vision of expanding further. In 1999, we had four offices in

The three generations running Walter C Parson, left to right: Stephen Ware, John Ware and Graham May

Plymouth, but the death rate is declining, and we have countered that by expanding into a larger area. “We are currently developing our 10th office in the South West.� The company has done this by acquiring other family-run firms of funeral directors, which continue to operate under their original business names. John said: “They have excellent staff who are well-known in their local communities; we are going from strength to strength.� He said that company had introduced pre-paid funeral plans and was moving forward with technology to provide optional services such as “video reflections�. John added: “I’m 23 and the seventh generation. “It’s not a job for everybody, but I wasn’t pressured into joining the family business,

‘It’s not a job for everybody, but I wasn’t pressured into joining the family business’ and it works well for us. “Although I don’t have any children yet, I’d be very happy to think of the company passing on into future generations.�

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Brothers are peppered with success P

EPPER Communications is a marketing, print and direct mail solutions business located at Langage Science Park in Plympton. Its aim is to support marketing departments achieve their below the line marketing objectives advising them on strategy, production, the best route to market and cost. Its services include direct mail fulfilment, print management, data processing, digital and litho tailored print solutions, and bespoke design. The ambitious business has produced work for Disney, Harrods, Cadburys, BBC and the Forestry Commission, while locally it supports businesses and organisations

Pepper

such as Plymouth Theatre Royal, the Pavilions, St Luke’s Hospice, City College Plymouth and fast growing designer clothes retailer Seasalt for whom Pepper regularly produce circa 300,000 quality printed catalogues for mail order. Established in 1982 by Steven Whitford, Pepper Communications is now owned and managed by his four sons – 41 year-old Jude (managing director, joined 1995), Seth (aged 39, sales director, joined 1997), Jake (aged 37, production director, joined 2000) and Saul (aged 30, director of digital, joined 2010).

Brothers Jude, Seth, Saul and Jake Whitford

Jude Whitford said: “Succession was an issue our father recognised and tackled in good time. “We completely restructured the business in a tax-efficient way allowing mum and dad to retire comfortably but pass the shareholding on to the next generation. “All four brothers have marketing degrees but we were all very conscious that we had to prove ourselves to the employees, some of whom joined 30 years ago under the old YTS scheme. “There will always be a degree of resistance to change and we’ve had to earn respect. If you can’t do it yourself, you’ll soon get found out.� Clearly the brothers are doing a good job by anyone’s standards.

The business has enjoyed profitable growth year on year for at least four years and double-digit growth over the past three years, achieving an annual turnover of ÂŁ5.25million in 2014. It now employs about 35 full-time staff at its 28,000sq ft unit at Langage, with a pool of 20 part-timers available as required. Despite the challenges of operating a marketing communications business from the far South West, Pepper has resisted the temptation to reduce costs by having its printing done remotely, preferring to keep it in-house and use its own skilled and experienced people to control quality and maintain high standards. Jude Whitford said: “We have

further plans for growth but have to be prudent. “We need to constantly reinvest in new equipment but need to monitor technological advances carefully. “New printing presses for example can cost up to ÂŁ1million and that kind of investment needs a return. “It’s no good investing in a machine that soon becomes uncompetitive because new technology has overtaken it.â€? Pepper Communications has just acquired a new ÂŁ650,000 press supported by a 20 per cent grant from the Regional Growth Fund. As a family business not reliant on external shareholders, the board is able to take longer term strategic investment decisions but are careful to monitor trends and new developments and react accordingly. The digital age is bringing new opportunities for print and direct marketing. “One of our strengths,â€? said Jude, “is the ability to make quick decisions and to ensure they are implemented. “Our reputation depends on providing practical ‘data to doormat’ print solutions for marketing people who are often ideas rich but time poor. “The family is a bond and we work for each other. “This has helped us be resilient in hard times, withstand the challenges of recession, retain a committed and loyal workforce and create a firm platform to build on our ambitions.â€?

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PAGE 12

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Six of the best pieces of advice for

The team at Francis Clark dispense their invaluable advice for family businesses of any size What’s in a name? By Giles Hutchings

O

F THE case studies in this Family Business Guide some have the family name “above the door� and some have opted to develop a brand name. In the case of Silverfish Limited which imports quality bikes and accessories for wholesale, a huge amount goes into establishing the brand across a very wide geographical area. Here, brand recognition is more important than the family name. Similarly, the Gillett family owns 61 Spar stores across the region but its connection with its customer base is through the quality of the staff it employs and the produce it sells at local level. Few people relate their local Spar shop with the family that may well own it. On the other hand, the family name in the title of the business can be very powerful indeed, particularly where sales or services are delivered directly to customers. For instance, Dave Nicholls Upholstery, on Faraday Mill Business Park, is named after its founder who has since passed away, but the reputation he built, and the respect he commanded, has ensured his sons, who have taken on the business, benefit by retaining the well-established name. The same can be said of Roberts Flooring Contractors where the family name gives instant recognition in a specialist market place and ensures that staff loyalty is mirrored by strong customer longevity. It has been known for some family businesses to drop the family name when their products begin to have a global reach but this is not common. On the contrary, there are many businesses that have retained the family name without the market realising they are still family owned and run. Examples would be: construc-

tion business Laing O’Rourke (founder Ray O’Rourke remains its chief executive), JCB (named after its founder Joe Bamford), and Arnold Clark (named after the chairman and chief executive of the Arnold Clark Motor Group). Known to millions as the chocolate confection that helps you “work, rest and play�, it’s a mistake to think the Mars bar is named after the red planet. In fact, it is named after Frank C Mars who founded Mars Inc, now the third largest family-owned business in the US. For some local businesses such as Pepper Communications and Karris Office Interiors, the family name is not relevant externally and they don’t use it as part of the sales process. In other cases, brands are created to look like family names just to exploit the values that go with a family enterprise. This is often the case in mar-

‘The name can be important but it is values that matter’ keting food related products. However, it is clear that in most cases where the business retains the family name as the trading name, it can be a powerful asset. Third-party buyers often consider it valuable and retain the original name to trade on its reputation even though there might be no family members left working in it. The family name suggests a number of compelling qualities in a business – trust, stability, reliability and values. Customers are impressed when they meet the people behind the name and staff respond to the commitment it portrays. Second, third or fourth generations may have changed the business structure and found new ways of working but they will rarely change the name. That type of major rebranding requires quite an investment and runs the risk of customers breaking the connection they have with

Left to right: Family business advisors Tim Culverhouse, Giles Hutchings, Stuart Budgen, Jemima Fox, Stuart Cowen, Martin Atkins and Gordon Fox

you. There may be a critical mass in the development of a business where the family name is subsumed by the brand and becomes irrelevant as in Ford or McDonalds. A solid family brand name, however, can assist in the sale of the business if succession has been discounted and new buyers will be faced with the dilemma of rebranding and risking years of goodwill and brand recognition or retaining the marketing benefits of an established reputation. If you were to buy Dyson or JCB, it’s pretty unlikely you’d want to change the name. Children in business will work hard to protect the family name. The majority want to keep it both for sound business reasons and out of respect for the earlier generation that established it in the first place. The name can be important but it is the values that really matter. By all means look to the past but concentrate on the future business needs and always be careful what you say – remember the Ratner effect! giles.hutchings@francisclark.co.uk

Managing family wealth Jemima Fox

N

EW Year is often a time for reflection and contemplation of the year ahead. It is a perfect time for making sure that the preservation of family wealth is not being neglected and that all steps are being taken to protect family assets for yourself and for future generations. The number of estates exposed to 40 per cent inheritance tax is predicted to almost double by 2018-19. Tax uncertainty combined with care home fee concerns and succession wishes can pull us in different directions, making it vital to have a clear understanding of your values and goals. Future plans need to be understood by you and your family. The protection of family wealth

does not lie with one generation and an active role may be needed by members of each generation. This is of particular importance where there is a family business, for which early planning is paramount. The identification of a successor and the lifetime handing over of a business can be difficult. Often there is a need to ensure you have enough accessible wealth to secure your future financial stability, without placing hardship on the incoming generation, there are tax efficient ways of achieving this. Advisors need to ask, and be asked, the right questions and the answers need to be reviewed regularly. There is no one-size-fits-all solution but it is important to remember the small ways that your family’s inheritance tax burden can be reduced. For example, gifts of up to ÂŁ3,000 annually are exempt from inheritance tax and can immediately save the family ÂŁ1,200; this allowance can only be carried forward one year. In addition to this, ÂŁ250 worth of small gifts can be made each year; no carry forward is available although it is likely to have been used up by Christmas! The more valuable “gifts out of incomeâ€? exemption for inheritance tax deserves a review of taxable income levels to establish any scope to benefit, potentially protecting 40 per cent for future generations immediately. Other lifetime gifts can trigger immediate tax liabilities and result in a loss of control. A trust can often be an effective succession vehicle and you should speak to your advisor to ensure your options are known and understood, especially in light of recent changes to the inheritance tax treatment of trusts. For philanthropists, the management of family wealth can incorporate gift aid, providing income tax relief during lifetime and a 36 per cent reduced rate of inheritance tax, where 10 per cent of the net estate is left to charity. This can result in both the charity and the beneficiaries being better off. Advice should be sought to make sure all reliefs are being claimed and that your will is up-to-date and written to achieve this. The efficient management and succession of family wealth requires a combination of tax planning, estate and gift planning, investment and risk management and business succession. It’s important and requires careful thought and joined up timely advice. It should be one of your New Year’s resolutions. jemima.fox@francisclark.co.uk

The Herald, Wednesday January 14 2015

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PAGE 13

Francis Clark

a family business trying to succeed

Should I stay or should I go? Tim Culverhouse

I

N MANY family businesses it’s not uncommon to find parents involving their children from an early stage. It can be an excellent way to earn some pocket money and to get them used to the world of work in a safe, known environment. As they progress and develop they can often find themselves being a part of the business and perhaps taking on more responsibility and tasks as they begin to find their role in the organisation. However, whilst this natural and somewhat organic growth of the individual can be good, are family businesses missing a trick by not encouraging their children to leave? Working for your family is very different to working for someone else. You operate within a different system where decisions are often based on love, birth right and relationships as opposed to competence, merit and rationale. This can, on occasion, give the individual a false view on how businesses operate, how to succeed and their abilities. Coupled with this we normally see the “parent-child” interaction continue from home to the work place. There are businesses that want their children to be involved but are prepared to take a longer term view. They see the value in encouraging them to go and work elsewhere to learn how a business works. You could view this as sending them on a reconnaissance mission to find out how others do things, what they do well and importantly to learn lessons about how to be part of a business which you don’t own. Those who do this efficiently can then bring back life lessons, different systems and alternative practices that work well and can return to the family business often years later to add genuine value. However, whilst this looks like a sound way of developing the people in the business it can cause some issues. Firstly, the encouragement to leave and see the wider world may result in the succession plan for the business failing. This can be disappointing but as our previous articles over the last few months have demonstrated

communication could have been the key to prevent this. Did the children know what you had planned for them and, was it your plan or a joint plan? Secondly, a son or daughter will hopefully be returning at a managerial or senior level and can often come in leapfrogging those non family members who have been working hard in the organisation to progress on merit alone. This can lead to bitterness and some resentment amongst the workforce and can take the individual a long time to bed back in. They have to demonstrate to the staff that they have earned their place based on skills and not on surname. Having seen both methods tried and tested I remain of the view that some experience away from the family business is invaluable both to the individual but also to the business in the long term. How long away though is a difficult question. My advice? It’s about the length of a piece of string. tim.culverhouse@francisclark.co.uk

Disputes and conflict resolution Stuart Cowen

D

ISPUTES in any business take their toll: customers can get caught in the crossfire and employees are remarkably adept at spotting the symptoms. Sales, profits and cash flow may suffer. Combine this with potentially complex inter-family relationships and the effects are often worse. Tensions arise between generations, in-laws and siblings and many an old niggle is dredged up from memories, creating a potent mix of emotion, loyalties and money. The old adage applies: “When money goes out the door, love flies out the window”. Quite apart from any financial effects, the impact on family members can be very stressful, and the mental pressures of daily work and home place strife are not to be underestimated. So how can we prevent family businesses getting to this stage? And how can we help if they are already there? In terms of prevention, my colleagues have described elsewhere in this supplement how helpful it can be to get clarity of rights, roles and responsibilities as early as pos-

sible in the family business; and importantly, to ensure these are updated as the business or family arrangements change. If attempts to prevent breakdown have not been successful and the family is “not getting on”, then the result will probably be an increasingly tense series of exchanges. Many families will still be capable of working out solutions through internal dialogue. However, it is not uncommon that they will need to seek outside help from time to time, especially if the same arguments keep going round in circles to no-one’s satisfaction. A trusted adviser from outside the business may well be able to help resolve the problem, but sometimes they are seen as being on a particular person’s – or generation’s – side. In that instance I recommend finding someone trained and experienced in mediation, who has been “seen in action” and comes recommended. The parties do not necessarily need to love each other after the mediation, but they will have had the chance to express their views and to appreciate the other side’s positions. At times the mediator may challenge and “reality check” one side’s version but it is vital to understand the mediator is not a judge, and this is the fundamental difference between mediation and legal proceedings. The latter may impose a solution that really suits neither party well and leaves dissatisfaction ingrained; whilst with mediation there is only a solution when all parties agree. The outside influence and impartiality that a mediator can bring to bear, however, should not be underestimated. stuart.cowen@francisclark.co.uk

Retaining pensions wealth Stuart Budgen

T

HE latest changes to the Taxation of Pensions Bill firmly position flexible pensions as the estate planning vehicle of choice. Tax relief on contributions without the seven year wait for them to be outside the estate and tax free investment returns were already good reasons to recommend pension funding for clients and their families. Combine these with the new rules where a flexible pension,

such as a SIPP, allows pension wealth to cascade down the generations within the pension wrapper and it creates a truly tax-efficient wealth management and inheritance plan with few peers. Retaining wealth within the pension fund and passing it down to future generations is an extremely tax efficient estate planning solution. It combines IHT free inheritance with tax-free investment returns and, potentially for some beneficiaries, tax-free withdrawals. The ability to pass on and on pension wealth doesn't stop there. The nominated beneficiary can nominate their own successor who will take over the fund following their death – unlike the current rules. This will allow accumulated pension wealth to cascade down the generations, whilst continuing to enjoy the tax freedoms that the pension wrapper will provide. On death before 75, it’s worth considering skipping a generation with at least some of the pot to ensure a tax-free inheritance for the kids. With a 94 per cent* chance that at least one of a 65-year-old couple will live to at least 80, routing all the wealth via the surviving spouse means it’s likely any subsequent inheritance to the kids will be taxable. The new death benefit rules have changed the dynamics for those looking to pass on any remaining pension fund on death. This means revisiting existing death benefit nominations to ensure they continue to meet an individual’s needs and objectives. A nomination doesn’t have to be all or nothing. It’s possible to nominate a number of different beneficiaries and to perhaps skip a generation with some of the fund. It’s also worth remembering that each time a pension fund is inherited it’s the new owner that has control over the eventual destination of those funds. Not only can they nominate who benefits on their death but, under the new flexibility, they could withdraw the whole fund themselves leaving nothing left to pass on. This may be an issue where there are children from previous marriages or concerns about a beneficiary’s ability to manage their own financial affairs, either through a lack of capacity or their own reckless spending habits. Where control is an issue, a potential solution is to pay a lump sum death benefit into a Trust which will put the control into the hands of the member’s chosen trustees. The trustees can determine when and how much to distribute to beneficiaries. stuart.budgen@francisclark.co.uk

Survey will help next generation Martin Atkins

W

E HAVE now supported two Family Business Guides in The Herald involving case studies of family-owned and managed businesses located in the Plymouth region. These supplements demonstrate the success of our local family businesses, their different structures and relationships and the challenges they face both on a day-to-day basis and in the longer term. As a firm specialising in this hugely important sector with a considerable body of knowledge accumulated over very many years, we decided to further enhance what we know about family businesses by asking them directly to respond to a completely new and comprehensive online family business survey. More than 65 per cent of UK businesses are family run. They employ more than 9million people, accounting for 40 per cent of all private sector jobs – but are they being sufficiently supported? Do all family businesses recognise the challenges that are specific to them such as succession planning, business structure, remuneration and incentives? Have they thought about establishing systems and procedures to ensure continuity and do they know where to go to get the right advice and support? By analysing the responses to our survey we will not only add to the existing body of knowledge but we will be able to provide evidence-based solutions to the many challenges that are specific to this type of business. The findings of this survey could be immensely useful for family businesses and their futures. We will be publishing a hard copy report which will be made available to respondents. The survey can be accessed by visiting www.francisclark.co.uk/family-business-survey. For every completed questionnaire there is a chance to win a £250 gift voucher for luxury Devon resort Bovey Castle. The results are expected to be published in March. Personal information provided for this purpose will not be linked to answers. All answers will be anonymous and contact data supplied will not be shared with any third parties. martin.atkins@francisclark.co.uk

Complete our family business survey: www.francisclark.co.uk/family-business-survey

PAGE 14

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

Friendly, professional, impartial

BIG NAME TYRES AT SENSIBLE PRICES Call Ridgeway Tyre Centre: 01752 342505 Ivybridge Tyres 01752 895057

Phil Landricombe and son Alan

Ridgeway Tyre Centre

Snow or rain - it makes no odds! Switch right now to get top wet - weather performance throughout winter.

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IG name tyres at sensible prices, is how Lydia Landricombe sums up what you can expect at Ridgeway and Ivybridge Tyres Centres, a family owned business that wears its family credentials on its sleeve. “Our way of working,� she said, “is to treat people the way you want to be treated. “Everyone is an individual and all are treated with the greatest respect. “Customers like the fact that we are a family business and each is addressed formally as ‘sir’ or ‘madam’ at all times. “They also like our great staff continuity – one of our employees started with us in the 1990s on the old YTS scheme and he’s still here!� The close family ties that drive the business derive from 1986 when Phil Landricombe used his redundancy money from Asda to start the business with Phil’s brother-in-law Mervyn Jones in a small unit on the Ridgeway in Plympton. It was a hard start. Phil founded the business on great customer service at the right price with no job too small. Wanting to ensure that his sons, Alan and Jamie, had a sense of what it meant to earn money, they started in the business early and had to learn every task so that later they had all the skills necessary to run the business. Alan now runs the Plympton operation, which has grown from its original single

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unit to the whole Mews, and Jamie heads up the Ivybridge Centre which started in 1992. Phil is back on the shop floor and looking to retire so structuring succession is under way. The approved Goodyear and Dunlop dealer employs 13 staff and, in addition to tyres, it provides wheel alignment and balancing and carries a large stock of replacement batteries and exhausts. It also offers on-line ordering, a mobile fitting service and an agricultural breakdown service. Lydia, who is Alan’s wife, does the bookkeeping and accounts. She said: “We all feel very much part of the community so it’s fundamental to offer friendly, professional and impartial advice so that the products you buy suit your vehicle, your mileage and your wallet. “We don’t do a lot of advertising but the quality of our service ensures that word-of-mouth recommendation gets us customers who stay loyal. “Few people realise how volatile the tyre marketplace is. “If the price of oil goes up, so does the cost of tyres and that’s not easy to pass on to customers. “It’s not an easy business with long hours and low margins. “We are open seven days a week and it doesn’t all finish when you go home but as a family you do what is right and you do what is necessary to keep the business going.�

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Where staff are people, not numbers Argus Express

vehicle insurance is a major overhead which Simon and Kate are looking to reduce. They inherited high premiums because of a lack of care and a history of accidents under the previous owners and, as a new business they are still building the track record to argue the premiums down. The Hutchinsons know they are in for some hard work but have a conviction that they can get it right and see the business grow. Buying a second or third franchise is not out of the question in the future but the success of each, according to Simon, will be down to keeping them to the right scale so they do not lose the commitment to service and invaluable local knowledge. “The business venture is unlike buying a normal franchise where you buy the brand, a website and

A

RGUS Express Limited is the company established by husband and wife team Simon and Kate Hutchinson to acquire the Plymouth-based franchise for Interlink Express, the leading provider of parcel delivery services and part of global brand, GeoPost. Simon and Kate had left the Army and were considering establishing a “lifestyleâ€? related business in leisure or tourism and hadn’t really considered parcels as a future for themselves. They became aware of the availability of the Interlink franchise, which at the time was falling behind the other successful franchises in terms of growth, staff retention, reliability and customer service, and realised the possibilities. The business is based on delivering parcels sent from other franchise areas to the end-user quickly and efficiently, and collecting parcels from business customers for onward delivery in other regions. The delivery side operates on low margins and therefore depends on the more profitable collection side where growth is a major business objective. An imbalance in favour of deliveries will inhibit growth which across the GeoPost Group runs at an impressive 10 per cent per annum. The Plymouth Interlink franchise covers an area from Dartmouth, across to Fowey and up to Tintagel. It runs up to 18 vehicles in a mixture of company vans and self-employed owner/drivers and has delivered or collected some 450,000 items in the past year achieving a turnover of nearly ÂŁ1million. However, Simon, who manages the business strategy, and Kate, who handles HR and payroll, know there is considerable potential for growth. Simon said: “Getting the right balance is crucial to our future success but there are a number of factors that need to come together to achieve it. “Firstly, we need to recruit and retain the right people and reward them when the business can afford to do so. “We are fundamentally a ‘people’ business supported by a very robust IT system, which enables us to offer a one-hour delivery window that customers receive via text or email as the driver leaves the depot. “Customers can also track the progress of their delivery in near real-time on the internet. “A 99.9 per cent success rate is

‘We are fundamentally a ‘people’ business supported by a very robust IT system’ the proprietary kit to get you going,� he said. “What struck me about the GeoPost system was the real belief in being the very best network, the inter-dependence of all 60 or so franchisees across the country and caring about giving a service. “This is how we feel about it. It’s our business and it’s not just about profit and loss, it’s about doing the right thing for both our staff and our customers.�

! !

Husband and wife Simon and Kate Hutchinson of Argus Express

‘Our number one priority is service’

likely to put you in the bottom 10 franchises, the system is that good. “It also significantly reduces telephone calls from customer to sender and forms the basis of a positive relationship with the customer which we want our drivers to develop. “If you want to achieve this you need to show an interest in the staff as people, not just in what they do. “Equally, we need to treat customers as people and not just account numbers. “What makes us different in the industry is that if a customer needs to ring us for whatever reason, they speak to one of our staff right here in Estover and not a call centre somewhere in the UK or overseas. “Our number one priority is service and as our reputation for reliability and service grows we know we can grow our business customer base.� In addition to looking after their staff and increasing collections,

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PAGE 16

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

Family roots are deep in growing, innovative firm Kernock Park Plants

H

AVING started Kernock Park Plants 26 years ago at the age of 49 after a successful career as a horticultural adviser with the Ministry of Agriculture, Fisheries and Food, Richard Harnett moved from a hands-on owner/manager to what he describes as a part-time “gofer� using his semi-retired role as chairman to take on special projects and advise on financial matters. The business, which propagates 14million plants under cover at a site at Pillaton, near Saltash, is now run by Richard’s son Bruce, as managing director. Another son, Christopher, runs InstaPlant, a part of the company producing two-dimensional and 3D living displays from carpet bedding plants, while Bruce’s wife Jo is in the sales office management side of the business. Richard recalls that succession planning was a challenge having four children, only one of which clearly wanted to take the business on. He said: “Bruce took a degree in environmental science and seemed keen to develop the business following this. “Christopher works in the business but has other interests and ambitions. “The question was how to retire comfortably and hand the business over to one son whilst not putting the others at a disadvantage. “One solution could have been to sell but the logistics of running a supply business in the South West makes this a challenge and another was to organise an MBO arrangement. “We took professional advice and the outcome has been very satisfactory with Bruce now in charge and bringing a new perspective and fresh ideas to the business.� Kernock grows the highest quality young plants and nursery stock liners for wholesale growers within the UK, Ireland and mainland Europe to grow-on into finished pots and liners ready for retail in su-

Expert cashflow advice for the family business By Alastair Logan Regional Director Ultimate Finance Group

Q. HAVE you got any tips for achieving steady cashflow in a family business? A. Every type of business experiences cashflow challenges from time to time. But when the directors are related to each other, and possibly living together, cashflow problems can be especially stressful and painful. We understand this. Our head office is in Bristol and have many clients in Devon and Cornwall – we’re part of the community, understand the local economy and spend a lot of time helping companies where some of the most important discussions happen around the table in the kitchen, rather than in the boardroom! The traditional sources of business finance, such as the banks and major institutions, are probably not best placed to help. Their sheer size means that they have to take a very rigid approach – it’s all about box ticking, you seldom meet any of the real decision makers and the process is slow and frustrating. And they don’t have time to take into account the family dynamics that make each business situation totally unique. ■We work hard to find the best way of saying “yes�

Top: Bruce Harnett and his father Richard Harnett of Kernock. Above: Employees Dolly Tremblett and Monika Zurawik

permarkets and garden centres. It has an extensive product range of more than 1,200 varieties, including bedding and patio plants to hardy and herbaceous perennials, grasses, shrubs and succulents. The InstaPlant operation uses computer assisted design produced carpet bedding displays for local authorities, Na-

tional Trust properties and a wide range of special events and has included work for the Commonwealth Games, the Queen’s Diamond Jubilee and Wimbledon. Innovation is a constant theme at Kernock. The business strives to bring new and interesting plant varieties to market and is constantly experimenting and trialling new techniques to improve productivity. Research into mechanisation is ongoing but the hilly nature of the site isn’t helpful. Energy is a major overhead and the business has invested in two biomass wood chip boilers which kick out 4Mw of power and use about 3,000 tons of wood each year, sourced in the South West from as far as Truro to Taunton. There is a core of 58 full-time equivalent staff employed from the local communities and this number is augmented by up to 24 more temporary local and overseas workers, most of which are in the peak of the growing season from January to June. Kernock has also built an impressive Passivhaus on site

as accommodation for 18 of its workers. Richard said: “When it comes down to it, we are running a factory and are largely open to the elements. “It can be a challenge to find people locally who want to come and work in what can sometimes be harsh conditions. “We run an apprentice scheme and try to develop local employment but also find workers from outside of the UK. “Some of our customers, particularly other family businesses really appreciate the fact that we are a family business with the values you expect to go along with that. “Loyalty is hard to secure on a long term basis. You may be able to deliver a quality product and a first class service, but if the price isn’t up to the mark then the advantage disappears. “In terms of competition, the ‘big boys’ have eroded the edge we had as a provider of niche products. “To keep ahead, we must continue delivering a quality service, introduce different crops and remain innovative.�

Although we’re now quite a substantial business ourselves the approach is very different. Firstly, and very importantly, we have an appetite to lend! Secondly you immediately meet senior people who listen carefully and treat each application on its individual merits. I’ve never come across a situation that’s entirely straightforward – there are always awkward circumstances that can become sticking points. Instead of regarding these as deal-breakers we’ll use our expertise to find ways around them. We create bespoke solutions that are uniquely tailored to your needs. ■A wide range of options

An increasingly popular cashflow solution is what’s known as Invoice Finance. This is an arrangement where a lender provides a cash advance which releases up to 90% of the money you have tied up in your unpaid invoices. Having said this, the term covers a multitude of different options and the key thing from your point of view is to find a lender that offers a sufficient variety – that way you get a facility that really meets your individual needs. Over the last 18 months we’ve developed a number of innovative niche products for businesses in the construction and recruitment sectors, as these are industries which have very unique issues and requirements. We’ve also created an excellent facility that integrates Invoice Finance with Trade Finance to offer a better way of funding the purchase of goods from abroad. And we’ve even launched a website where businesses can access short term loans with ease – the process is very quick, releasing the money in a matter of hours. Plus we offer Asset Finance facilities to companies wanting to buy vehicles and equipment. Whatever your cashflow challenge we can almost certainly find a way to help – and really understand the special dynamics of a family business. Alastair Logan is Regional Director at Ultimate Finance Group PLC, a leading provider of financial and cashflow solutions to SMEs across the UK from its headquarters in Bristol. Contact him at alogan@ultimatefinance.co.uk or call him on 07912 248 706

The Herald, Wednesday January 14 2015

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FamilyBusinessGuide2015

Treating customers like our family

Left to right: Joanne Blower, Iain Gray, John Menhenitt and David Gray

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G&R Electrical Wholesalers

G

&R ELECTRICAL Wholesalers has been a fixture at Plymouth’s Faraday Mill since the business was started in 1988 by David Gray and his partner Brian Revel. After Brian’s sudden and sad death 23 years ago, G&R has been headed up by David and he has built it into one of the foremost electrical wholesale and service businesses in the South West, with two branches in Plymouth and Redruth, a staff of 32 and an annual turnover in excess of ÂŁ5million. G&R provides an extensive range of electrical equipment primarily supplying independent electrical contractors, alarm installers, industry and developers. It also provides consultancy services across a wide range of specialisms including LED lighting, energy saving, CCTV, security systems, fire alarm systems, ventilation and automation. David’s son Iain joined the business in 2000. In 2011, along with David and Iain, two long-serving and important members of the management team, John Menhenitt and Joanne Blower, formed the board enabling David to semi-retire. David Gray said: “Our team has built a good healthy business in which we have continually reinvested, and one that is based on supporting our customers, not only with competitively priced products but also with expert advice, quick response and personal service. Customers are the most

important part of our business and we have forged strong relationships with them over many years. We would like to think that our customers like dealing with a business that has family values. “We’ve taken risks as we’ve grown, but as a family business you can’t afford to fail. “Our strengths have been employing the right mix of knowledgeable people with a good understanding of our customers’ needs. “We support this with high levels of stock and quick response; this gives our customers confidence in us and they remain loyal. “That’s good for us, good for them and good for the local economy as the money earned and spent here stays in the region, and we try were possible to support local business.â€? G&R is able to compete with the national electrical wholesalers because they are part of AWEBB, a consortium of 60 independent electrical wholesales with a combined turnover in excess of ÂŁ250million. Terms are negotiated nationally by the group’s chief executive. The company also enjoys very close working relationships with the main industry suppliers and is able to monitor new developments and trends, train its staff and pass the specialist knowledge on to customers. The company has plans to maintain its current growth.

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Opening Hours 7.30am - 5.00pm Monday to Friday 8.30am - 12.00pm Saturday Mornings 3O\PRXWK %UDQFK 8QLWV )DUDGD\ 0LOO %XVLQHVV 3DUN 3ULQFH 5RFN 3O\PRXWK 3/ 67

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

A passion that led to a family empire T

he chairman of Vospers, Peter Vosper, was recently awarded an honorary doctor of business degree by Plymouth University in recognition of his business expertise. He received his degree alongside celebrity graduates such as Queen drummer Roger Taylor, TV chef Hugh Fearnley-Whittingstall and cellist Julian Lloyd-Webber, all acknowledged leaders in their field. Indeed, Peter is such a leader and has seen the family business become one of the most recognised brands in the West Country. Vospers has grown from one man’s passion for motoring to a business with a turnover approaching £200million, and with 24 sites in Devon and Cornwall.

Vospers

Founded by Frank Vosper after the Second World War, the business blossomed after acquisition of the Ford franchise in the 1950s. Peter, on completing his accountancy training, joined the firm in 1966 and, following the death of his father in 1974, took the helm and continued to expand the enterprise which included acquisition of the Mazda franchise in the 1990s. The company became a multi-franchise business when brands such as Fiat, Alfa Romeo, Abarth, Peugeot, Renault, Nissan, and Chrysler Jeep and Dacia, became part of the portfolio.

Peter Vosper (right) pictured with son Nick and brother-in-law Eric Goss

Following successful completion of his business degree, and work with Ford Credit in Paris and Ford Motor Company, Peter’s son Nick joined the business. Nick’s training was enhanced through successful completion of an MBA at the University of Exeter and being mentored by his father. Nick became managing director in 2011, with Peter as chairman. Nick said: “We continued to grow

and invest throughout the recession.� He added: “Being a family-owned business has many advantages. “We are quick to respond to the needs of our customers and we encourage the empowerment of our staff to make decisions in the interest of the customers and the business. “Decision-making at a board level is not protracted and in our

case does not need to consider the needs of shareholders who may have no involvement in day-to-day running of the business. “Family members tend to be more open about problems and discuss them freely and sometimes emotionally. “I would prefer to work in this environment as in many large companies views are not always aired for fear of recrimination.�

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Applying razor sharp innovation Applied Automation

A

Inside and outside Applied Automation. Managing director David Rowe is pictured top with his son Paul Rowe, technical sales engineer

PPLIED Automation (UK) Ltd diversification has seen diversification turn it into a ÂŁ13.4million-turnover company which is growing and taking on staff. The Langage-based manufacturer is involved in the design and build of industrial control systems and bespoke automation equipment. It already employs 125 people and is among the shining lights of Plymouth’s growing manufacturing sector being named Medium-sized Business of the Year in The Herald Business Awards 2014. Last year it also unveiled a new high-tech showroom for its marine arm and another to give the public a glimpse of the smart technology they’ll soon have in their homes. Meanwhile, the company continues to design and then build all manner of complex, bespoke equipment, even single machines for just one purpose, one client. It is this problem-solving approach which has enabled the company to build a firm foundation, particularly in the automotive and medical sectors. The firm specialises in mechanical and electrical design, and software. For automotive it works with first- and second-tier suppliers, it has, for instance, made riveting machines which now are used in top marques. For medical, companies such as Roborough’s BD are key customers. When the recession bit, the firm’s ability to diversify into other sectors enabled it to continued to grow into a company with a ÂŁ13.4million turnover in 2013/14. The business started in 1986 with just three people. David Rowe, managing director, was one of that trio but found himself in charge when the founder retired shortly after launch. Now he is joined by his son Paul Rowe, technical sales engineer working in the Engineering Solutions division. “While it was never a requirement for any of my children to join the family business, I was obviously hopeful at least one would,â€? David said. “I have three sons. Two have chosen a different career path but Paul was adamant he wanted to be involved with Applied Automation. “So he could gain a full understanding of the business, he joined as an electrical apprentice and is progressing through the ranks.

“It’s not easy to work within a company when you’re the son or daughter of the boss. “There are high expectations and you have to overcome a certain amount of suspicion to earn the respect of your colleagues based on your own abilities. “So, is it inevitable that my son will end up running the business? Well, no not necessarily. If Paul wants that role, he has to demonstrate the skills, determination and drive to take on a successful company and give it a prosperous future. “Ultimately, the health of the business is the most important factor. “But, of course, when the time comes to choose a successor I would really like to think that Applied will remain a family business with Paul ready to take the helm.�

‘If Paul wants to run the business, he has to demonstrate the skills, determination and drive’

When David first took over at Applied Automation, the firm specialised in computerised control systems but soon diversified. Applied Automation was originally based at Parkway industrial estate but bought and extended its current Langage plant five years ago after receiving a £400,000 grant from the South West Regional Development Agency. Applied Automation’s other new showroom reveals how householders can control an entire home at the touch of a button on a phone or tablet. The firm is aiming for the residential and commercial sectors, from high-wealth individuals to hotels and conference centres. The smart room of the future involves everything from temperature control to TV entertainment being controlled centrally.

AUTO ENROLMENT – WHAT DOES IT MEAN FOR YOU? As an employer do you know what you are legally obliged to do and when?

We are ready to take your worries away To attend a Free Seminar on 10th February or to find out more contact simonjilks@parkhurst-hill.co.uk www.parkhurst-hill.co.uk

01752 666601

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The Herald, Wednesday January 14 2015

FamilyBusinessGuide2015

Roll out the red carpet for the £2.5m family firm that’s flourishing 52%(576 )/225,1*

&2175$&7256 /,0,7('

Founders Terry and Doreen Roberts with daughter Emma Taylor and son and MD Richard Roberts

Roberts Flooring

K

NOW your products, give best advice and do it right, every time. That’s the philosophy that has kept Roberts Flooring Contractors operating successfully for the past 25 years. The Cattedown-based company supplies and installs a vast range of flooring types from carpets and safety flooring through to specialist finishes and hygienic wall cladding for medical premises. Its customer base ranges from private residences to shops, offices, schools, universities, military establishments, hospitals, surgeries and nursing homes. It operates throughout the South West but has worked in London, Northern Ireland and France with its largest contract in recent years being 460 student accommodation units at Astor House, in Plymouth, on behalf of Leadbitter Construction. Like many successful family businesses, Roberts Flooring was started by a husband-and-wife team working from home. Terry and Doreen Roberts started up in 1989 with just a second-hand Post Office van but have seen the business flourish to become one of the biggest flooring contractors in the South West. It now employs 30 people, turns over ÂŁ2.5million and has three branches in Plymouth, Redruth and Exeter. It has achieved ISO 9001 and is a member of the Contract Flooring Association. With his parents now semi-retired, the business is now run by 39-year-old Richard Roberts with his sister Emma Taylor on the management team as an estimator. Richard said: “The business has always been run on a stable basis. We keep overheads low and mum and dad were prudent

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enough to continually reinvest in the company. “We don’t get sudden massive bills and we buy what we need rather than leasing vehicles and equipment. “This has enabled us to have control over our own affairs and maintain staff levels even when times were tough. “Margins in this sector are tight but we are competitively priced and the personal service we provide gives us an edge. “Our staff loyalty is mirrored by strong customer longevity. We have domestic customers who have been using our services for years as well as some major institutions. “For instance, we have been working for Kelly College, in Tavistock, for 25 years. “An important aspect of this is really connecting with your customers, understanding what they want and giving them consistent, best advice. “We opened satellite branches in Redruth and Exeter partly as a response to rising fuel costs but also because customers like the feel of a family business and are made confident by having locally-based, skilled fitters who are adept at problem-solving doing their work. “The surge in house building has helped us grow naturally and the recent increase in new contracts now requires us to recruit more skilled fitters and a new estimator in the near future. “The family ethos runs right through our business and I believe all our staff are committed to doing the very best job for our customers no matter what. “As a family business, we have a conscience. It’s not just about profit, it’s about doing the right thing.�

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GrowthAccelerator now part of Business Growth Service T

HE Business Growth Service brings GrowthAccelerator, the Manufacturing Advisory Service (MAS) and schemes from the Intellectual Property Office (IP Audits) and the Design Council (Design Mentoring) into a single service. Export support is provided by UK Trade & Investment (UKTI) and UK Export Finance (UKEF). The service is closely linked to InnovateUK and the British Business Bank. It will provide tailored packages of support to help businesses with: â– developing new ideas â– help in identifying and breaking down internal barriers to innovation, including R&D, design and protection of intellectual property â– leadership and management skills â– building the skills and capabilities of managers through bespoke training to fill skills gaps identified in the management teams.

Business and Enterprise Minis-

delivered overseas. James Harding-Terry, managing director, said: “When you are a growing business you look for every bit of expertise you can find and I’ve been delighted with the support we’ve received. “We had specialist manufacturing assistance to start off with followed by help to deliver our three-year strategic plan. “This involved leadership and management training for ten of our staff and signposting to other funding opportunities. The end result is

‘Small businesses told us the support available was too disjointed so we have joined it together through our new Business Growth Service’ ter Matt Hancock said: “Small businesses told us the support available was too disjointed so we have joined it together through our new Business Growth Service, which will provide a tailored package of support to thousands of firms each year.� Over the past three years the most established services, GrowthAccelerator and MAS have

achieved some notable successes: â– firms supported by GrowthAccelerator are growing over four times faster than the average UK SME â– GrowthAccelerator now works with 19,000 businesses.

Tapping into support from Business Growth Service’s GrowthAccelerator and Manufacturing

Advisory Service range has helped PCT Metalmex pass the ÂŁ5million turnover barrier for the first time in its history. The company, which provides pressed components, profiling and fabrication services, has been working with MAS for numerous years on lean manufacturing, supplier matching and re-shoring a new contract that is about to be

an increase in sales and putting in place the platform for 30 per cent growth in 2015 and the recruitment of more apprentices.� The Business Growth Service is aimed at businesses with the potential to improve and grow, based in England, with fewer than 250 employees and a turnover of less than £40million. For more information, contact your local business growth manager Yvette Coles on 07747 015 837. www.businesswest.co.uk/growthaccelerator

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FamilyBusinessGuide2015

The heart of the community I

T IS pretty unlikely that when John and Irene Gillett took the decision, 30 years ago, to leave the family tradition of dairy farming and move from Lancashire to Cornwall and buy a Spar convenience store that they would ever have imagined it would lead to the formation of a company which today owns 61 Spar shops across five counties, employs more than 1,000 people and turns over £85million from its retailing and associated services. The Gilletts started well at their new Callington store taking more than £10,000 in their first week and this gradually grew as they extended the opening hours – even incurring an early fine for trading on a Sunday – and increased the range of products on offer, and refitted the shop. When the turnover hit a weekly

Gilletts of Callington

ÂŁ40,000, they knew they were on to something and had the confidence to expand. Perhaps more significant than sales volumes for the future growth of the business was the lesson that local convenience stores are successful only when you truly connect with the community where you are located and employ team members that can represent the family values that made the original retail venture work. Managing director Mark Gillett is in no doubt that this is the case. He said: “We are a large business and a significant employer but we

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remain a family business with family values. “We are very different from corporate entities and are not driven by meeting targets. “We look after our employees and enjoy low staff turnover, very low when it comes to management roles. I think we have over 250 individuals who have worked for us for more than 20 years. “I spend at least two days a week on store visits. I get to meet all the team members and not just the managers. We treat each employee as an individual and they get to know me.

A landscape of sustainable growth

W

ORKING with your father as your business partner can lead to disagreements, but has many advantages. So says Ian Wade, who a decade ago formed Mian Landscaping Services with his dad, Mike Wade. He claims there are no issues of trust, and there is more support than an ordinary employer might provide. Ian said: “We look after each other, and when I had to have seven weeks off work following a big operation there were no complaints.� The duo launched their landscaping business at the start of the recession, but prospered by concentrating on up-market private projects. They began by doing jobs for relatives, and decided to go into partnership professionally. That was back in 2005, when Mike left his former profession as a design engineer and Ian, then aged 19, was an apprentice with another company. Ian said: “My father started doing landscaping work and I joined him. “People kept coming and asking us to do work, and we thought ‘We can make a business out of this’. Since then we have won many awards, the most recent from suppliers Marshalls in the ‘best patio trans-

Pictured rear: Alan Cookson, Mark Gillett, Jane Alford, Irene Gillett, John Gillett. Front: Stephanie Maclachlan, Jessica Cookson, Luke Gillett and Sharon Cookson

“It is important that they are motivated and represent us in the community. We will only be successful if we deliver outstanding customer service.� There are currently nine members of the family working in the business. John and Irene Gillett, respectively chairman and company secretary, are semi-retired. Their son Mark is managing director, daughter Jane Alford is a director and John’s step-son Alan Cookson is IT director. Alan’s wife Sharon is a Post Office area manager, Mark’s son Luke is a butcher, his niece Jessica Cookson is a Post Office trainer and Jane Alford’s daughter Stephanie is part of the Subway team in Plymouth. Mark Gillett said: “As a family-owned and -managed business, we are not answerable to shareholders who want quick returns. “We are able to take a longer term view and plan our investment. We are naturally cautious and only do what is right for the business. We are more in control of our own destiny. “We are also able to be more responsive and make quicker decisions in times of change and opportunity. “We plan to continue growing but will do so prudently investing in new stores and recruiting when the time and conditions are right.� Mark acknowledges that working with your family is “not always a bed of roses� and that differences of opinion regarding policy will occur from time to time. It will certainly be a surprise if the Gilletts’ formula for success doesn’t lead them to opening many more convenience stores in the future.

Ian Wade, Matthew Putt, Dan May and Mike Wade

formation over 75 square metres’ category for a project in Oreston. “We do little commercial work, concentrating on designing and construction of outside areas including decking, fencing, paving, patios and water features. “Our work is all designed properly, mostly using natural sandstone, granite or limestone and with a high-end quality finish.� Ian added: “We don’t want to be massive; we have an apprentice who we want to employ full time and would like to take on another, people who can grow with us. Plympton-based Mian has also launched a sister company, Artificial Lawns Plymouth, to cope with the growing domestic demand for all-weather lawns.

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