BQ2 North East Santander SME Breakthrough

In association with

SPECIAL REPORT: SME BREAKTHROUGH PENNY COINS IT IN David Penny’s amazing journey

PUNK TO GURU How retailer went from rocks to riches

BIG HITTER The city punching above its weight

A Northern law firm Ward Hadaway are immensely proud of our roots in the North East. For over 25 years, we have been supporting businesses in our region through good times and bad.

Our commitment to the North East remains unwavering as a Northern law firm for national business.

“Ward Hadaway is valued for its ‘responsiveness and proactive involvement’ in driving matters forward, and for its ability to find solutions to problems.”

LEGAL 500

www.wardhadaway.com Newcastle | Leeds | Manchester

SPECIAL REPORT | SUMMER 15

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SME BREAKTHROUGH

CONTENTS

CONTACTS

10 PENNY COINS IT IN

ROOM501 LTD Bryan Hoare Managing Director e: bryan@bqlive.co.uk t: 0191 389 8468

How David Penny went from being jobless to quirky entrepreneur

16 FROM PUNK TO GURU

EDITORIAL Peter Jackson e: p.jackson77@btinternet.com

Psyche boss Steve Cochrane’s amazing journey from rocks to riches

DESIGN & PRODUCTION room501 e: studio@bqlive.co.uk

20 PILLARS OF WISDOM Santander’s Vanessa Collins on the golden rules leading to success

30 POSITIVE SIGNS Symbol Signs boss Paul Walker can finally focus on his firm’s potential

36 BIG HITTER When it comes to enterprise, Sunderland punches above its weight

40 BRIDGING THE GAP Square One Law’s Neil Warwick offers advice for firms in transition

44 FUNDING THE FUTURE FW Capital’s Joanne Whitfield is helping firms unlock their potential

48 A SPACE TO GROW County Durham’s NETPark is proving to be an inspirational environment

THE FACE-TIME FACTOR

SPECIAL REPORT:

BREAKTHROUGH TO SUCCESS

WELCOME A river of entrepreneurial spirit has been flowing fast through the North East for generations. Times change, technologies change, strategies change, but the ideas and inspiration never dry up.

Santander is on the frontline, helping bring those ideas to life to provide jobs and hope and underpin the regional and national economic recovery.

In this magazine, we drill down to examine these growing firms and hear what journeys they have been on and we talk to some of the most influential people in the finance and SME sectors, from Santander’s Mark Farrington to Psyche’s Steve Cochrane.

I hope you’ll find it a fascinating and thorough look at the sector and the people who make it tick. But most of all, I hope you might find a little inspiration in these pages, or a piece of advice or wisdom that might make the difference to your plans.

PETER JACKSON Editor, BQ Yorkshire

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PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk Chris Auld e: chris@chrisauldphotography.co.uk SALES Heather Spacey Business Development Manager e: heather@room501.co.uk @Heather_BQ Rachael Laschke Business Development Manager e: rachael@room501.co.uk @Rachael_BQ or call 0191 426 6300

room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT www.bqlive.co.uk Business Quarter (BQ) is a leading business to business brand recognised for celebrating entrepreneurship and corporate success. The multi-platform brand currently reaches entrepreneurs and senior business executives across Scotland, the North East, Yorkshire and the West Midlands. BQ has established a UK wide regional approach to business engagement reaching a highly targeted audience of entrepreneurs and senior executives in high growth businesses both in-print, online and through branded events.

All contents copyright © 2015 room501 Ltd. All rights reserved.

While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All company profiles are paid for advertising.

All information is correct at time of going to print, June 2015.

room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

In association with

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BQ Magazine is published quarterly by room501 Ltd.

SPECIAL REPORT | SUMMER 15

NEWS

SUMMER 15

Heating trade supplier aims to double its workforce, confectioner celebrates 30 years of sweet success, telecoms business on the hotline to success, help at hand for innovative businesses seeking investors >> Firm all set to expand A refurbished computer equipment selling company has secured a £550,000 investment to expand and create jobs.

RefurbThat, which is based in Cramlington, Northumberland, has received £400,000 from private equity firm Hamilton Capital and existing investors and £150,000 from the Finance for Business North East Angel Fund, which is managed by Rivers Capital Partners.

RefurbThat is a Microsoft Authorised Refurbisher, one of only a few in the UK. The company takes used computers from Europe, the UK, and the US and refurbishes them for resale. Its key customers include SMEs, charities, education organisations, local authorities and major national companies. The company also sells to individuals.

RefurbThat will use the funding to invest in its stock levels and to provide additional working capital as it looks to continue expanding its turnover towards around £7m in the next three years. The company currently employs eight full-time staff with a number of parttime contractors and expects to have around 20 full-time staff by the end of next year as it grows the business. Managing director Mark Harrison said: “The investment from Hamilton Capital, the Finance for Business North East Angel Fund and our existing investors, will make a major difference to the amount of stock which we can hold and the number of customers who we can supply as we look to further expand the business.”

Andrew Lapping, partner at Hamilton Capital, said: “From what I have seen, RefurbThat has a real prospect of becoming a dominant player in the UK market.”

Law firm Ward Hadaway provided legal advice to Rivers Capital Partners on its investment in RefurbThat. Imogen Holland, corporate partner at Ward Hadaway, who led the firm’s team, said: “RefurbThat operates in a sector with a lot of growth potential and has a national reach as well as an important seal of approval for the quality of its offering.”

SPECIAL REPORT | SUMMER 15

The firm’s MD: John Savage

>> Flame plans to keep on spreading North East trade supplies firm Flame Heating Spares has identified the site for its fourth outlet as it looks to continue expansion, doubling its workforce in 2015. The company, which already has a lead branch on Gateshead’s Team Valley, as well as trade counters in Durham and South Shields, is opening its new Sunderland site. It is also moving its lead branch into a new Team Valley site, doubling its space, to allow for more stock to be kept for same day supply to trade customers. Plans include identifying and opening a further two branches later in the year, as well as 100% growth in staff levels in 2015. The company employs 13 people. Work to increase the staff has already begun with the appointment of two apprentices, one each at the Gateshead and Durham branches, and a new driver at Team Valley. The new Sunderland branch, on the Riverside Industrial Estate, will be led by a yet to be announced ‘investor director’, who will have a stake in the success of the operation. John Savage, the firm’s managing director, said: “Since launching the company in 2013, we have taken a single branch and created a chain of three, which will soon become four. I hope that, by the end of 2015, it will be at least six.

Each branch not only aims to provide excellent, same day service to our customers, but to create local jobs. We also ensure that the branches are run by people who know the industry in their area and take an ownership stake in the site they lead, which helps to drive business and service levels. With our new apprentices and the new driver at Team Valley already on board this year, it is an exciting time for myself and the Flame team.”

Each branch not only aims to provide excellent, same day service to our customers, but to create local jobs

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SUMMER 15

NEWS

>> Celebrating sweet success

>> Partnership aids growth

North East confectionery manufacturer Sweetdreams is celebrating its 30th anniversary as it unwraps plans for growth over the next five years. Managing director Matthew Stephenson has outlined ambitions to grow turnover by 10% yearon-year by increasing its national footprint and introducing new product lines to its Choc Nibbles range. Since taking over the business in 2007 after buying out its former owners, Stephenson has grown the business to an 11-strong team, more than doubled turnover and has invested over £80,000 in its Cramlington factory, following a grant secured from Arch Northumberland to increase production capability and to diversify into new packaging formats. As part of Sweetdreams’s investment strategy, the firm has bought new manufacturing machinery, expanded warehousing capacity by 50% and taken on five recruits to meet increasing demand.

Stephenson said: “We’re delighted to be celebrating Sweetdreams’s 30th anniversary.

This year we’re targeting double digit growth.

Key focus areas include targeting the growing discount sector, to extend our distribution and wholesale network particularly in southern England. With a new distributor recently confirmed, we’re seeking opportunities for expansion into Southern and Northern Ireland.

We’re also looking at seasonal gifting lines and potential export opportunities.” Founded in 1985 from the legacy of F&M Dobsons, Ponteland, Sweetdreams initially operated from a small unit located in Cramlington, employing just four people and launching with its first product, Choc Nibbles. The Stephenson family bought the company in 2007 and now Sweetdreams dispatches more than 15 tonnes worth of product a week across the UK.

Technical design consultancy Vreo is expanding with the support of the North East’s new youth employment programme.

Generation NE, a £4.5m partnership between five North East local authorities including North Tyneside Council, has enabled Vreo to access the funding and training needed to recruit Ross Embleton from North Shields.

Embleton, 23, joins the North Tyneside-based firm as a full-time engineer, responsible for printed circuit board design, programming and network management within Vreo’s research and development team.

His appointment forms part of Vreo’s expansion plans, which the company outlined after it reached global markets within only eight months of trading.

Vreo designs electronics and optoelectronic circuits and develops imaging systems using cameras, lighting and optics. Its products are used across a range of sectors including

We’re delighted to be celebrating Sweetdreams’ 30th anniversary

Going for growth: Councillor Harry Trueman, deputy leader, Sunderland City Council and Paul Stott, of Lasercutouts

>> Cut out for bigger things A growing Sunderland company that started as a hobby is creating jobs to meet demand for its direct sales through its website and shop and growing businessto-business work.

Lasercutouts designs and produces a selection of precision shapes, quotes and letters for crafters. Business-to-business work in areas such as display and signage, promotional branding and prototyping is growing with the help of its own in-house design services, from its new home on the Crowther Industrial Estate in Washington.

The company is expanding from its current three members of staff and is aiming to create two jobs and an apprenticeship as it prepares for Christmas demand. Former local authority IT network manager Paul Stott started Lasercutouts as a hobby and sold his products at craft fairs. He left his job at Gateshead Council three years ago to start a full-time business.

He said: “We are now in a manufacturing unit five times larger than our original Southwick premises. It also benefits from a retail space, which has given us a public face and additional passing trade.”

Sunderland City Council leader, Councillor Paul Watson, said: “Lasercutouts is a great example of a business that started small and is now poised to flourish.

“It is great news the firm is creating jobs for Sunderland, and bringing in business which will benefit the wider economy.”

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Generation NE played a pivotal role in enabling us to grow healthcare, fire and security, biometrics, night vision and intelligent transport systems.

Mark Vernon, Vreo’s managing director, said: “Since establishing Vreo we have seen a great deal of success and Ross is the first of a number of new recruits that we will be looking to welcome to the team over the coming months. Generation NE played a pivotal role in enabling us to grow and securing Ross’s appointment. We worked closely with our business advisor Barbara Clark and employment advisor Lorreen Butler from the programme throughout the entire process.

They both took the time to understand what the business required to support a new recruit and provided a tailor-made service to match our needs.” Generation NE, part of the North East LEP’s Growth Deal, is empowering North East SMEs to future-proof their workforces.

SPECIAL REPORT | SUMMER 15

NEWS

SUMMER 15

>> Ringing in the changes SUNDERLAND telecoms business Pebbletree is on the hotline to success, after recruiting to meet increased client demand. The North Sands Business Centre company, which offers a range of services including Voice Over IP (VoIP) – an internet-based telephone system – and a virtual receptionist service, has added to its team with six new appointments, and is forecasting revenue growth of 18% year-on-year.

The business’s success comes after a string of award wins and a move to a bigger office space in October last year. It has plans to add to its team, with four further appointments expected to be made over the next few months. Janni Thornton, managing director of Pebbletree, which is made up of four sub-divisions, said: “The company has enjoyed a really strong 2015 so far, and we have ambitions to continue to grow.

“The different arms of the company have been succeeding in their own right, and it has been fantastic to see the team here rise to the challenge.

“We have been able to attract great people, and in return, they join a company that is growing quickly and that is exciting to be part of. We really do hope to keep adding to our number year-on-year as our client base grows.”

Among the recruits that have joined the team over the last few months is a PR and communications specialist, a creative advertiser, a number of virtual receptionists, a sales executve and a technical support assistant.

The company now has a 20-strong team, based primarily in Sunderland, as well as a staff-base in Ireland.

Councillor Paul Watson, leader of Sunderland City Council, said: “Pebbletree is a shining example of an innovative, fresh-thinking business that takes a bright idea, underpins it with a really strong delivery team and takes its offer to market, both here in the North East and beyond.”

SPECIAL REPORT | SUMMER 15

>> Australian partnership a ‘natural fit’ for North East company North East technology company Synergi IT is expanding its software range and developing a new division to manage its growth. The Tyneside company has established a strategic asset management (SAM) division after signing an exclusive UK partnership with Australian software firm, Assetic. Synergi will now bring software and services to the UK and Europe for the first time, helping large businesses and public sector organisations manage the degradation of assets and an ageing infrastructure. Peter Joynson, managing director of Synergi IT, said: “Assetic’s powerful specialist software will allow large private and public sector organisations to better manage and maintain a large asset stock. It will be an important tool for local authorities, the utilities and NHS, organisations that are facing financial cuts and need to manage asset decay.”

This partnership deal with Assetic represents an expansion in services and markets for Synergi which remains focused on delivering specialist IT support to businesses in the North East and Scotland in Microsoft Cloud, Office 365 and SharePoint, along with Nintex and associated products. Joynson added: “Our ethos at Synergi is about driving the adoption of the next generation of IT business technology tools. When the opportunity arose to work closely with a world-leading software firm like Assetic, it was a natural fit.”

>> Help at hand for innovators Venturefest North East has announced a collaboration with the UK governmentbacked Business Growth Service to prepare innovative businesses to attract external investment. The move will enable innovative businesses looking for investment for growth the opportunity to come face-to-face with potential funders at the Meet the Investor element of Venturefest North East 2015, the region’s innovation conference on October 13.

Businesses from the North East and across the UK are now being urged to apply to be considered for Meet the Investor and their chance to pitch their ideas to venture capitalists, angel investors and fund managers.

Venturefest North East is a key element of the North East LEP’s innovation programme and is part of a national network of innovation

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conferences supported by the UK’s innovation agency, Innovate UK, and the Knowledge Transfer Network.

The Business Growth Service, now incorporating GrowthAccelerator, and Venturefest North East will bring together more than 25 investors at the event.

These represent the wide range of funding sources available to innovative business in the North East, from start-up loans of a few thousand pounds right up to multi-million pound loan and equity deals.

The investors cover a broad base of business stages and sectors from tech start-ups to social enterprise and from the creative industries to high value manufacturing, and are all focused on investing in strong growth potential.

• Venturefest North East will return on Tuesday October 13 at Gateshead’s Hilton hotel.

SUMMER 15

COMPANY PROFILE

North East LEP asks businesses to test business support platform The North East LEP has unveiled an early version of its new online business support platform - the North East Growth Hub (www.northeastgrowthhub.co.uk).

Designed to be the go-to resource for North East companies looking for information and advice on business support and finance, hundreds of North East businesses have already signed up to try, test and contribute to the Growth Hub’s content and feature development over the coming months.

There is still time for businesses interested in playing a part in the ongoing development of the North East Growth Hub to join the Beta testing phase. Bob Paton, chief executive of the North East Local Enterprise Partnership, said: “The North East Growth Hub will flourish with the support of the business community, which is why we’re keen to welcome as many organisations as

possible to test the Beta.

“Collaboration is key to the success of this project.

We want the business community to share their thoughts and ideas about what the Growth Hub should do and how its features should support businesses in the North East.”

A number of core functions are already available on the Beta North East Growth Hub including a comprehensive business-to-business events database and relevant business news showing the breadth of what’s happening in the North East business community.

Information on the range of business support and finance advice available in the North East LEP area, including national, local, public and private support, is currently being built into the platform.

Anyone interested in taking part in the Beta testing phase of the North East Growth Hub can

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sign up via www.northeastgrowthhub.co.uk/ register-your-interest.

The North East LEP will be attending a number of business events, exhibitions and conferences in the coming weeks and months to showcase the new platform.

For more information on the North East Growth Deal visit www.nelep.co.uk, email info@nelep.co.uk or follow @northeastlep

BUSINESS QUARTER | SUMMER 15

INTERVIEW

SUMMER 15

FACE-TIME GIVES US THE EDGE

SPECIAL REPORT | SUMMER 15

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SME BREAKTHROUGH

SUMMER 15

INTERVIEW

Santander’s Mark Farrington says the bank is supporting business in the North East and challenging established players Regional director Mark Farrington is one of a team of 40 customer facing Santander staff in the North East.

These are split between relationship directors who manage the customer portfolios and relationship managers who support customers’ needs day-to-day. There are also product specialists, covering the bank’s products in areas such as from ABL (asset based lending) specialists, invoice asset finance, international, and TBL (transactional banking liquidity).

Alongside these are business development specialists who work with a network of professionals and other KBIs (key business introducers) to build Santander’s presence and brand in the region.

Santander supports businesses looking for a relationship managed service or requiring more comprehensive banking, international or larger lending needs.There are further specialists for sectors such as education, health, renewable energy and real estate.

There’s a growing demand for all these services with Santander seeing a year-on-year growth of about 22% in business lending in the North East and last year it attracted more than 200 commercial customers who moved their bank to Santander.

Farrington puts this down to a number of reasons. He adds: “We’ve brought in a lot of people who don’t really have a big portfolio of customers, so we’re able to offer a much more one-to-one relationship with customers which gives us that competitive advantage in that

SME BREAKTHROUGH

you’ll get more face-time with your bank manager.

“I think we’re offering something different as well.’’

He explains that clients recommend Santander to their contacts, suppliers and customers.

“We do see business come in that way which is great testimony to us. The other thing that demonstrates this is the many great customer satisfaction surveys I read, we get a lot of really great feedback from our customers.”

The Breakthrough Box festival brought many of Santander’s products and services together with, for example, Breakthrough Talent allowing businesses to part-fund interns.

“We also work with Newcastle University” he says. “They’ve placed all of their original allocation of interns. We do that to support our customers but also to support the region and businesses in the region to build good will. He also points to the support Santander gives to exporters.

“We’ve taken two North East businesses

We get a lot of really good feedback in the customer satisfaction surveys

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on subsidised trade missions in the last six months, one to the US and another to Spain, and we’ll be taking more over the course of this year and next, with upcoming trade missions. We also do international focus events, such as in Cumbria next week where we’ve got an international dinner.

“At these events we use our own professionals but we also bring in others such as accountants or lawyers, who are experts in trading abroad, for prospective customers and existing customers to understand how they might go and export or how they might set up abroad.

“It’s really just idea sharing – there are some experienced businesses in the room as well as some very young businesses and collectively they can learn from each other.’’

Farrington says: “Santander is focused on growing our business by helping our customer’s businesses do just that.” This is a challenge Farrington relishes.

He says: “The best thing about my role is going out and meeting clients and hearing about their business and trying to offer a solution or service to them, whether that be a solution that Santander can provide, an introduction we can make or using one of our partners or accountants or whoever to help that business succeed. The best part of our job is going back to a business six months on and seeing what great work they’ve done with that. n

SPECIAL REPORT | SUMMER 15

OVERVIEW

SUMMER 15

PETROLEUM MAKES POUNDS FOR PENNY David Penny has built a successful business in a difficult industry by being quirky, as Peter Jackson reports

SPECIAL REPORT | SUMMER 15

It would have seemed unlikely 20 years ago that David Penny’s life was going to turn into a success story.

He was recently married, unemployed and, having spent four years travelling the world, his CV was – as he puts it – “completely shot’’.

“I had nothing,’’ he recalls. “I had no job and I wondered what the hell I was going to do.’’

He cheerfully admits that didn’t he do well at school and got poor A-Level grades before going to Liverpool Polytechnic in the late 1970s to do a business degree.

His degree was a sandwich course and he

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spent a year working for oil giant BP. “I don’t know why, I had absolutely no idea what I was going to do,’’ he says. “But that was really the initial breakthrough moment for me.’’

He impressed the company sufficiently for it to offer him a job upon completion of his degree.

“I loved it. I was training to go on the road and it was the ideal job for me. I loved working with petrol stations and doing deals, it was really fascinating,’’ he says.

Initially he worked in Buckinghamshire and was then moved to the North East, which >>

SUMMER 15

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OVERVIEW

SPECIAL REPORT | SUMMER 15

OVERVIEW

SUMMER 15

began his love affair with the region.

“Everything about the North East was just fantastic,’’ he says. “I fell in love with it and fell in love with the people.’’

But then BP moved him back to London as car wash UK manager, aged just 25.

His youthful success, however, provoked jealousy and resentment and the office politics wore him down.

“I decided to hand my notice in after about nine months.’’

He returned to the North East to join a filling station business which had about six sites around the region. He stayed with the business for about two years before giving it up to begin his travels.

He backpacked through various countries and did a leadership training course in the Canadian Rockies.

“It taught me a lot. It taught me when to stop and turn around because the mountain’s bigger than you are and the mountain will always be there,’’ he says.

But, when he returned and got married, he had no job where he could put into practice the lessons he had learned.

He did, however, still have a house and some savings which enabled him to raise enough capital to buy Hedgeley Service Station on the A697, near Powburn in Northumberland. The site included a petrol station, a caravan park, café, workshop and a car showroom.

During their first hard winter, Penny was afraid he might have made a terrible mistake.

“I had a bit of money to buy the place, but the trouble was keeping the thing going,’’ he says.

“I went in July in the peak season but then you hit the winter in North Northumberland and it was a desperate winter and the road was blocked. I had no money coming in and had to cash all my savings just to keep afloat.

I had to get through that first year.’’

This taught him that he could not rely only on seasonal trade.

“I had to get some core cash flow business going,’’ he says.

He also realised that he couldn’t rely on petrol sales alone but had to also make full use of all the other facilities on the site. He got an

SPECIAL REPORT | SUMMER 15

We have a clear idea of where we are going,’’ he says. “We are very enthusiastic and incredibly passionate.

Passion, drive, enthusiasm and never say die – that’s behind our success

off-licence for the shop and an on licence for the car showroom which he converted into a live music venue. Soon it was attracting coachloads of people from as far afield as Glasgow and even Poland.

“It taught me that this was the way to drive these businesses forward, petrol retailing on its own is very difficult,’’ he says.

He points out that in 1994, when he bought Hedgeley, there were 21,000 petrol stations in the UK and now there are just 8,000.

When he started the business, annual turnover was £1m and he employed 10 staff.

Now Penny Petroleum has 28 sites, supplied by five different oil companies – including his old employer BP – it employs 250 staff and has an annual turnover of £100m and it is the UK’s seventh largest independent petrol retailer.

The secret has been to ensure that the sites provide a number of different services apart from petrol, provided by Penny Petroleum or tenants.

At Hedgeley there are now an antiques shop and tea room, shop and caravan park.

“It’s a fun business and it’s multi-dimensional,’’ says Penny. “Bolting all these other things on is what drives people to come to the place. I realised that the business model I needed to get into was to have sites that had alternate uses on them as well.’’

At Morpeth, for example, apart from the petrol station, there’s an arts and crafts centre, a tea room, a country store and a veterinary practice. Other sites include a sound recording studio, a training company, florists and artists.

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“There’s a quirkiness and I think that sets us apart from a lot of people in our industry,’’ he says. He says he tends to acquire sites that are run down and have been denied investment and have run out of ideas and enthusiasm. Growth has been impressive but not seamless and Penny admits to having made mistakes along the way. A site in Tow Law in County Durham was a failure as was another in Scotland and there was also an illfated partnership for a few sites.

“That partnership was probably the worst thing I ever did,’’ says Penny. “The phrase `partners are for dancing with’ is true. The best meetings are the meetings between two people when one sends their apologies.’’

He adds: “I’ve made some mistakes, you have to. You have to know what mistakes you’ve made and then you’ve got to be able to ride them out.’’

The business has introduced the Penny Black branding but the business is not uniform, it has different styles of site to suit different demographics. Last year saw seven store developments and investment of about £700,000. He has ambitious plans for the business, wanting to grow it to 50 sites and £200m annual turnover within four years. He is confident that this will be eminently possible.

“We have a clear idea of where we are going,’’ he says. “We are very enthusiastic and incredibly passionate. Passion, drive, enthusiasm and never say die – that’s behind our success.’’ n

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SPECIAL REPORT | SUMMER 15

INTERVIEW

SUMMER 15

Santander’s regional director international is Simon Dunn. He explains to Peter Jackson what the bank can provide for those seeking to break into international markets

OPENING UP A WORLD OF OPPORTUNITIES SPECIAL REPORT | SUMMER 15

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SME BREAKTHROUGH

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WHAT SERVICES DOES SANTANDER PROVIDE FOR PEOPLE WHO WANT TO SELL OVERSEAS? We do a variety of things. Santander operates its own trade missions, taking SMEs to various parts of the globe so they can have a first taste experience of going into an international market. Already this year we’ve got a client from Newcastle who’s in Spain at the moment. That service is for any SME, it doesn’t have to be a Santander customer to go on a Trade Mission. Typically a mission would last a week. It’s a tailored programme of meetings, networking events and seminars, to advise the SME about the target market, and build up contacts and develop their business.

We do about half a dozen a year. They’re very small events, so there might only be about a dozen or so people go on each one but there’s been about six or seven from across the North East in the last couple of years. It’s on an application basis.

WHAT WOULD IT TYPICALLY COST? It’s heavily subsidised by Santander. For long haul trade missions it’s £1,500 and for short haul it’s £1,000.

PRESUMABLY, AS AN INTERNATIONAL BANK SANTANDER HAS NETWORKS ALL OVER WORLD? The Trade Missions go to markets that are classed as high growth potentials. So we go to major trading countries around the world, including those where Santander has a branch network, but, for countries where we don’t, we have a network of alliances with global partners. So for instance, in the UAE, we use a bank called Abu Dhabi Commercial Bank, in India we use ICICI. So, it’s where we’ve got strength or where our partner or alliance has got strength. Santander has over 12,900 branches across the globe and five million business customers worldwide. And we have alliances with other banking partners, so in areas where we don’t have coverage, we have access to local market knowledge through our alliances with other banking partners across the globe.

SME BREAKTHROUGH

WHAT’S THE TRADE CLUB? Imagine Linkedin meets eHarmony. Santander has five million business clients across the group. A Santander customer can create their own profile on the Trade Club. Its aim is to bring clients together, so they can network.

If you wanted to export, you could go on the Trade Club and find a distributor or importer of your product, or a transportation company.

It’s there to establish import and export links and customers can share ideas, pitch projects, and go for joint ventures. It’s an online community of like-minded entrepreneurs and businesses.

The Trade Club also has training and virtual trade missions. So even if you didn’t want to go on an actual trade mission you could go on a virtual trade mission to find out what it would be like, who you’d be meeting. It’s a try before you buy. We also have the Santander Trade Portal, which won the Innovation in the SME Finance Sector award and contributes to the bank’s Best International Solutions Provider title from Business Moneyfacts.

The Santander Trade Portal is an online resource. It can identify the right markets with the highest demand for a company’s products and find potential business partners, with access to a wealth of potential knowledge. In terms of information, it has trade information for 171 countries, it has access over 200,000 potential clients, it has over a million public and private tenders, and over 40,000 trade shows globally.

WHAT IS SANTANDER PASSPORT? If a business is going overseas, we recognise it’s quite daunting and it’s quite a challenge to understand cultural and language barriers.

INTERVIEW

So we make the process seamless for them and we aim to take all the pain out of it.

In countries where Santander operates, we provide all the support from the UK to open up accounts, share credit papers and make it as easy as it can be. For global expansion we take all the pain out of opening overseas offices and bank accounts. It just makes it a simplified process. If a company had any subsidiaries overseas Santander Passport supports all of those. It is supported through our multilingual international desk network in every country where we operate. It removes any cultural or language barriers, offering support in whichever country you want. Santander also provides all the usual financial support and products and services for international businesses whether they’re foreign exchange, letters of credit, guarantees, or document collections.

HOW DOES EXPORTING HELP AN SME? Santander has just signed a partnership with UKTI, so we’re both looking to help businesses grow. We recognise that internationally trading businesses are far more diverse and they can weather the economic storms better because it allows them to have alternative markets and, if they’ve got a seasonal product, it allows them to sell in different seasons in different parts of the globe. From the company’s point of view, international trade is also exciting because you’re going into new markets and new countries. We can guide you through that process, we can help support and develop you to build your business to be able to ensure you’ve got stability going forward by having a wide and varied customer portfolio. n

The trade missions are what are classed as high growth potentials.

So we go to major trading countries around the world

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SUMMER 15

FROM PUNK ROCKER TO FASHION GURU Steve Cochrane refused to listen to the sceptics and stubbornly followed his own instincts to build a successful business which he plans to take worldwide, as Peter Jackson reports Steve Cochrane was so determined he wasn’t going to let burglars damage his business, he spent a tense night in his Middlesbrough designer department store Psyche ready to defend it.

He recalls: “In September 2009 we got burgled five times in about 10 days. We boarded up the windows and they came back, ripped all the boarding down, and burgled us again. I ended up staying the rest of the night with a baseball bat in case they came back – fortunately for me they didn’t.’’

His business career has been characterised by a determination not to be beaten and to refuse to allow himself to be discouraged.

Born and bred in Middlesbrough, he had gone

to university to read engineering but, finding that boring, gave it up to form a punk band Sliced Tomatoes. They were exciting times and once he even put Boy George up for the night. Part of his role was to design the clothes the band wore and which girlfriends made for them.

So was born the idea for his future career – in clothing retail.

He says: “The band weren’t very good and I liked the clothes better than the music and a clothes shop seemed a great way to get fixed up with girls.’’

Straightaway he came up against opposition.

“When I first approached my bank, they, with my mum and dad, spent ages trying to talk me

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OVERVIEW

out of it. I was 23 and they were saying, why don’t you buy yourself a nice car instead? The more they didn’t want me to do it, the more I wanted to do it and prove them wrong.’’

It was a bold move.

“It’s scary setting up a business if nobody in your family has ever done it and that was the case with me. You’ve got to either know people who have got businesses or have a friendly bank who are going to give you that advice and point you in the right direction.’’

However, Cochrane was not deterred and in 1982 opened his first clothes shop – also called Sliced Tomatoes – in Redcar. He knew next to nothing about the trade but, as he says, “made it up as we went along’’, getting girlfriends to make clothes, customising garments, tie-dying or bleaching them and generally satisfying the New Romantic fashion demand.

He built up the business and, in 1984, opened Psyche in Middlesbrough in a 1,000 sq ft outlet. He continued to grow a solid business and a loyal customer base, buying another 3,500 sq ft store when it came onto the market, but his breakthrough moment came in 2001 when the landmark Uptons department store in Linthorpe Road closed.

Cochrane’s reaction was to see an opportunity.

He says: “I thought my God, the whole area’s going to go down. Is there any way I could buy this store?’’

He explored the possibilities and went to see the bank. He bought the building but he had to sell his house, car and his two other Psyche sites and he had to sell a business in York – shoeshop.com. >>

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OVERVIEW

SUMMER 15

He says: “It was like starting again and putting it on black to win. Going from two boutiques to a department store was a big shock to the system and I wasn’t sure it was going to work.

I became obsessed with it – that that was what I was going to do. Come hell or high water, I was going to make it work.’’

He embarked on extensive and thorough research into what makes the best department stores. He travelled the world looking at department stores, going to South America, Japan, the US and Singapore.

The result is a retail store with a national reputation. Psyche has twice won the National Retailer of the Year award, beating Selfridges.

It now employs 75 staff and turns over £6.5m and stocks 160 designer brands. Cochrane – the former punk rocker – is a highly respected business figure and has been made a Doctor of Business Administration by the University of Teesside.

He says that the secret of Psyche’s success has been in keeping the store constantly developing and exciting its customers. The upper floors house a joinery workshop which is constantly engaged in refitting some area of the store.

“The idea I came up with was that it was going to be a constantly evolving concept store,’’ he says. “It’s always refreshed, it’s always new, which allows us to create that retail theatre, that drama and excitement. I want people to walk in and be stimulated and feel that it’s an exciting place to be in.’’

Not that he hasn’t had problems along the way – apart from the burglaries.

“I project-managed the shop-fit, which I shouldn’t have done. We ended up having the carpets fitted when the ceilings were being sprayed. I made mistakes but you get over it and move on.’’

At one time Psyche sold its own label clothes, which Cochrane particularly enjoyed but, in the long run, it proved to be more trouble than it was worth to the business.

He says: “It was easy selling it to people and taking orders, the hardest bit is getting paid.

We were selling loads of gear and I spent all my time chasing people up to pay me. I’m funding their businesses and helping their cash flow and hurting mine. In the end I just decided to call it quits on our own label.’’

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I became obsessed with it. Come hell or high water, I was going to make it work But he hopes to expand Psyche and open more stores – probably with the first in Leeds – when it would be economical to return to own label for a critical mass of Psyche outlets.

But, before that, he wants a thriving ecommerce business and to establish Psyche as an international web store. But here there are a number of problems still to iron out, with high direct costs in advertising, affiliates, payper-click, transport, packaging and returns.

He employs 14 people working on the Psyche website, with every garment needing five photos and an in depth description which has to be written to maximise search engine optimisation.

“It’s a minefield,’’ he says. “The big guys are all really switched on to ecommerce so there’s a lot of competition, so if you’re not on the first couple of pages of Google you’re nowhere.

It’s really difficult to be on page one for all

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your brands. “It’s very difficult to make money online because of the direct costs associated with each sale,’’ he says. “The people who make a lot of money are Google.’’ Currently, it is running at about £1.5m a year and Cochrane believes that to achieve break even he needs to reach £2.25m. But, he is working with UKTI to expand in overseas markets and he is planning a trip to China with them.

Characteristically, he says: “I’m really determined to make ecommerce work.’’

What would be his advice to someone starting out in business?

“Find something you really love but research it like crazy,’’ he says. “You’ve got to do a lot of research and comparisons. Who’s out there doing what you’re doing? Look at similar markets and pick up ideas from them. You need to be benchmarking yourself against whatever is out there.

“There are three things in a business and everything else is fluff. It’s customers, each other and the product that you sell. Those are the three cornerstones to any business.’’

And if you want to expand a business?

“Get it honed to perfection locally first and then expand from a stable, secure base and a position of strength. You need to be an expert in what you do, know it inside out and back to front and then gradually grow it.’’ n

THE UK’S INTELLECTUAL PROPERTY LEAGUE

IP 10 0

THE IP100 - RECOGNISING THE VALUE OF IP IN YOUR BUSINESS BQ Magazine is delighted to announce the launch of the Intellectual Property (IP) League Table and the IP100, compiled in association with Metis Partners, an award-winning IP solutions firm The IP League Table will profile and rank innovative companies within the UK’s private sector, highlighting those businesses which have significantly invested in their IP in the form of IP creation, IP management policies, R&D activities and IP commercialisation. The top-scoring companies will be published in the IP100, an annual ranking of companies that are considered to be the most effective at commercialising their IP assets. The ranking process involves an assessment of IP-specific data linked to the following IP asset classes: brands, software, patents, trade secrets and critical databases. A proprietary scorecard will be applied to calculate an IP score, and the IP100 team will rank companies based on the results.

The IP League Table will give companies the platform to get recognition for the value of their IP, whether using IP to: • Boost the exit valuation of a business • Improve access to new markets • Protect existing market share • Create new barriers to entry IP also has the ability to play an important role in transforming funding options available to businesses. The IP League Table will enable companies to showcase their investment in intellectual property and potentially leverage the associated value to raise finance and restructure debt. The IP League Table is open to all UK companies and is FREE TO ENTER.

ENTER THE IP100 NOW The IP100 is open to all UK companies to enter and details about the process ,as well as the information

Enter now at www.bqlive.co.uk/IP100

required, can be found at www.bqlive.co.uk/IP100

INTERVIEW

SUMMER 15

PILLARS OF WISDOM THAT GUIDE SMEs Santander’s Breakthrough programme to help take businesses to the next level has five pillars, as relationship director Vanessa Collins explains Santander is a challenger bank, one of those to come onto the UK banking scene to compete with the mighty handful which had dominated the sector for so long.

Relationship director Vanessa Collins explains that in doing do, Santander is making a different offer.

She says: “There are a number of ways in which we differentiate ourselves from other high street banks, specifically in the way in which we finance working capital requirements, in how we support businesses looking to grow internationally and also in how we add significant value to SME sized businesses.

“Key to this differentiation is the Breakthrough programme, which is built around five pillars covering the areas ambitious businesses need to succeed: Breakthrough Finance; Breakthrough Talent; Breakthrough Knowledge; Breakthrough Connections; and Breakthrough International.’’

Breakthrough Finance is about providing the growth capital for established businesses to grow faster and to create jobs.

This includes Breakthrough Growth Capital, a flexible form of financing for businesses without them having to give away control or significant equity. It can fund investments in new people, or sales and marketing initiatives, research and development plans, or strategic acquisitions.

Collins says: “We basically have £200m worth of growth capital loans that are available

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and part of that is we’re also making £100m available to SME house builders.’’

The growth capital investments are a combination of senior and mezzanine debt finance, which are structured in such a way as to minimise the impact on an SME’s cash flow.

They are typically loans from about £500,000 to £5m and they can also sit alongside senior debt facilities.

They can be structured so that they are interest only for part of the agreement and then capital is repaid at the end of it through a traditional bank loan. All lending is subject to eligibility and lending criteria.

Breakthrough Talent offers funding for up to 2,000 internships each year, giving SME businesses the opportunity to have a newly qualified graduate or student work with the business for three months, with Santander contributing 50% of the cost of the intern.

“During the last year, 59% of the interns placed continued to work for the SME after the internship finished, meaning 885 people gained employment with an SME as a result of this scheme,’’ says Collins.

Breakthrough Knowledge includes regular masterclasses to give SME businesses leaders the opportunity to learn from some of the UK’s market leading companies, such as Google, Saatchi & Saatchi and Innocent Drinks.

In June we took 14 business leaders to spend the day at McLaren,’’ she says. “You don’t have to be a Santander customer to join one of the masterclasses, although we do find that

20

a large proportion of the attendees become a customer after the experience.’’

Also part of Breakthrough Knowledge workshops are classroom-based half day sessions, with a specialist speaker, focusing on areas such as sales leadership, HR and employment law. Breakthrough Connections provides round table events, bringing together local businesses for discussion and debate around sector, regional and financial issues.

This is also open to non-Santander customers.

Breakthrough International supports international trade. Over the coming months Santander will send delegations of ambitious business owners to the US, Mexico and Poland, with most of the cost being met

by Santander. These missions include a programme of meetings set up to help attendees get the most out of the experience.

She says: “We also have the benefit of our Trade Portal, an online solution enabling companies interested in exporting to identify the most lucrative opportunities and identify trade partners that could help them open up markets in other parts of the world.’’ n

Santander Trade Portal is provided and managed by Export Enterprises S.A. Santander provides access to its corporate and business customers but is totally unrelated to the database contents, which are the responsibility of Export Enterprises S.A.

SME BREAKTHROUGH

SME BREAKTHROUGH

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OVERVIEW

SUMMER 15

Our ultimate aim is to become a kind of one-stop-shop on variable costs for businesses

SPECIAL REPORT | SUMMER 15

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SAVING TIME AND MONEY FOR CLIENTS Bradley Groves’ business is poised for dramatic growth, thanks to a loan from Santander’s Breakthrough Growth Capital, as we report County Durham based Great Annual Savings Group is expanding its UK-wide business with the help of a `multi-million pound’ Santander Breakthrough Growth Capital loan.

This has enabled the business to move into its new Seaham HQ, fit it out, install new IT and take on new people, ready for the next phase of its growth which it forecasts will treble the size of the business next year.

Great Annual Savings makes savings for businesses on their variable costs such as energy, water, telecoms and insurance, by buying in bulk and getting better deals.

Chief executive Bradley Groves explains.

“We have direct relationships with all the major suppliers and we procure from a lot of the big suppliers and because of our volumes and scales we can get a better price than one company going direct to them.

“Our ultimate aim is to become a kind of one-stop-shop on variable costs for businesses, so instead of them having to separately buy electricity and gas and then having to do the water and then the telecoms, then the mobile and the broadband and the insurance, we aim to procure all those three areas for them.’’

The company does not charge the businesses;

its margin comes from the suppliers.

“So the service that we offer is free to the businesses, and ultimately our aim is to save them money,’’ says Groves.

He says the service also saves businesses considerable time by relieving them of the burden of having to negotiate every few years with multiple suppliers. Instead, a Great Annual Savings business solutions manager will look after all their accounts.

Other services include software to manage and reduce energy and water consumption and carbon emissions.

Great Annual Savings will negotiate for the client through the labyrinth of fixed and variable prices and a bewildering array of different products. The variety of savings means that potential savings can vary enormously and Groves puts it in the range of anywhere from 5% to 80%.

The company works with any size of business.

“We’ve got businesses from one shop or one small office, up to major industrial and major retail clients and we work all across the UK in all shapes and sizes,’’ he says.

His background was in retail, originally with Blacks Leisure Group, then with Phones 4

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OVERVIEW

U and in private equity helping restructure businesses and management teams. This gave him invaluable experience in making savings on variable costs.

Six years ago he saw the opening and in July 2012 launched the business.

He says: “I really thought that there was an opportunity business-to-business where if we could put a model together where we could get scale with energy, telecommunications and insurance and we could bundle it all together. I felt there was a big opportunity in that space.’’

Originally the business was based in South Shields but, with the Santander investment, has moved to the Spectrum Business Park in Seaham where it has 46 staff.

It plans to take on about another 100 people in the next 12 months.

Groves says: “For the first three years we’ve doubled our business every year and we’re looking to treble our business next year.’’

Apart from investment in property and IT and increased head count, the business has a new senior team with a new head of finance, head of IT and head of HR. How was Santander to work with?

“Very good. We wanted to get cash to bring people in but we didn’t want to give equity away so we didn’t want to work with anyone in private equity. We funded the business ourselves for the first two and a half years and the plan was to carry on doing that. It would have meant we wouldn’t have employed the same amount of people and probably wouldn’t have got the IT infrastructure and probably not the building, if it hadn’t been for Santander. We might have had double the growth but we definitely wouldn’t have had the level of growth without their support.

“As it was, we did a deal in nine weeks. I found them exceptionally pragmatic, very sensible – they used common sense and got to understand the business.’’ n Lending is subject to status and lending criteria.

SPECIAL REPORT | SUMMER 15

INSIGHT

SUMMER 15

INSIDE THE RED BOX Young would-be entrepreneurs found inspiration and invaluable business advice at the Santander-backed Breakthrough Box festival in Newcastle-Gateshead

SPECIAL REPORT | SUMMER 15

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SME BREAKTHROUGH

SME BREAKTHROUGH

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INTERVIEW

SUMMER 15

MEDIUM-SIZED FIRMS HAVE HUGE POTENTIAL It’s not only start-up SMEs that need help to grow, Yvonne Gale, chief executive of NEL Fund Managers tells Peter Jackson

Yvonne Gale points out that it may be hard to imagine, but once the present titans of the business world were start-ups struggling to find a foothold on the ladder.

She says: “It might feel as if the likes of Apple or McDonald’s, or closer to home, Nissan or Sage have been around in their current form forever, but they too were started by entrepreneurs who had what they thought were good ideas and business plans in place, but who didn’t have any guarantee that they were going to be able to turn into any kind of commercial success, let alone everything they’ve respectively achieved.’’

Gale points out that small businesses need a wide range of things to go right as they begin to fulfil their potential and expand, including the right products or services, a robust infrastructure through which these can be delivered, a strong customer base to buy them and – she adds – “Our particular area of interest, a reliable and fluid flow of capital to help keep things ticking along.’’

Start-ups, especially those in the technology industries, tend to get a lot of both the limelight and associated funding but, important as these businesses are, they are not the whole picture Gale argues.

She says: “More than a quarter of a century’s commercial investment experience would tend to suggest to us that it’s actually companies that are a little more firmly established that are the ones most likely to make a bigger impact on the health of the economy.

“The continent’s economic powerhouse, Germany, is famous for its ‘Mittelstand’ –

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the medium-sized, usually family-owned businesses, that are seen as the backbone of its economy.

“These firms represent 3.1% of all businesses in Germany – compared to 0.6% in the UK – but more importantly, they produce 43 times more Gross Value Added (GVA) per company than micro businesses.’’

Gale believes these figures suggest that there is invaluable economic impact to be gained by putting resources into businesses that have already proven their worth by surviving and prospering over many years, rather than just those that are at the start of their journeys.

This, she says, is where NEL’s regional business investment work is important.

Over the past five years, NEL Fund Managers

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has been responsible for investing in the Finance for Business North East Growth Fund, a general investment fund aimed at businesses at a development and growth stage, based anywhere in the North East and part of the overall £142m Finance for Business North East initiative that is managed by North East Finance. Its brief for this fund has been to find ambitious companies with strong management teams and robust business plans, and to provide the capital required to put these plans into action.

Since the fund launched in early 2010, NEL has made more than 100 Growth Fund investments with an average deal value of approximately £210,000.

She says: “It’s a real testament to the ambition of North East businesses that we managed to fully invest both the £20m that originally made up this fund and the additional £3m with which it was topped up in 2013.

“In addition to this, our analysis shows that a further £11m of private capital was attracted into regional businesses as a result of the Growth Fund investments we made.’’

The businesses invested in have come from across the region and have included energy efficient lighting business Amitex and law firm Clifford James Consultants in Northumberland, flavoured coffee firm Beanies The Flavour Co and training company Group Horizon, which have both invested in expansion on Teesside with support from the Growth Fund.

“While we’ve had something of a leaning towards traditional manufacturing and engineering industries, the scope of both our

SUMMER 15

The continent’s economic powerhouse, Germany, is famous for its ‘Mittelstand’ – the medium-sized, usually familyowned businesses, that are seen as the backbone of its economy

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INTERVIEW

investee portfolio and the products they create covers a huge range of areas,’’ says Gale.

“Bespoke furniture made in Team Valley is now on sale in both Harrods and London’s Sloane Square as a result of the investments we’ve made in The Original Sofa Co., while biometrics company IEvo, which designs and develops devices which use individuals’ fingerprints to manage access to controlled environments, is now expanding the range and size of contracts it can take on thanks to the development capital we’ve provided.’’

In more traditional business, steel mould manufacturer Rotational Engineering has created jobs and won new domestic and international contracts, while County Durham cable manufacturer ATAG Cable Solutions is now working towards doubling both its turnover and workforce – both with NEL’s support.

Gale points out: “All of these diverse businesses have two key factors in common – a recognition of the impact that access to finance could have on their operations and the capacity to put together a case, often, but not always, with the support of the excellent North East professional services community, for bringing that money through their doors.’’

She says it is particularly important to note that 22 North East businesses have secured second or even third Growth Fund investments from NEL after they first helped them successfully implement business development plans.

She points to the availability of a ‘funding escalator,’ which allows vibrant North East companies to gain ongoing access to capital investment as they grow and their needs change, as being crucial to both their individual success and the wider regional economy.

For example, hazardous area inspection firm Cenelec Standards Inspections worked with NEL in 2012 to secure a £275,000 Growth Fund investment, which helped it manage sustained growth in markets around the world while also developing a high quality training centre in Northumberland as an additional service.

Since then, its workforce has increased by around a third to 90 people, with a significant number based in the North East, and it >>

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INTERVIEW

SUMMER 15

was operating in 38 different countries by the end of 2013, a figure it is looking to grow further with the help of a second Growth Fund investment worth £300,000 that it took on late last year.

Another follow-on investment success story is specialist North East construction firm Aartoft, the UK’s only producer of lightweight concrete pre-fabricated bathrooms, with the first phase of this Lynemouth-based firm’s development plans being backed by a £300,000 Growth Fund investment in 2013.

Since then, after diversifying into producing lightweight steel frame bathroom pods that are commonly used in UK construction, it has used a second investment of £200,000 to increase its focus on the domestic market, and support the recruitment of both a new company director and two new apprentices.

Niels Sandahl, Aartoft’s founder, says: “The cost, efficiency and quality benefits that our products and way of working offer have quickly become clear to our growing customer base, and we’re beginning to realise the huge

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Judging by the high numbers of enquiries that keep coming through the door and the quality of the business plans that follow them, we’re set to achieve this objective potential that we believe our products have in the UK. “Our relationship with NEL has worked very well, and it was a natural choice for us to approach them for a second round of funding, which we’re extremely pleased to have secured.”

Gale says that the returns on these Growth Fund investments will add significantly to the planned JEREMIE 2 funds which are due to come on-stream at the beginning of 2016, and which will maintain the flow of

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indigenous development capital available to North East businesses. But, before this kicks in, NEL has around £3m available to invest during 2015 in ambitious regional businesses.

She says: “Judging by the high numbers of enquiries that keep coming through the door and the quality of the business plans that follow them, we’re set to achieve this objective, and would encourage any firms thinking about going down the investment capital route to talk to us about their plans sooner rather than later.’’ n

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OVERVIEW

THE SIGNS ARE NOW LOOKING GOOD Paul Walker of Symbol Signs has formed a relationship with Santander and is now looking to fulfil his dreams

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Paul Walker’s pivotal business moment came this spring when he bought out his partner in Middlesbrough-based Symbol Signs.

But first he had to find the funding, which is when he turned to Santander.

He says: “Santander helped me with that whole process. They helped me to look at how we were going to secure the funding to do the purchase. We went to market and >>

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OVERVIEW

SUMMER 15

Santander came back with a fantastic offer and we went with them to fund the purchase and never looked back.’’

The company makes signage and most of its business is in digital and screen print. Digital work includes features wrapped around buses and vans and screen print is high volume, industrial type signage and print. It serves customers from across the UK. Symbol Signs employs 11 people and has an annual turnover of between £900,000 and £1m.

The business was founded by Paul Walker’s father Geoff in 1982 to supply the local chemical industry with various safety labels and hazard warning signs.

“I started working here when I was eight and then went away and did my education and came back 20 years ago and I’ve stayed ever since,’’ says Paul.

Geoff Walker retired two years ago, leaving Paul and the partner whom he bought out this year. The business has grown steadily over the years.

He says: “We’ve actually been fairly steady because of the nature of the businesses that we support. We’ve also diversified into different production methods. Some areas have gone quiet while others have stayed relatively busy.’’

However, the business did hit a tough patch about three years ago.

“That was probably our most obvious dip, and it wasn’t necessarily in sales, it was mainly in profit,’’ says Walker. “We’d obviously stayed busy enough but there were no margins in what we were producing, but, fingers crossed and touch wood, we’ve ridden that storm and stuck to our guns. “We didn’t start getting into price wars and we didn’t lose anyone.

We were loyal to our staff – no one had to go at that point and we started a huge recovery the next year which had a massive effect. Our profits went up hugely just by focusing on our internal production and being more efficient and not having that comfort of working where we used to work because we had to change everything internally to suit new ways.’’

Having come through that, putting the business on an even keel and having bought out his partner, Walker now has big ambitions for the business.

He says: “My plans are pretty simple really. I’ve

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My plans are pretty simple. I’ve had the frustrations of seeing where we could have been over the past 20 years – now it’s a question of putting that into practice had the frustrations of seeing where we could have been over the past 20 years and now it’s a question of putting all that into practice.

“We’ve got a very clear goal at the moment in terms of growth – we want to grow by 30% in the first year. Currently, we’ve got good margins but I think we could certainly grow by 30% with the right sales and we could grow our bottom line by 5%, there’s easily margin for that.

“Then, we’ll re-address things at the end of year one, see where we are and continue that growth and take it to another level by investing in new kit.’’

Since the buy-out, the business has already taken on two new staff: one at management and one at apprenticeship level.

Walker adds: “The potential’s there. We’ve already targeted customers in London and we’ve already won some work down there so we’ve focused on our target market now, so

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rather than being reactive we’re being a bit more proactive and it’s paying off.’’

And the relationship with Santander will continue. “We’ve moved all of our banking over to them from our old bank since moving to Santander they’ve just been absolutely fantastic, so proactive, not only with helping with the purchase, but since. They’re just constantly in contact, with suggestions and ideas or introducing me to people that we can produce for or help with. We have a very personal bank manager, he’s great.

“With the help of Santander I can now make my dream a reality and take my business to the next level, which is where we need to be.

There’s still quite a lot of people who don’t know the size of us and our capabilities and it’s time to shout about ourselves and add some growth.’’ n Lending is subject to status and lending criteria.

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COMPANY PROFILE

Don’t wait until it’s too late Would you wait until the day the builders arrived before asking an architect what your new home is going to look like?

How about ordering some expensive new equipment before seeing whether the bank will lend you the money?

The value of getting professional advice and informed counsel at an early stage is easy to see in such examples – and the same is true when it comes to legal services.

Talking to an experienced lawyer at the outset of your project, development or new venture can add real value as well as paying dividends in both time and money saved.

By using Ward Hadaway’s experts as strategic business advisers before taking the plunge, you get an informed view at an early stage from

people with a vast range of experience in myriad different areas.

What they deliver is far more than “the paperwork” - its lawyers can help guide and shape your business and provide a positive input to its success.

This approach is just as valuable for the small business or start-up as it can be for the established company or multi-national concern, because getting it right from the start is crucially important whatever your size or ambitions.

Talking to Ward Hadaway’s specialists will also not become a lecture on legal niceties. Whilst its knowledge of the law is as comprehensive and up to date as you’d expect from one of the UK’s top 100 law firms, as professionals who work with businesses day in, day out, its experts give advice which comes with the benefit of experience and cuts to the commercial heart of the issue.

Ward Hadaway has worked with thousands of companies of all sizes across the North and nationwide to help them achieve their goals and grow their businesses. The firm is with you all the way, with a focus on building long term, valued business relationships with clients.

From staffing and property issues to commercial contracts, overseas trade to important acquisitions, as a full service law firm Ward Hadaway can help at every stage with any issue.

To find out more, call Colin Hewitt on 0191 204 4226.

Trusted partner to thriving SMEs. UNW is a North East based advisory firm that delivers practical and actionable advice for its clients. We continue to grow on the back of our reputation for being first rate advisers to a range of entrepreneurial businesses.

Our team delivers specialist advice in the following areas: Audit and Assurance, Corporate Finance, Taxation, Accounting Services and Strategic Talent.

As our core capability, experience and expertise is working with SMEs, we understand the changing needs and challenges faced by entrepreneurial businesses as they grow from start-ups to established businesses.

UNW Strategic Talent is a niche advisory practice, supporting the long-term, sustainable growth of aspirational enterprises by helping them establish and develop “backable boards”.

We work with SME stakeholders across the private, public, social enterprise and charity sectors, providing specialist human capital services to support significant and sustainable growth.

For further information, or to discuss your strategic talent requirements, please do not hesitate to contact Peter Neal on 0191 243 6000 or at peterneal@unw.co.uk

INTERVIEW

SUMMER 15

WHY WE KEPT LENDING Growing businesses need working capital. Graeme Harrison, Santander’s regional invoice finance director, explains how the bank can help When recessions end and the dust begins to settle, businesses emerge blinking from their shelters and begin to think about growth again. This is when they need working capital – and an understanding bank.

Graeme Harrison is proud that in the wake of the Lehman Bros crash and the subsequent credit crunch, when other banks were pulling down the shutters and were more likely to call in a loan than grant a new one, Santander kept on lending. And now that businesses need liquidity to take advantage of the opportunities offered by the downturn, Santander is ready to help with working capital requirements.

He says: “We were there for businesses throughout the recession and we are looking to continue business as usual now.

“In asset based lending the market is growing as a whole. General invoice finance in the last 12 months is up by 4% to 5% and we are very much trying to lead the way in making sure we are there and providing funds.’’

Santander has various lending products on offer to help grow businesses and particularly to provide working capital.

Like other banks, Santander provides invoice finance facilities, lending up to 85% of the outstanding value of the debtor’s ledger and this can be done on a rolling basis, providing on-going liquidity to the business. A small fee is applicable for this service.

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There are other products that complement the invoice finance such as supplier payments.

Using supplier payments, a client could negotiate an early payment discount from a supplier and then Santander pays the supplier and offers the original terms to the client, plus 60 days. So, under 30-day credit terms, the client can get an early settlement discount from their supplier at the same time as 90-day credit. An implementation fee is payable, with the only ongoing fee being an interest fee, based upon each time the facility is used.

“We don’t just offer this to the corporate market, but also to the SME market, which we are really focusing on and trying to develop,’’ says Harrison.

Asset based lending is also available – lending money against the value of the asset – and Santander is funding a lot of plant and machinery and other kit by this means at the

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moment. In the year so far Santander in the North East has done 60 asset finance deals.

“Everything we do is bespoke to the client and we don’t do a ticking box exercise,’’ says Harrison, “We sit down with a client and make sure we understand the business and the issues it is having and then tailor a cash flow and working capital facility for them, which could be invoice finance, or supplier payments or asset finance, or they might need some growth capital. What we are good at is combining them, so it could, for example, be invoice finance with some traditional term debt or an overdraft or structured overdraft.

We just make sure that everything we do is right for the customer and is tailored to their business needs. n

All lending is subject to eligibility and lending criteria.

SME BREAKTHROUGH

SUMMER 15

COMPANY PROFILE

UNW helps house builder grow sales to £40m with finance director find FAMILY-RUN house builder Cussins is fuelled to grow its business almost six-fold to £40m in the next four years after business advisers UNW helped find a new face to add to its expanding senior management team Northumberland-based Cussins’ new finance director Richard Lowry, who was introduced by chartered accountants UNW’s unique Strategic Talent division, shares the company ambition to grow turnover from £7m currently to £40m in 2019.

Established in the 1920s, the Alnwick-based fourth generation house builder hopes its growing team of senior management will allow it to expand to building around 250 homes a year and growing its 30-strong workforce “significantly” over the next few years.

Rather than using a traditional recruitment consultant, Cussins, which has a long standing relationship with UNW as a tax and audit client, called on the Newcastle-based firm’s unique new Strategic Talent advisory team, and the firm’s deep understanding of its business, when it needed to further bolster its leadership.

Cussins chief executive Jabin Cussins said: “Cussins is embarking on a significant growth phase which will see the business increase turnover and expand both our on-site and office-based teams significantly over the next few years.

“As a rapidly expanding business it was crucial that we found the right finance director, a team player motivated by a shared desire to grow the business.

“UNW’s energy and enthusiasm proved key, not only in building a high quality short list of candidates but, crucially, in identifying those that they felt would work well with our team and thrive in a fastgrowing business.”

Mr Lowry, whose family owned the historic North East based building contractor J & W Lowry for 150 years, was former commercial finance manager at energy and property development company Banks Group and finance director at Newcastle’s Warmseal Windows.

UNW head of Strategic Talent advisory services Peter Neal said: “We are approaching the end of

Dave Bowman (left) and Peter Neal (right) of UNW’s new Strategic Talent team

quite a remarkable six months since we launched this unique new service line.

“Richard’s appointment is a great example of how UNW is helping both new and long standing clients, who are planning for or delivering growth, to build back-able boards and is providing a more value adding alternative to traditional executive search.

“We wish Cussins every success and look forward to working closely with them as they build their business and workforce exponentially over the next few years.”

UNW took on two former senior managers, with 25 years’ executive search experience within the region between them, from global recruitment specialist Nigel Wright at the beginning of this year to lead the new Strategic Talent team, a unique move in the North-East professional services sector.

Peter Neal and Dave Bowman were brought in to establish the complementary advisory service, helping private and family SMEs, charities and social enterprises, who value expertise and flexibility above scale and process, to plan for and deliver growth.

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As well as Cussins’ new finance director, the team has already facilitated several board appointments including: introducing a managing director to a high profile engineering business after it was bought out; putting a chief finance officer into a multi-site retailer as part of a five-year exit strategy for its owners; placing a commercial director into a growing healthcare service provider and finding a chair and trustees for two regional charities as part of their governance development.

Since it was set up in the 1920s, Cussins has built 55,000 homes spanning a number of generations.

The most high profile of its developments include Gosforth’s Moor Court and Greystoke Park, Whalton Park in Northumberland and Willoughby Park, Alnwick.

It focusses on smaller developments ranging from 12 to 70 homes, with the average being around 40.

Its area of operation is centred on Newcastle and extends from the North York Moors to Alnwick and across to Haydon Bridge. In December 2014 Cussins secured a £5m investment from the Business Growth Fund and a Revolving Credit Facility from Lloyds Bank.

Mr Cussins added: “We are very fortunate to have built up a first class workforce both on and off-site.

All are very much united by their passion for the homes we build, it is essential that this is carried forward as we expand.”

UNW LLP, St James’ Boulevard, Citygate, Newcastle upon Tyne, NE1 4JE. Tel: 0191 243 6000 Fax: 0191 243 60 60 enquiries@unw.co.uk

SPECIAL REPORT | SUMMER 15

INSIGHT

SUMMER 15

PUNCHING ABOVE ITS WEIGHT Sunderland is attracting and nurturing new businesses in new sectors, as we report

SPECIAL REPORT | SUMMER 15

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SUMMER 15

INSIGHT

Sunderland is known for its major industries such as the strong automotive sector led by Nissan alongside thriving contact centres, software, offshore and renewable energies, and subsea engineering sectors.

But the city is also a hotspot for new and expanding enterprises.

Supporting new business in Sunderland and encouraging SMEs to locate in the city is central to Sunderland City Council’s economic development plans. And it’s a policy that seems to be paying off.

In the last decade, the council’s business investment team has attracted 14,500 jobs and £2.5bn of capital investment to the city – more than any other city of its size in the UK. The team also provides ongoing support and advice to firms, from start-up and as they grow. Guidance is available on dayto-day business operations, promotion and marketing, and on long-term strategic planning to assist in growth and job creation.

Providing the right kind of space for new enterprises is an important part of the strategy and three business centres have been purposebuilt by the council in the last 10 years: the Washington Business Centre, which opened last year; Sunderland Software Centre in the city centre, and Evolve at Rainton Bridge, designed for knowledge-based businesses.

All three centres have benefited from European Regional Development Fund (ERDF) support, including more than £3.3m towards the cost of the Washington Business Centre.

Councillor Paul Watson, Leader of >>

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SPECIAL REPORT | SUMMER 15

INSIGHT

SUMMER 15

Sunderland City Council says: “The three centres are all high-quality, purpose-built accommodation primarily for new and growing businesses. They all offer easy-in, easy-out terms and the facilities that growing enterprises need.

“We took strategic and focused decisions about the potential growth sectors for the future and the business centres are part of that long-term commitment to stimulate and develop them. It’s important for creative and hi-tech enterprises to have the right kind of

environment where they can thrive, and our centres provide that.

“It’s a policy that’s working. The Evolve business centre is fully occupied and around 20 new creative, digital and software firms have set up shop at the Sunderland Software Centre, with Washington Business Centre more than 20% occupied within a few months of opening.”

Sunderland is, of course, a key automotive hub, with Nissan and its suppliers playing a huge role in the city’s economy. The growth

Business Centre makes life easy for Easy Printing Shared facilities and space for expansion meant that Sunderland City Council’s Washington Business Centre was the ideal launch base for Easy Printing.

Set up by industry veteran Bill Duncan, who decided to go it alone after quarter of a century handling print management demands for clients such as Coca-Cola and Disney, the new business provides the full range of printing and design services for SMEs across the North East.

Duncan says: “I arranged to see the Business Investment Team at Sunderland City Council and they suggested Washington Business Centre. I just fell in love with it when I walked in. The services and the opportunities are excellent and you can take clients there, and know they will be impressed.”

Easy Printing is now recruiting staff to keep pace with demand from clients and the premises at Washington Business Centre allow space for the company to expand. It runs its own design and repro studio at the unit, which produces promotional and marketing products from business cards through to signs, graphics and van liveries. The firm also takes orders for one-off pieces such as branded balloons and umbrellas for events and launches.

In addition, Duncan works with SMEs to help them formulate their marketing plans and identify the right materials to get their message out to potential customers.

SPECIAL REPORT | SUMMER 15

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of the new low-carbon automotive sector, creating greener and cleaner cars for the future, is also important to its manufacturing base. The City Council promotes Sunderland’s strength in these areas through its international links, with a focus on securing leads and investment opportunities in the US, Japanese and European markets as well as emerging economies such as the emerging Chinese and Indian economies.

Automotive manufacturing is currently the most important source of inward investment, but attracting and growing businesses is also part of the council’s strategy, alongside support for creative and hi-tech enterprises.

Cllr Watson says: “We’re operating in an increasingly competitive market and it’s crucial that Sunderland maintains its edge over other locations.

“The MAKE it Sunderland targeted inward investment marketing campaign is designed to shout about what we’re achieving and what we can offer businesses.”

The business investment team’s approach of providing premises, advice, support and assistance is backed, where appropriate, with selective financial assistance. In many cases, this takes the form of support with relocation and expansion projects, with help to buy essential new equipment or funding to explore potential new markets.

Cllr Watson says: “The business investment team has a consistent track record in supporting new and expanding businesses.

Working with partners such as the North East BIC, the University and Sunderland Software City means we can link into a huge bank of knowledge and expertise to provide businesses with the backing they need to succeed.” n

It’s important for enterprises to have the right kind of environment where they can thrive

SUMMER 15

INSIGHT

New premises has given firm the right tools to succeed Expert Tooling and Automation, which designs and manufactures equipment for companies making products from car components to aeroplane engines, is moving into expanded premises at Rainton Bridge Industrial Estate this summer.

The new factory has tripled assembly space to 30,000 sq ft which has resulted in 25 new jobs at the firm, which started out in 2008 with just two staff and now has a headcount of more than 50.

The additional space provides room for a massive assembly area to build and test the complex machines Expert makes for global clients including Nissan, Rolls Royce, TRW, McLaren, Jaguar Landrover and GE Oil and Gas. There are also expanded offices for the project management, design and development teams.

Rainton Bridge’s location close to a number of Sunderland’s automotive businesses has proved ideal for Expert, which has seen demand from Nissan rise tenfold in the last seven years.

The company has worked closely with Sunderland City Council’s business investment team on both the strategic planning and organic growth of the business. Expert Tooling’s operations director, Dave

Bartell, says: “Sunderland City Council is helping us going forward with advice and support. They have been fantastic; they are very helpful – you couldn’t ask for any more from them.

“It’s been a rewarding process. They are keen to take on board our ideas and support our plans for growth. The land we’ve bought belonged to the City Council, and the process to buy it has gone well.”

Expert is proud of its Sunderland pedigree and is keen that its success also results in success for the wider city economy.

Bartell adds: “We are trying to keep everything we do within Sunderland if we can, and if not, within the North East – our expansion, recruitment, apprentice training and graduate placements through University of Sunderland. That’s very important to us.”

Cllr Watson says: “We have a highly motivated business investment team and we will keep pushing forward – each new investment is great news for the city and the region. The trust we build with local enterprises and the added value the team offers investors is fundamental to Sunderland’s future economic health and to its thousands of thriving businesses.”

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SPECIAL REPORT | SUMMER 15

INTERVIEW

SUMMER 1

HELP FOR BUSINESSES IN TRANSITION

Paradoxically, a fast-moving business has to take the time to manage its growth, as Neil Warwick of Square One Law explains Neil Warwick joined Square One Law two months ago to become an equity partner with responsibility for business development as well as his role as commercial and EU specialist.

The firm was founded four years ago by corporate partners Ian Gilthorpe and Alan Fletcher and has grown to become one of the North East’s major commercial legal firms and now has 11 partners.

Last year it won Insider Dealmakers Corporate Law Firm of the Year and a few weeks ago won Law Firm of the Year, Corporate Commercial Team of the Year and was runner up in the Property Team of the Year categories at the Northern Law Awards.

Neil says: “The awards demonstrate how far and how fast the firm has developed and that is down to the quality of our clients and the projects they are doing in the region,

SPECIAL REPORT | SUMMER 15

nationally and internationally. We are working for companies such as Utilitywise plc, Able UK, Highbridge Properties and Shepherd Offshore.

Traditionally the firm has acted for SMEs such as Lanchester Wines, Tharsus and Prismtech but with Neil’s arrival its focus has now broadened to develop the public sector market as Neil has particular experience in working in the public/private area.

In the past 100 years it is estimated that over 99% of innovation has come from businesses with 100 employees or fewer.

These SMEs are the backbone of the economy, particularly the fast-growing, medium-sized businesses run by entrepreneurs as they provide energy, innovation and disruption to markets, all of which is vital to grow an economy. This is even more important in the North East, with approximately 98,000

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businesses being categorised as SMEs. At Square One Law they have attracted a very experienced team of people and have concentrated on exceptionally high service delivery by process improvement and good levels of communication.

Neil explains: “Here the atmosphere is fantastic and I could immediately see the high levels of client service, so the last thing you want is to overlay too much process or systems that would stifle entrepreneurship.

However, process is important when running a business as it helps with brand protection, risk avoidance and maximising profitability.”

He continues: “Communication is also vitally important for all businesses. It’s very easy when you get to a certain size for communication to stray into edict. It’s not physically possible for the board members >>

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INTERVIEW

SUMMER 15

Communication is vitally important for all businesses.

It’s very easy when you get to a certain size for communication to stray into edict

of large organisations to speak to every member of staff on a regular basis, so emails and texts become the norm.

“In a business of our size, one of the great things is that you still can speak to everyone. I have really enjoyed spending the past month talking to the different teams and helping them to develop their business plans.”

Square One Law has now developed into an established business with a recognised brand, its growth is continuing and its reputation is attracting work at a time when the market is picking up.

Neil says: “Some of our major clients are in acquisition mode and we have just completed another acquisition for Utilitywise plc which has also seen significant growth, growing from three people to 1,200 in only nine years.

“We also act for Advanced Industrial Solutions Limited (AIS), a prime example of a local SME which is going from strength to strength, rapidly expanding its operations in the region and further afield.”

At his previous firm Bond Dickinson, Warwick was head of EU and Competition and bringing these skills to Square One Law brings the firm great opportunities. “We are now the only EU and State Aid Competition practice that also

SPECIAL REPORT | SUMMER 15

specialises in European structural funding,’’ he says. “There’s a huge amount of requests for accessing the new structural funds coming from Europe and for firms to grow using public money. It is anticipated a new JEREMIE fund will be available from 2016 which will assist 1200 SMEs over the next five years.”

Also, as the private sector comes out of recession, the public sector faces an increased pace of cuts and this means a lot of services are being outsourced to the private sector with many former public sector employees setting up private consultancies and businesses.

“Just because the government isn’t funding it directly doesn’t take away the need for that service’’ Neil continues.

“These businesses need advice from a range of professional advisers including lawyers, to help them through this critical transitionary phase. We believe Square One Law is well positioned to help these businesses because of our extensive experience in the public/ private arena and because of our agility and our experience of being an early stage business ourselves.”

Square One Law has recently been appointed to work with Achieving Real Changes in

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Communities Limited (ARCC). The company, chaired by Hugh Morgan-Williams has been formed to take over and provide probation services in Durham and Tees Valley and is another example of a business moving from the public sector to a private company.

Hugh said: “I have worked with Neil and Ian Gilthorpe on many projects over the last fifteen years and Square One Law fitted our requirements for both knowledge and experience. In particular their knowledge of public sector procurement and European regulation should be particularly valued in the North East.

“There will be a number of transfers from the public sector into the private sector in the next five years and SMEs could be well placed to capitalise on the opportunities these present.”

So, did Warwick make the right move in joining Square One Law? “It wasn’t the only firm I spoke to in making the transition’’ he says. “Every other firm said they were different but Square One Law really is. It’s a really good, fun place to work, hardworking and client focused and no two days are the same, but there’s a genuine sense of purpose and everybody is pointing in the same direction.’’ n

Joanne Whitfield, Fund Manager FW Capital

SPECIAL REPORT | SUMMER 15

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SUMMER 15

OVERVIEW

FUNDING THE FUTURE

Two investment funds are unlocking the growth potential of established North East businesses, says Joanne Whitfield of FW Capital

Two investment funds set up to invest in established businesses and drive future economic growth have injected around £55 million into the North East economy since 2010, helping 40 businesses to grow and creating or safeguarding more than 1,300 jobs. FW Capital has invested £25m from the North East Growth Plus and Tees Valley Catalyst Funds, which has in turn leveraged an additional £30m of private investment.

Launched in 2010 and part of the Finance for Business North East programme, the North East Growth Plus Fund makes debt, equity and mezzanine investments from £350,000 to £1.25m to fund long-term growth plans.

These investments can be used for a range of purposes, such as for equipment as well as stock purchases, the costs associated with property fit outs and with employing additional staff. They can also be combined with funding from other providers.

Launched by Tees Valley Unlimited in 2013 and a UK first, the Tees Valley Catalyst Fund provides short-term loans of between £100,000 and £2m to fund the performance, warranty and other bonds suppliers often have to provide to fulfil large contracts. This Fund was extended to the whole of the North East

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and North Yorkshire in late 2014.

These funds offer an alternative source of finance and combined with FW Capital’s flexible and collaborative approach have resulted in some real success stories and made a real difference to the economy in the North East.

“Businesses grow in different ways and we offer short and long-term funding options to ensure they successfully maximise their potential. We also work closely with other funders to come up with the right finance package,” Whitfield explains. “On average, businesses in our active portfolio have seen their turnover increase by 30 per cent. Others have repaid our investments and attracted further growth funding from new investors.”

This shows what businesses can achieve with the right growth funding package and the backing of the right funding partner.

“When we assess an investment application we’re looking for a strong management team as well as robust financials and a credible business plan,” Whitfield continues. “We’re focused on the future viability, long-term success and economic impact of the businesses we invest in and we believe that businesses can best achieve this with a >>

SPECIAL REPORT | SUMMER 15

OVERVIEW

SUMMER 15

well-structured finance package.”

FW Capital has invested £8.5m from the Tees Valley Catalyst Fund to date and this has been instrumental in helping businesses in the North East unlock contracts worth well over £100m.

Whitfield believes that FW Capital’s investments have also boosted the confidence of the businesses it has invested in.

“The North East Growth Plus and Tees Valley Catalyst Funds are really focused on helping businesses to unlock their growth potential and with our backing many of our portfolio businesses have achieved their goals.

This has given them a real boost and they’re now much bolder about winning new business and more confident about their future,” Whitfield concludes. n For more information visit fwcapital.co.uk/ northeast or @fwcapital.co.uk

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All good now In 2013, just over a year after its dynamic management team set up the business, FW Capital backed All Good Snacks with a £500,000 mezzanine investment to enable them to develop the company’s brand and expand its production facilities. The investment proved pivotal for the Gateshead-based premium snack manufacturer, enabling it to establish its Manomosa premium tortilla chip brand, expand and win contracts with major UK retailers, including Marks and Spencer. Two years later, thanks to continued expansion All Good has seen a ten-fold increase in its turnover and taken on 75 new staff. It has also gone on to attract additional development capital from NVM Private Equity which is enabling the company to boost its manufacturing capacity and undertake further product development.

“Working with FW Capital gave us the confidence to really reach for our goal to develop a market for premium tortillas through our Manomasa brand, and introduce pitta chips to the market. FW Capital invested at a crucial time for us, and without their investment our ability to grow at the rate we have would have been seriously restricted, and the business momentum lost.”

Calum Ryder, Managing Director, All Good Snacks. www.allgoodsnacks.co.uk, www.manaomasa.co.uk

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OVERVIEW

SUMMER 15

A SPACE FOR GROWTH County Durham is working hard to build an environment that allows businesses to grow, as we report

SPECIAL REPORT | SUMMER 15

Andrew Turner, one of the North East’s most successful inventors, chose NETPark when he was looking for a place to base his business.

The former senior engineer with Gestamp Tallent took office space at the science park, in Sedgefield, County Durham, in 2010 – and he plans to stay.

Turner started his inventing career with the Abidot, a robotic programme aid, which was snapped up by a German automotive company shortly before he arrived at NETPark. Since then, his company Quality Hospital Solutions

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has created a beverage trolley which has saved the NHS many thousands of pounds, and he is now about to launch a potentially revolutionary device for, initially, the oil and gas industry, designed to create a highly visible, virtual tunnel to efficiently and safely evacuate workers trapped in fires.

“I worked for a large multinational and when you first set out on your own you miss the support of a big company,” he says. “One of the great things about NETPark is that the support and contacts are readily available. It’s

SUMMER 15

the innovation ethos which is so great.”

Dr Simon Goon, managing director of Business Durham, the economic development company for County Durham which runs NETPark, says the community is just one aspect which makes the park appealing to start-ups.

“It’s the perfect place for innovative companies to scale up. Not only does it offer a dynamic and supportive environment to accelerate growth into global markets, it brings a likeminded community together. With links to a ready-made manufacturing supply chain and a talented workforce on its doorstep, it has everything a business needs to achieve fully supported, sustainable growth.”

Councillor Neil Foster, Durham County Council’s cabinet member for economic regeneration, says: “Andrew’s is one of a number of success stories showing the huge benefits that NETPark, and Business Durham, are bringing to the county. With the new multi-million pound expansion we look forward to further cementing County Durham’s place as a global hub for innovative and successful businesses, boosting the economy and bringing more jobs to the area.”

NETPark is now full – hence plans for the major development.

The new £13m ‘Explorer’ development, due to be completed in 2017, will offer bespoke laboratory, clean room and office spaces ranging from 3,500sq ft to 5,000 sq ft. Explorer units will provide grow on space for graduating incubation companies as well as established businesses.

It means that companies such as Andrew Turner’s will have more space to grow while freeing up room for the university spin-offs and innovative start-ups which are just starting on their journey.

Turner says: “I’m interested in the whole innovation culture and being part of what they’re trying to create at NETPark. When we get more success stories, that culture will continue to grow and grow. It’s exciting to be part of it.”

It is estimated that the expansion over the next 10 years will create 3,000 jobs and add another £400m to the region’s GVA. NETPark will become a ‘materials powerhouse’ – a global hub for companies integrating cutting edge materials into everyday products. >>

OVERVIEW L-r: Gary Gibson (CTO), Kurt Scott (Grants and Projects Delivery Manager) and Neil Loxley (CEO)

Why NETPark has been perfect for us Fresh from being shortlisted in the NHS Innovation Awards, IBEX Innovations is at the forefront of x-ray technology, but its growth journey started with a decision to take a virtual office at NETPark.

IBEX produces advanced x-ray detectors which offer high-resolution capabilities and fast capture times at far lower doses of radiation than the average technology.

The firm has received VC funding for its technology, which is being used in industries such as medical, food and industrial imaging.

Dr Gary Gibson, chief technology officer at IBEX, said: “We started off really small and it was quite a slow growth until we secured equity funding and industrial investment to secure our patent at the end of 2011.

“Our technology is being used in a wide

range of industries. Right now we’re working with the food industry to pick out things like plastic and glass that you would struggle to see with any other conventional technique.” The firm, which employs 14 staff, graduated to moving to NETPark in the NETPark Incubator and then moved to 2,000sq ft of office and lab space in NETPark’s Discovery building. Now, as part of its growth plans, the company is looking to move to the science park’s new Explorer development when it’s completed in 2017.

“Being at NETPark we’ve been able to find out about sources of funding and network with like-minded companies,” added Dr Gibson. “The office itself is in a really lovely setting – like an American campus feel – and we’re looking forward to being part of the next phase of its development.”

Right now we’re working with the food industry to pick out things like plastic and glass that you would struggle to see with any other conventional technique

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SPECIAL REPORT | SUMMER 15

OVERVIEW

SUMMER 15

These are products which will help us be healthier, generate sustainable energy, keep us safe and secure and transform the lives of those around us Go Go can grow grow!

Dr Goon says: “These are products which will help us be healthier, generate sustainable energy, keep us safe and secure and transform the lives of those around us. The companies creating these innovative and high value products will have an enormous social and economic impact on the North East.

“For every success we’ve had, we want hundreds more, so that by 2025, NETPark will not just be a destination of choice, it will be a destination of necessity for SMEs, blue chips, universities and governments who want to unleash the potential of materials – and Business Durham will be supporting them every step of the way.”

Apart from running NETPark, Business Durham’s work includes attracting flagship inward investors, such as Hitachi Rail Europe, the rail giant which will build high-speed trains from its £82.5m factory at Merchant Park in Newton Aycliffe. County Durham will also see the launch of the country’s first fully digital bank, Atom, in Durham City.

The organisation also supports companies once they are established by, for example, identifying providers to train the workforce as the business grows or needs access to training schemes, many of which are subsidised or free.

“Expanding or completely relocating to an area is a big decision,’’ says Dr Goon. “But we can help businesses maximise their investment opportunities by putting them in touch with the right funding, property and a fantastic North East supply chain. It’s about helping the move go as smoothly as possible and then offering the right support once they’re here.

“We’re a trusted guide. We forge long-term relationships with companies so they can see real, sustainable growth. We want to see

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businesses locate here, stay here, and grow here so it’s imperative we offer them the right environment in which to grow and thrive.”

The environment can vary from virtual offices and lab spaces to factory units or warehouses.

Business Durham is one of the county’s biggest commercial landlords and it attracted 79 new tenants last year. Experts from Business Durham also have access to properties run by other landlords. Development land is also available at a number of locations throughout the county for entrepreneurs seeking to grow their companies. Business Durham is equally keen to support the region’s future entrepreneurs via programmes such as its Future Business Magnates competition in schools and the Durham Creatives programme. The latter has supported 60 startups in the county via a programme of free workshops, practical advice and mentorship.

One company to benefit from the programme is I Sunk Your Battleship, a men’s fashionwear brand based on the outskirts of Durham City.

Its owner, Ross McPhie, has designed clothing for rap megastar Puff Daddy in New York, as well as sportwear giants Nike and O’Neill. Like all of his collections, his latest – a series of T-shirts featuring Liberty Art Fabric – is made and designed in the North East.

McPhie says: “The programme has been a great support to us and a champion of what we’re trying to do. Meryl and Jane helped put us on the right track to funding and we succeeded in gaining investment from NorthStar Ventures which has meant we can really start ramping up what we’re doing in terms of marketing and our website.”

While many companies start small, with the right support, global aspirations can be met and exceeded. n

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GO GO Energy began life as a small solar design, supply and installation business in 2010 – and it’s all go go now for the company, which plans to double its workforce. Previously known as Home Solar Saver Co, the company initially rented a small office unit in Business Durham’s Derwentside Business Centre and then started winning nationwide contracts.

Ian Reed, senior partner with the firm, said after winning more contracts they took a strategic look at the business and expanded into other renewable energy markets, including installing biomass boilers. With the company’s ambitious growth plans came a move into a larger unit at Derwentside, with storage, boardroom and office facilities. The move has paid off with the company’s clients now including a major furniture retailer and one of the world’s leading solar energy companies. The company is on target to see its £200,000 turnover reach £1.2m this year and it plans to double its workforce by the end of the year.

“Derwentside Business Centre has been instrumental in helping us to grow,” says Reed. “The move has enabled us to take on larger contracts and now, if we need to we can simply take another unit. That flexibility is critical to our success.”

Derwentside Business Centre has been instrumental in helping us grow