BQ2 Special Report, SME Breakthrough

In association with

SPECIAL REPORT: SME BREAKTHROUGH SHARING A VISION Santander’s Barry Naisbitt on the economic outlook CAPITAL CRUSADER Financing Fin-Tech firms STREET DREAMS A Thai food revolution

CONTENTS

CONTACTS

08 HEAD IN THE CLOUDS

ROOM501 LTD Bryan Hoare Director e: bryan@room501.co.uk

Business leaders must learn to trust cloud technology or get left behind

EDITORIAL Mike Hughes Editor e: mikehughes@room501.co.uk

10 SHARING A VISION Santander’s Chief Economist has a knack of seeing things others miss

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

14 LASER SHARP Laser technology has given a Barnsley company a cutting edge in business

16 STEPS TO SUCCESS How small firms can embark on a journey of discovery...and prosperity

18 BREAKING THROUGH Santander’s head of UK banking outlines the challenges facing SMEs

40 CAIN IS ABLE Water magnate James Cain on the importance of free flowing finance

44 GLORIOUS BLOOD An innovative company’s adventures in fake blood, chocolate and snow!

48 STREET DREAMS How a business empire was built from humble Thai street food

MEET THE CAPITAL CRUSADER

SPECIAL REPORT:

INSPIRATION AND WISDOM

WELCOME A river of entrepreneurial spirit has been flowing fast through Yorkshire 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, with Santander’s help, 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 chief economist to the people behind a new Thai restaurant chain.

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 find a piece of advice or wisdom that might make the difference to your plans.

MIKE HUGHES Editor, BQ Yorkshire

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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.

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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, April 2015.

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In association with

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BQ Magazine is published quarterly by room501 Ltd.

SPECIAL REPORT | SPRING 15

OPENING COMMENT

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HELPING YORKSHIRE’S BUSINESSES BREAK THROUGH Over the last several years Yorkshire’s business landscape has changed greatly and despite this SMEs continue to be the lifeblood of our economy. Running your own business is a tough job and we need to ensure that we are giving your businesses all of the help and support that they need to be successful.

At the end of March we re-launched our Breakthrough programme to do just that.

As part of a week-long burst of activity which included the ‘Breakthrough Box’ festival in City Square, Leeds, where speakers including our own chief economist, Microsoft and Peninsula spoke on matters affecting Yorkshire business today. Our SME Summit at Aspire brought SME Entrepreneurs together to network and hear from inspirational speakers from Microsoft and Uber as well as Sir Trevor Soar and Myleene Klass.

Over the past few years our Breakthrough programme has already been helping fast growth businesses see great results. They were growing their workforce, launching new products and entering new markets. But we understood that not all ambitious businesses are necessarily fast growth – ambitious businesses come in many guises and we wanted our Breakthrough programme to be available to help them to achieve their goals,

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whatever they may be.

With this in mind, we have now added new elements to the programme which can be categorised under the five pillars of knowledge, talent, international, connections and finance – developed to address the different ambitions we hear business owners talk about most often. Not only are we bringing entrepreneurs together at various face to face events, but also online via our LinkedIn communities, which is already encouraging some great debates and knowledge sharing. We have increased the number of subsidised graduate interns that we can provide access to (160 provided in Yorkshire last year), recognising that finding and retaining high quality people is a key hurdle for many firms. And as more businesses

look abroad to new markets, we’re here to help them find the right one, by adding even more countries and contacts to our trade portal which is available to all of our Corporate and Commercial online banking customers.

We are continually working closely with SMEs, listening to their business challenges and looking at ways in which we can help them be more successful. I hope that you enjoy reading this supplement and please don’t hesitate to get in touch with me should you require any additional information or would like to talk about your business. n Neil Williams Regional Director West & North Yorkshire 07798 581 037 Neil.Williams2@santander.co.uk

Over the past few years our Breakthrough programme has already been helping fast growth businesses see great results

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SPECIAL REPORT | SPRING 15

NEWS

SPRING 15

Tax specialist strengthens its team, roofing experts help to preserve part of the region’s heritage, top trio land partnerships after ‘gruelling’ selection process, fuel card company on the road to a record turnover >> James secures Dacres role The Land and Development arm of Dacres Commercial has appointed James Mohammed as a senior surveyor.

James is a fully qualified Chartered Surveyor with over 11 years experience in the property industry. He previously held positions at Town Centre Securities and Colliers International as well as successfully setting up a land and development business and a property maintenance company.

James, who lives in Harrogate, will be based at Dacres Leeds office and will be working with the firm’s Managing Director Jonathan Isles, who heads up the Land and Development Division.

Jonathan says: “James has an in-depth knowledge of the property market and relevant consultancy experience advising on of a variety of residential and mixed use development sites and he will be a valuable asset to our team.”

James says: “Dacres has an unrivalled reputation in the industry and they advise a wide variety of clients from public sector bodies, to public and private companies and land owners on the development potential of their land holdings. I will be working on a range of prime development sites on behalf of a number of important clients, which promises to be very interesting and rewarding.”

Paul Houghton, Claire Davis and Donna Steel at Grant Thornton

>> Tax specialist bolsters Sheffield team Grant Thornton is continuing to strengthen its Sheffield team with the appointments of Claire Davis as director in its corporate finance advisory practice and Donna Steel as director in the Yorkshire assurance practice.

Having worked for Grant Thornton for almost nine years, Claire has a strong track record in corporate finance and M&A having worked on a number of high profile deals. She has also been recognised in various awards for corporate finance professionals.

Claire will continue to be based in the firm’s Sheffield office and will focus on the Yorkshire and North East deals market as well as supporting Grant Thornton’s wider audit, tax and advisory services across the North of England.

Donna has been with Grant Thornton since 1999, having trained and qualified as an ICAEW chartered accountant with the firm. She has worked in the audit department for the last 16 years, mainly focusing on larger and more complex assignments including international and listed groups as well as working on owner managed businesses and pension schemes. Donna is also responsible for audit quality in the Yorkshire assurance practice.

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On behalf of a number of important clients which promises to be very interesting and rewarding SME BREAKTHROUGH

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>> Saving a slice of history Sheffield-based Martin-Brooks is putting the finishing touches to a year-long project that has brought together five centuries of roofing techniques. The heritage specialists have carried out essential repairs on the Old Magnus Buildings in Newark-on-Trent, which comprise structures from the Tudor, Georgian and Victorian eras. Working with main contractors, Robert Woodhead, the renovation forms part of a £5.4 million Heritage Lottery Fund project to convert the historic complex into museums dedicated to the town and the English Civil War. MartinBrooks has refurbished roofs on three grade II listed buildings, reinstating reclaimed Welsh slate, clay handmade pan tiles and plain clay

tiles, in keeping with the properties’ original construction. The firm was also charged with renewing all cast iron rainwater goods.

Contracts director Dale Wright said: “The Magnus Buildings are a special slice of British history. There are few places where architectural styles from three different centuries sit together so closely and whilst their restoration has been a long and painstaking process, it is a pleasure to know our heritage skills are ensuring they will be enjoyed by generations to come.”

The buildings are named after Thomas Magnus, who opened the Tudor hall in 1529 as a free school to offer a better education to ‘commoners’. It was then extended in response to changing attitudes to learning.

Fiona Miller, Chloe Ellis and Victoria Craven of Baker Tilly

>> Trio overcome ‘gruelling’ selection process land partnerships Baker Tilly has appointed three new partners in its Leeds office.

Victoria Craven, who grew up in Leeds and attended Woodhouse Grove School, joined Baker Tilly as a trainee in 1998 after graduating from the University of Dundee. She became a fully qualified ACA in 2001 and has worked as an auditor for a variety of clients including owner managed businesses, AIM-listed plcs and pension schemes.

Chloe Ellis, who has worked in Leeds for more than 10 years, joined Baker Tilly as a fully qualified chartered tax adviser in 2011. She has broad ranging experience across all sectors and specialises in transactions tax issues, often involving large, international corporates.

Fiona Miller, who is originally from Scotland but settled in Yorkshire 25 years ago, joined Baker Tilly in 2004, having trained at a Big Four firm. Fiona heads up the firm’s Restructuring and Recovery technical team and has extensive knowledge of restructuring processes, from both a practical and regulatory perspective.

Kevin O’Connor, Baker Tilly regional managing partner for Yorkshire and the North East, said: “Victoria, Chloe and Fiona have all shown that they have the talent to successfully come through the gruelling selection process, and I’m delighted that we have been able to offer them partnerships at a relatively early stage in their careers. “

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NEWS

>> Fuelling growth The Right Fuelcard company (TRFC) is recruiting 14 sales staff.

Founded in 2011 by serial entrepreneur Jonathan Turner – CEO of the Bayford Group and Bayford Group MD Liz Slater – the firm now employs 46 people.

With one existing business successfully selling BP fuel cards, Turner and Slater identified a gap to sell other premium branded fuel cards.

An approach to Shell saw the business take off and TRFC now distributes euroShell cards to SMEs the length and breadth of the UK. Forecast to post £144m turnover with unprecedented profitability in July 2015, Hunslet-based TRFC had been faced with a major skills shortage in 2012. Struggling to find the quantity and quality of people who wanted to sell via traditional recruitment methods, TRFC created and launched its own training arm, The Bayford Foundation.

The foundation has given job opportunities and training to people from all walks of life who have the potential and right attitude to succeed. It has also forged strong partnerships with key partners including The Prince’s Trust.

Additional milestones span taking on both Esso and Keyfuels fuel card distributorships, opening a new office in Harrogate with a seven-strong team and achieving Investors in People accreditation in 2014. Ambitious growth plans include further expansion to premises in the North of England later this year. TRFC director Adam Walsh told BQ: “We’re great believers in employing people with the right attitude and we have a motivated team who are 100 per cent bought into the vision for the business and want to be on board for the long term.

“The next12 months will be formative in further developing our sales pipeline and accelerating our share in our market place.”

We believe in employing people with the right attitude

SPECIAL REPORT | SPRING 15

AS I SEE IT

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IT’S TIME TO TRUST CLOUD TECHNOLOGY Pete Watson, chief executive of hosted desktop specialists Atlas Cloud, says Yorkshire is wellplaced to be at the forefront of an evolution It is often a challenge for business people to keep up with the relentless pace of change in workplace technology.

Having come to terms with the internet, social media and a multiplicity of IT devices, they are now faced with advances in cloud computing, `the internet of things’ and the growing importance of the virtual desktop, which will mean a reduced physical presence of technology in the workplace.

The workplace no longer needs to be exclusively one physical location. There are increased opportunities for homeworking and mobile working, which gives a business a much wider talent pool for recruitment.

From our experience, it has enabled our clients to attract talented people, such as working parents, who had previously been restrained by the inflexibility of nine-to-five, office-based working.

Just working from home can bring a one day per week gain in productivity. According to Microsoft, people who use desktop solutions are seeing a 40% increase in productivity and certainly our clients are seeing 20% as a minimum.

Businesses that are up to speed are putting their servers, infrastructure and applications

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into data centres, so their work environments are changing with less wiring, an absence of PCs, no server cabinets and less need for air conditioning. In turn, this creates more opportunities to use office space for people rather than machines, allowing hot-desking anywhere.

Cloud-based hosted-desktop solutions also create the opportunity for employees to work on any end-user device. The `internet of things’ will bring another revolution in connectivity allowing devices which have hitherto been outside the IT realm to communicate with each other. In domestic terms you will be able to control household appliances from a mobile phone, but the implications for business are limitless.

Utilising a secure hosteddesktop solution, employers can allow their staff to work with their own devices, of which the average user now has four or five, combining smartphones,

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tablets, laptops and PCs. I believe we are going to start seeing a consolidation, not necessarily into a single device, but certainly fewer which will be able to do everything currently done by several. Of course, accessing information and applications remotely on multiple devices raises the issues of data security. Ensuring hosted desktop systems are robust and locked down with data secured in the cloud is one of the main priorities for business owners as they evolve their business operations to incorporate cloud-based IT infrastructure.

Not so long ago, data was sent and received

AS I SEE IT

that it’s understandable if business people throw up their hands and decline to make the move towards the cloud, but rather continue to invest in office-based IT infrastructure.

However, they have to ask themselves the question, why spend heavily on technology that will be obsolescent in little over a year?

With a hosted desktop and the cloud, specialists can manage that complexity for the client and provide an evergreen platform that is always upgraded and secure as technology develops.

This is the future of workplace technology and, from our Leeds office, we have been

Business people...have to ask themselves the question, why spend heavily on technology that will be obsolete in little over a year? from a PC via a phone line, now it’s delivered by broadband and mobile signals to laptops, smartphones, tablets and very soon watches.

Again, this presents businesses with an opportunity, but also a risk. If someone can get information from an organisation in this multiplicity of ways, with so many devices connecting to the workplace, how can we protect data?

We take this issue incredibly seriously and deliver banking-transaction level security, which is validated by Atlas Cloud achieving ISO: 27001: 2013, which is a new international standard for information management and is the highest possible security accreditation.

This accreditation encompasses our data centres, which also play a role in reducing clients’ disaster recovery liabilities with their data and applications stored remotely and securely.

So yes, technology is changing with increasing speed and in the face of

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encouraged by the readiness with which Yorkshire businesses have embraced it and that has given us a solid base for winning business across the UK. The region enjoys high connectivity being ideally placed for the North’s other great cities of Manchester, Liverpool, Sheffield and Newcastle. The government’s Northern Power House initiative with improved transport links and proposals to invest £11m in technology hubs in Manchester, Leeds and Sheffield, can only enhance that. Already, Leeds is a financial centre with high security requirements, which keep us at the cutting edge of developments.

Also, around Leeds there are good quality data centres and a talented enthusiastic workforce is available. Working out of Yorkshire means that our costs are so much lower than those of London and South East-based IT specialists and that makes us so much more competitive.

Hosted desktop solutions and the cloud are revolutionising the way companies do business and run their operations. By embracing their potential, Yorkshire businesses can be at the forefront of the evolution of the UK economy. n

SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

A RARE TALENT WITH A CLEAR VISION BQ Yorkshire Editor Mike Hughes meets a man with his finger on the pulse of the economy – Santander chief economist Barry Naisbitt

SPECIAL REPORT | SPRING 15

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INTERVIEW

The pace of growth is a good thing for the newer firms as well...bank lending figures have strengthened, although still nowhere near as strong as they were in the years leading to recession, but they are better than they were Barry Naisbitt is an utterly engaging, fascinating and knowledgeable man.

Which makes him a really difficult person to interview.

You’ll know what I mean if you have ever had the good fortune to hear him address an audience. What he says and how he chooses to put his thinking across is so interesting that you forget to write it down.

The assembled audience in the Santander Breakthrough Box in City Square, Leeds, paid close attention to his predictions and interpretation and it was easy to see that this was a man of influence, whose years of experience had given him a rare insight into the market behaviour.

So having had to snap out of it and commit some words to paper, what makes this man so important? Firstly, I imagine he would say he isn’t. Important, that is.

As chief economist at Santander he does a job for the bank by bringing pinpoint clarity to a wall of graphs and daily – hourly – indicators from economies, multinationals and households that, pieced together, tell him what has just happened and what it means for the UK at home and abroad.

“I have been telling people over the last two or three years ‘there has been a steady and cautious optimism’, and ‘things are improving’,” he says, adding “dot, dot, dot” to emphasise that there is more to come for the economy.

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“But perhaps we are now in the state where that seems a bit too negative.

“We have now had eight straight quarters of economic growth and that gives a feeling that the economy is improving and is a better place to be.”

That’s the thing about Barry. He makes the economy interesting and relevant. Alive. I think it was 30 slides he used later when he was addressing his audience in the box. That’s dangerous territory – 20 is taking a bit of a risk, but 30?

He is also an observer of the observers, analysing what the analysts are saying as if he isn’t one of them.

“Economists tend to focus on growth figures a lot,” he says, “but it is things like employment, unemployment and investment – a whole range of things. I guess I’m not the sort of person who uses ‘upbeat’, but it is a lot more positive a picture than we have seen.

“It doesn’t mean that there aren’t things that could be a lot better, but these successive periods of growth are an important element.

One thing I certainly take heart from is that the growth hasn’t been spectacularly quick, but it has been steady.

“While I suppose I would like the spectacular, it’s nice that we have the steady.

“For companies in particular, there is a desire to see things continually improving, without it necessarily looking as if the improvement is too rapid and in risk of turning around on itself again.” >>

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INTERVIEW

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Some Yorkshire businesses may say growth has to be fast, so there is something to show for the effort and you can move on to the next item. Others say careful, steady, progress means a higher quality product and the likelihood that the foundations will still be around in a century or so (or through the next Parliament, to return to the subject in hand). Barry seems to be a fan of the craftsman approach – good, home-made

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building blocks fitting together to make an impressive home that can be handed on through the generations.

“The pace of growth is a good thing for the newer firms as well,” he tells me.

“Bank lending figures have strengthened, although still nowhere near as strong as they were in the years leading up to recession, but they are better than they were.

“One of the slides I use in my presentation

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shows that firms of varying sizes are keen to take on people, which means we are running at a high rate of vacancies in the UK, and all these things are positive.

“Entrepreneurs will see that there are opportunities and these are people who want to start their own business, perhaps because they have had that great idea, or want more personal control rather than working as part of a bigger company – or perhaps they see there

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While I suppose I would like the spectacular, it’s nice that we have the steady

are more options.”

Current financial decisions, particularly planning for the future, are going to be directed by the looming election. Mr Cameron isn’t seeking a third term, which might influence economic confidence one way or the other, but who will be running which bit of the country in a few weeks’ time is a vital cog in the UK’s machine.

I suggest the election is a spanner in those

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works, but Barry chooses his words better.

“I don’t think things will grind to a halt, but big events like an election will obviously give people pause for thought and some may think they want to pause and wait for things to clear.

“But if I had something ready to go I would want to get it out to market as quickly as I could.”

Big events like the election and Greece’s predicament aside, he agrees the general climate seems bright for businesses.

“We have been through a prolonged recovery and, looking around, the US is growing at quite a respectable rate – snow permitting – and Eurozone policy is now much more accommodating.

“The consensus of external views is that UK growth will be about the same this year as last and Eurozone growth will be slightly faster than last year. There is no expectation I’ve seen that growth is going to slow in a dramatic way. Regional and national economies need to have a long-term view just as much as any investor or manufacturer and while Barry is making it clear that the indicators are hugely variable and need watching and crossreferencing minute by minute, there are some things to look out for.

“We all know we have incredibly low inflation at the moment, and it could even go slightly negative for a few months this year – that seems on the cards largely but not totally due to low oil prices.

“Very low inflation in the short term means we will be starting to see real earnings picking up and that will be followed by consumer demand. Unless something from left field comes to knock us off course, there will be a more solid background for households and people selling to households.

“I also think we could be entering a period where we no longer expect growth to be very rapid and we start to get used to the idea of it being reasonable at two or two and a half per cent.

“This gives companies more opportunities to actually sell their products.”

This down-to-earth analysis and clarity of thought is also applied to the next big step for growing and confident firms – exports.

“The slow Eurozone growth rate has clearly

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INTERVIEW

hurt our exports, so if we see those markets picking up a bit, that would be positive for us. But equally as important is the impetus for British firms to look further afield.

“Santander has played its part in that, particularly through our connections in Latin America, but those further markets are the ones that are growing more rapidly and it is important that companies become more connected to those markets.”

Those international lessons can also be applied at home. When Jim O’Neill, former chief economist at Goldman Sachs (and Sheffield University graduate), coined the acronym BRIC to identify and link as a potential markets Brazil, Russia, India and China it transformed the way those markets were perceived.

Around the UK there is an ongoing push to have companies speak with the same regional voice and work together ‘for the greater good’.

Barry sees the value in that for Yorkshire, but “there is a danger that people will think we’re all the same – which we clearly aren’t.”

So there is a balance to be struck where the pride of representing Yorkshire and being a player in its economy is highlighted alongside the individuality of its ‘members’.

Different circumstances will bring out the best in different companies and perhaps that individual success, multiplied so many times, is Yorkshire’s unique strength.

But regionally and nationally we can’t stop ourselves wanting to do more and Barry certainly isn’t taking his foot off the accelerator completely.

“There is definitely a danger in resting on our laurels and not continuing to seek out those new opportunities. I don’t think the urgency to grow is lacking at the moment, but if these factors we are seeing don’t stimulate activity, then I don’t know what will.

“For companies here and further afield, standing still isn’t an option – but then I’m not sure it ever was.”

Barry Naisbitt will quickly deny he is anything special. He will say he analyses and reports.

And he would be right.

But then a 40-year-old Rolls-Royce has a wheel in each corner just like a 40-year-old Skoda.

But that doesn’t make them the same.

Trust me – Barry has the touch of class. n

SPECIAL REPORT | SPRING 15

A LASER SHARP EYE FOR GROWTH SPECIAL REPORT | SPRING 15

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CASE STUDY

From recession to rejuvenation, one Barnsley company at the cutting edge of manufacturing is continuing to grow its order book

Like many UK manufacturers, the 2008 crash and subsequent recession meant Cutting Technologies faced challenging times.

The traditional heavy engineering side of the business had slowed in tandem with the downturn in UK manufacturing and the Barnsley company found itself at a crossroads.

Fortunately the business’s directors recognised the growth potential in developing the creative side of their business and since then Cutting Technologies hasn’t looked back.

Through its inventive and entrepreneurial spirit in pursuing new markets, the company diversified into the design, creative and interiors sectors.

In the past three years Cutting Technologies has manufactured everything from laser cut latex clothing for Paris Couture Week to hundreds of engraved cider pumps for Rekorderlig. By using existing and new machinery in innovative ways, Cutting Technologies has diversified, grown and challenged perceptions of what’s possible when it comes to laser cutting and engraving.

This innovation has gone hand in hand with investment. In the past year, Cutting Technologies has invested £1.25million in the most technologically advanced laser equipment in the world.

“It was relatively early in the recession that we recognised the growth potential in developing the creative side of the business,” said co-founder and business development director Jane Robinson.

SME BREAKTHROUGH

“We poured our resources in that direction and now business is growing at an impressive rate with the company turning over £3.1m in 2014.

“We’ve always catered for a variety of markets so when one is down, another is up, but we’ve been confident enough to break out of our traditional manufacturing base and forge links with designers, leading brands, architects and developers.”

Cutting Technologies’ improved ability to cut copper, thanks to a new Fiber laser, offers huge potential for export and continuous improvement and is a priority for the company over the next few years.

The recent capital investments will create 10 jobs by next spring and will also open up new opportunities in the re-emerging construction sectors.

“We are seeing an upsurge in construction-

related orders and that is excellent news for the ongoing economic recovery,” added Jane.

“Growth in property construction is particularly strong and by combining our entrepreneurial spirit with some savvy marketing and PR, we’re continually connecting with new markets.”

Last year Jane was accepted as a Freeman of the Company of Cutlers in Sheffield and named one of the Top 100 Role Models in manufacturing. She joined 450 members who qualify as Freemen and she strives to promote the interests of the manufacturing industry in the Sheffield City Region and UK-wide.

“It was a huge honour to be invited to join the Company of Cutlers alongside so many notable figures in the regional manufacturing industry. One of my key aims is to use both positions to encourage more girls to consider careers in manufacturing and engineering.” n

Growth in property construction is particularly strong and by combining our entrepreneurial spirit with some savvy marketing and PR, we’re connecting with new markets

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INTERVIEW

SPRING 15

LITTLE STEPS THAT CAN LEAD TO GIANT LEAPS BQ Yorkshire Editor Mike Hughes gets a global viewpoint from Andrew Joy – Santander’s international director of UK Corporate and Commercial A little over 2,500 years ago, Chinese philosopher Lao Tzu said: “A journey of a thousand miles begins with a single step.”

Last week, Andrew Joy persuaded me that it should really start with six steps. So let’s follow the philosophy of Joy and see where it takes us.

His steps are Santander’s guidelines for global success, and it’s easy to see how beneficial it is for firms to break the journey into these separate, but linked, stages: 1...Growing 2...Exporting 3...Connecting overseas 4...Coping with growth 5...Setting up abroad 6...Becoming a global leader “This plan works for everything from an SME considering exporting to an established corporate,” explained Andrew, “they are just at different points on those pillars.”

This is new thinking, based around the extra things Santander are putting in place to support businesses, like Breakthrough and Breakthrough International, which utilises

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13,000 branches and 150,000 contacts worldwide to help an export journey reach its destination.

“We also put a lot of time into trade missions – like Spain next month and Poland and Mexico in June. These are markets that we have identified as having strong potential for British exports,” says Andrew.

“Mexico, for example, has seen a 12.5% increase in the British goods it imports over the last few years and there is a bilateral trade agreement between the countries aimed at increasing that trade to just over £4bn this year.

“They want our power generation machinery and equipment, pharmaceutical products, beverages, organic chemicals. While the opportunities identified include aerospace, healthcare, retail, infrastructure, energy and electronics.”

A shopping list like that must cover hundreds of Yorkshire firms, who might well start their investigations by ticking off the items they can supply at the same time as flagging up associated products or services. Then give Andrew’s team a ring and get things rolling.... before someone else does. Having arranged that first meeting, Santander’s Trade Portal is likely to be on the agenda. This is an impressive bit of kit for Santander Corporate and Commercial online banking customers – an online view of how 185 countries trade, what is hot, who the key contacts are – totalling 10,000 pages covering 40,000 trade shows, 60,000 suppliers, 100,000 importers and more than a million public and private tender opportunities. Andrew is proud of the hard work that has gone into trade portal, and its immediate success.

“Portal has gone down very well and has already won a ‘Best SME Innovation’ award from Business Moneyfacts. It really is a unique offering with unparalleled export information pulled together by Santander’s businesses around the globe, and there is an agency in Paris whose sole purpose in life is to keep the thing updated, so nothing gets missed.”

After experiencing that vast database of information, there might not be much more you need, but Trade Club is also available to

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INTERVIEW

I think there is still an element of fear about exporting...but the ideas are there and firms are looking to broaden their horizons

put business contacts in touch with each other.

“So, if you join the Trade Club in the UK, you can log on and browse Santander business customers around the globe who are interested in the same things you are and you can correspond with around 10,000 members safely over the system,” he explains.

This is genuinely exciting stuff and, crucially, will save time when firms are trying to export into a competitive market and will save them money by offering a virtual guided tour of the possibilities rather having to organise flights, hotels and meetings to follow up a sales lead.

And there is little fear of the idea being copied, because of the bank’s footprint, with a ten per cent share of the corporate market in nine countries. That is a lot of market share to compete with and building a critical mass

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of members would be challenging, to say the least. But there is still no stopping Andrew Joy. He needs to make sure he has the full attention of clients and potential clients, so there is also Santander Flame (after the corporate logo), an online FX dealing system, offering real-time pricing and inter-bank rates for transparency. All very impressive, but what does Leeds-born Andrew say about the export market from Yorkshire in particular?

“I think Yorkshire has opportunities in all sectors. We have definitely seen increased activity, and it is beneficial for the Yorkshire economy as well as the businesses themselves to start exporting.

“I think there is still an element of fear about exporting, which is why we brought the portal in, but the ideas are there and firms are looking to broaden their horizons. One of the bank’s jobs is to demystify as much as possible and help them get there.”

A fair few years ago, Yorkshire entrepreneurs who dreamed of exporting would make an appointment with their bank and hope the manager had been to Spain for his hols so they could talk about international markets, and would then go to the travel agents next door, book his hotel and throw caution to the wind.

Technology and an open global marketplace now brings them Santander’s Trade Portal and Trade Club.

Times have changed and businesses who keep pace are in for an exhilarating ride. n

SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

Steve Pateman has a very bad cold and a very good job. Not an ideal combination, but for Steve the good always outweighs the bad.

As the Head of UK Banking for Santander he basically built the corporate and commercial banking arm which set out to transform how banks approach SMEs and is rightly proud of the progress it has made in rewriting the rule book on how banks are supposed to deal with businesses. I have heard so many times from small businesses that they have to hunt down sources of financing because banks don’t understand them. They will help, of course, but only if the business plan is rock-solid and good to go. I think Steve Pateman turned that on its head, recognised the absolutely key role SMEs have in the UK’s landscape and opened doors – and minds – to ideas, working in partnership with business owners.

That landscape is now different – as if someone tapped banks on the shoulder and said ‘you know what you need to do? Understand them.

Relate to them.’

“There are still challenges out there for SMEs, of course. But these are firms that have been the main drivers behind the recovery, which has taken five years to really get going” says Steve.

“Banks up and down the UK need to continue supporting these businesses and keep that recovery going. We can reflect on what has been achieved, but we also need to focus on what needs to be done to keep businesses growing.”

A close, long-term relationship is central to the Breakthrough philosophy that Steve has developed. The closeness comes from understanding the sector, the route the business has taken so far and where it needs to be heading.

“It’s a little like a library, he suggests. “You can visit as often as you like, take out a book – like a Saatchi & Saatchi masterclass – and perhaps get something from that and then come back later and take another book out from Microsoft and then another book which is a trade mission.

“We run the library, but by doing that we get to know what customers need and can

SPECIAL REPORT | SPRING 15

REWRITING THE RULES BECOMES A PHILOSOPHY Mike Hughes goes to the library to look at the future of Santander’s Breakthrough programme, with Head of UK Banking Steve Pateman

grow with them” Steve is now evolving Breakthrough to focus on five key areas that will address those needs.

We have all seen the graphs of recovery, a steep hill climb rather than a mountain peak, but heading steadily upwards. For small and medium-sized firms to keep pace and then move on to lead the climb, they will need to stick to some basic principles: • Make connections • Get access to talent • Develop an international footprint • Have long-term access to finance • Gain the right knowledge “We want firms to be able to develop by focusing on what is particularly pertinent to them at any given stage. So if they are trying to bring in new talent we can help them with internships, and if they want to export we can introduce them to Trade Club, which has a community of importers and exporters in 13 countries to help them get an insight into

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what a market is like on the other side of the world without having to go there.

“Equally, if they are looking for innovative finance we can show them funding options that will accelerate their growth. And if they need to expand their knowledge in a sector or connect we can send them to masterclasses or events like the Breakthrough Boxes.”

After achieving its early aims, the plan now is for Breakthrough to have a much bigger footprint and a more far-reaching target.

“When we started this transformation, we only had market share of about 1-2% and 13 or 14 business centres. Now we have a share of around 7% and 72 business centres, so we can afford to be more ambitious,” says Steve.

The requirements of smaller firms has changed through those five years as well, with intangible things like connections to the right people, or the progress of a good intern to an influential place in the company becoming as important as the core finance options.

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Steve says: “I’m incredibly proud of the way Breakthrough has survived and been able to adapt and develop. People forget that we started it when we decided not to be a part of the Business Growth Fund. We took that decision because we thought that, with an entry ticket of £250m, we would want more of a say in where the money was going.

“So we took a brave decision to create Breakthrough, with mezzanine financing at its heart, and have been doing that in the same way for five years. Many banks might have lost track of things after five years, but we have made Breakthrough integral to our DNA. “I understand the challenges SMEs face.

Santander Corporate and Commercial was effectively a start-up, which helps us appreciate what it takes to be successful. We had the support of the Santander Group and that continued and has grown because we were successful.”

“I suppose I’m quite old-fashioned in that I

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INTERVIEW

I’ve been a corporate banker all my life and helping companies grow and develop is the most rewarding job that I have been lucky enough to have

think banks can actually do good. We can take capital from people who want to invest it and see it grow and give it to firms that need it to expand.

“If you do that well you can be a force for good in the economy, helping create jobs and opportunities.

“I’ve been a corporate banker all my life and helping companies grow and develop is the most rewarding job that I have been lucky enough to have. Santander gave me the

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opportunity and when I get to the end of my career I will be able to look back and say ‘you know what, I set up an SME bank from scratch with an old-fashioned philosophy at its heart.”

That’s the mix that Santander has brought to the sector – the resources that a big bank needs, but with long arms to match and a genuinely caring approach.

And when you have that as your day job, who cares about a few sniffles...? n

SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

The Crescent Hotel, Scarborough,

• Completed in December 2014 • 3 star town hotel • Grade II listed property overlooking Crescent Gardens • Santander acted for private owners, Paul and Lindsay Cooney, who acquired the hotel in 2002. Retirement sale after 12 years at the helm • 22 bedrooms with commercial and tourist trade • Sold for an undisclosed figure off an asking price of £975,000 • Acquired by The Bloomsbury Property Company (Scarborough) Limited, led by Sadie Shard

HOTELS POINT TO RECOVERY Mike Hughes talks to Andy King of Santander and Andrew Pratt of Colliers about the hotels market A new investor or developer will often look at the crane count for his earliest idea of how a region is faring. But those in the know will also be looking at the hotels. Occupancy rates and revenue per room are strong indicators of how a region is growing, and the booming sector has made the hotels market a big target for investors. Andy King, a Business Development Director with Santander, says Yorkshire’s high profile is fuelling the surge.

“You only have to look back to last year and how much popularity the Tour de France won

SPECIAL REPORT | SPRING 15

for Yorkshire. It shone a spotlight on the county and the leisure sector benefited.

“I remember the goodwill that was created by events like that which let people see Yorkshire in its splendour. Yorkshire becomes a destination seen by millions, and along with that tends to come an increase in hotel enquiries, guest houses, restaurants – the whole tourism, hospitality and leisure sector benefits – we want to ensure it is sustained.”

Santander handles it all like any enthusiastic, but sensible, investor. It’s certainly hot, but not

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every hotel in every location will be snapped up, as Andy explains.

“You have to be careful and acknowledge there are inconsistencies across the board between good and poor operators and certain regional hotspots.

“You will see rate differentials between, perhaps, Sheffield and York because York is an all-year round tourist destination.

“But Santander stands on very solid foundations and we have momentum to make a difference in many sectors. We are getting

SME BREAKTHROUGH

SPRING 15

The Best Western Cutlers Hotel, Sheffield

• Completed in December 2014 • 3 star city centre • Was in Administration – Santander acted for Administrators at FRP Advisory, Leeds • 45 bedrooms, close to the Crucible • Asking price £950,000 • Santander generated regional, national and international interest and multiple offers over the asking price.

• Sold for an undisclosed figure over asking price.

• The buyer is Greg Dyke, Chairman of the Football Association

People with high net worth are now seeing hotel development – or hotel assets – as a good investment both here and internationally Andy King

SME BREAKTHROUGH

Andrew Pratt

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INTERVIEW

introduced to more opportunities and because we are looking to grow, it makes sense for us to be looking for ambitious businesses.”

All investors want a return at some stage, so how does Andy and his team work out the investment strategy?

“We are looking for quality businesses who are aware of the potential cyclical changes in their sector and have a plan to deal with them. Whether that be by futureproofing the business, anticipating events and ensuring their business is scaled up to meet them or by investing in services that can flourish outside of the typical hotel resident for example, restaurants, bars, gym and spa facilities that can be used by local people.”

The fact that the hotels sector runs in parallel with the UK economy is, of course, no surprise to Andrew Pratt, associate director at Colliers International. With more than 16,000 colleagues in over 500 offices around the world, he knows a thing or two about hotels.

“The hotels market has been improving very much since the economic crisis and in the last 12 months all the indicators like occupancy rate and revenue per room have been going up.

“Before the crisis, there was corporate trade filling the hotel rooms, which was squeezed as business events fell, but it’s picking up again.”

“The investment comes from both existing chains wanting to add and from people outside the sector looking to diversify,” said Andrew.

“People are looking to buy a hotel and either run it under a brand management franchise or buy it already running as a safe investment.

“People with high net worth are now seeing hotel development – or hotel assets – as a good investment both here and internationally.

“It is also important to us that the global brand behind us allows us to sit on valuation panels for all the major lenders within the UK, while events like Santander’s Breakthrough in Leeds means I can connect with operators of hotels within areas that I value and let them know that we are on the ground in their region.”

Investing in Yorkshire is high on a lot of lists and those with the money to pump into the region will look at a number of factors before they make a decision.

Thankfully, thousands of visitors invest in a room for a couple of weeks to make their contribution as well. n

SPECIAL REPORT | SPRING 15

COMPANY PROFILE

SPRING 15

New Bond Court Grade A office space is snapped up Evans Property Group’s £25m Investment Transforms City Quarter Evans Property Group has achieved a host of lettings to both new and existing occupiers at its flagship Minerva office building in Leeds City Centre following refurbishment works forming part of a multi-million pound investment programme into the Bond Court area of the city. The deals mean that the remaining offices, which represent the highest quality, ready-to-occupy Grade A space within Leeds City Centre, are in supremely high demand. Since unveiling the refurbishment of the 30,568 sq ft of Grade A, BREEAM Excellent offices at Minerva last summer, high profile occupiers property firm BNP Paribas, global financial services company, UBS and law firm Gateley have all joined the tenant line-up. Existing occupier CDI AndersElite has also expanded into a larger suite to facilitate the firm’s expansion plans.

Minerva occupies a strategic location in the heart of Leeds City Centre backing on to Bond Court which connects the traditional business district with the new retail core of the city. Occupiers are taking advantage of the unique offer of Grade A quality and prime address, resulting in rapid lettings by office agents CBRE and JLL. The Evans Property Group is a long established private property investor and developer, with a property portfolio consisting of Grade A investment properties with secure long leases together with a substantial development land bank. Evans is a major investor in Leeds and the wider Yorkshire region and its recent transformation of Minerva, and also neighbouring office building Capitol, has created over 50,000 sq ft of much-needed Grade A office accommodation.

The investment into the offices forms part of Evans’ ongoing £25m programme of works transforming the whole Bond Court area of Leeds City Centre which will include a new 95 bed 5* hotel and extensive public realm works.

Alan Syers, Portfolio Director at Evans Property

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The current status of supply and demand means that the interest in the recently launched Capitol is also attracting significant interest and we are set to emulate the success of Minerva there

Group, said; “We were confident that the time was right to deliver this new Grade A space as supply is so severely limited in core locations within the city. We are delighted to have attracted and retained such high-profile occupiers and also with how quickly the space has been snapped up. The current status of supply and demand means that the interest in the recently launched Capitol is also attracting significant interest and we are set to emulate the success of Minerva there.”

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Minerva reception and offices, above and above left.

Capitol offices, above right

SME BREAKTHROUGH

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The building benefits from a stunning double height reception opening onto Bond Court, comfort cooling and a new look façade.

Suites available from 3,500 sq ft – 22,150 sq ft

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INSIGHT

SPRING 15

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

SPECIAL REPORT | SPRING 15

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SME BREAKTHROUGH

SME BREAKTHROUGH

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SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

THE £150M MAN WITH A PASSION FOR SMEs Mike Hughes gets an insight into the work of Darren Hart, head of growth capital at Santander Darren Hart’s impressive CV marks him out as a man with a deep experience of the banking sector generally and growth capital in particular: • Head of growth capital at Santander, October 2011 – Present • Head of risk & syndicate at Barclays Corporate, June 2010 – June 2011 • Head of debt & investments at Barclays Bank, May 2009 – August 2010 • Head of mezzanine at Barclays Leveraged Finance, December 2004 – April 2009.

In his latest role he has £200m to invest (actually, firms have already received £50m, so there’s £150m left in the pot) to help strong firms become powerful as part of Santander’s Breakthrough programme.

“Growth Capital is one of the pillars of Breakthrough,” explains Darren.

“We set it all up because we wanted to do even more for SMEs. They were telling us – and we had recognised this as well – that there was a funding gap between the likes of business angels and private equity.

“Angels are great for start-ups at a very early stage and then you get close to £1m turnover and really they’ve exhausted their resources.

Yet you can’t really go down the private equity route until you’ve probably got to about £10m, because on a pounds, shillings and pence basis it’s just not interesting enough.”

The European Commission’s definition of an SME goes up to 50m Euros turnover, so Darren’s team of 11 professionals is focussed on that whole market.

“There are alternatives like the Business Growth Fund and regional funds around, but

SPECIAL REPORT | SPRING 15

There is no painting by numbers approach any more. You have to get to know your customer they’re predominantly equity investors rather than lenders.

“We started out looking to support SMEs with an annual turnover of up to £10m, which we have now been able to increase to £50m.

If we were going to back a business, we set

26

out to get comfortable that there will be enough cash flow to service and repay the debt. For example, is there a product that has been launched and is being sold that is being provided on a regular basis, proving the concept and the market.”

Change is what keeps us all on our toes.

Approached in the right manner it can be exciting and a positive development of the work you are doing. So when Breakthrough broke through things became even more interesting for the manager and his 11 players.

He explains; “An old-fashioned way of a bank looking at a lending opportunity might be to think ‘right – what are the assets? Let’s go straight to the balance sheet, what are the premises worth, can we take a mortgage on them’ so that if things go wrong you have a chance of getting your money back.

“But that is very limiting in terms of what you can actually lend for – it has to be something physical. But a lot of firms today are assetlight. Their value isn’t necessarily in what they own and their growth aspirations aren’t going to be fulfilled by buying something.

“So the sort of things we want to facilitate are much more intangible, like sales and marketing campaigns, investment in new headcount, roll out strategies, overseas expansion and R&D. “The way that we have become comfortable in this new landscape is by looking very carefully at the cash flows and understanding every aspect of the business,” says Darren.

“We will look at the market, competitors, really getting under the skin of the business so that we get a sense that there will be cash

SME BREAKTHROUGH

SPRING 15

there to repay us – but over a period of time.

We will also price properly to reflect the risk, 10 per cent over Libor, which is a lot more than a conventional bank loan but less than going down the equity dilution route.

“If we can get an entrepreneur to the next funding stage while he or she is still owning 100% of their business, then that is a very successful job done for us.”

This new set of circumstances gives an added edge to the world of growth capital – and it’s going down well.

“There is no painting by numbers approach any more. You have to get to know your customer so you can advocate their plans in a compelling manner in front of risk colleagues.

“Now you start with a blank sheet of paper and say to the management team ‘right, what are your aspirations and how can we help you fulfil that potential.

“I had the great luxury of recruiting all my team from scratch and they have a broad range of backgrounds, from banking and

SME BREAKTHROUGH

The great joy for me is going out and meeting the firms, not staying in an office shuffling papers private equity to industry. We have to support our frontline relationship colleagues, so my model is to have people dotted around the country so that deals are run and looked after locally.”

Those deals are coming in from all sectors, which is rewarding and impressive for the people backing them. “There are winners all over,” says Darren. “We just have to find them and see how we can help.”

And he is, of course, finding them in great

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INTERVIEW

numbers in Yorkshire.

“The great joy for me and my team is going out and meeting the firms, not staying in an office shuffling papers. We want to walk around factories and offices and see what they are making. The businesses that I see are very dynamic and that passion rubs off.

“We have a lot of work in progress in Yorkshire – quite a concentration of really good prospects. And firms are returning to us for their next stage of funding. One of our Yorkshire clients is just going through its third round of financing, which says a lot for the region.”

This £150m man seems like a nice guy to have a beer with, which perhaps shows how far the sector has come while he has been a key player. It wasn’t too long ago that having a drink and a laugh with a growth capital expert might not have been at the top of everyone’s ‘to do’ list.

But times have changed. It’s your round, Darren. n

SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

BQ Yorkshire Editor Mike Hughes finds out what Innoventures are, from Santander’s Richard Brown

PAVING THE WAY FOR INNOVATION The Innoventures of Richard Brown might not seem like the most obvious Indiana Jones spin-off, but Richard’s work is certainly in the spotlight at the moment. Richard works with Santander’s new $100m Venture Capital fund, which provides Fin-Tech companies with much needed finance, as well as supporting the digital revolution to ensure Santander’s customers world-wide benefit from the latest know-how and innovations across the banking group’s geographies

SPECIAL REPORT | SPRING 15

Much of the fund’s investments will cover six core areas: • Digital delivery of financial services to reinforce distribution and the overall customer experience • Payments • Online lending using new data sources to provide better access to credit, including crowd and social funding • E-Financial investments – online systems to distribute financial investment products

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• Big data analytics – platforms to leverage information to provide better services to customers.

• Anti fraud But by its very nature, Fin-Tech funding has to be organic to grow with the market.

“We had noticed the venture capital community has been very interested in FinTech for a while, so setting up the fund was one of the bank’s responses under Santander CEO Ana Botin’s leadership to help the bank

SME BREAKTHROUGH

SPRING 15

INTERVIEW

I love to be involved with entrepreneurial businesses and this is a great position from which to help them

become more forward thinking by deploying and learning from innovation happening outside the bank,” says Richard.

“We are looking at businesses doing positive things in the financial services arena, businesses where we really think we can add value by enabling them to deliver something beneficial for our customers or businesses we can learn something from.”

The arrival of new sectors like Fin-Tech and their ability to hit the ground running are what

SME BREAKTHROUGH

keeps the finance firms buzzing. Trends can be a distraction and have a limited lifespan, but the ability to spot the stayers – and the agility to capitalise on them quickly and create a strong market from small beginnings – is constantly transforming the business landscape. It is almost as if the rise of the FinTech companies is not so much servicing a gap in the market as creating a gap that we didn’t realise was there. Entrepreneurialism doesn’t come much fresher than this.

For Richard, the desire to ride that wave is a personal and professional one.“From a personal point of view I am an enthusiast for innovation and see it as key for the future of financial services. I love to be involved with entrepreneurial businesses and this is a great position from which to help them.

“But there is also an extra dimension to having a fund that is part of a bank which ‘gets’ innovation and wants to extend the process.

The start-ups we have been working with are delighted with how the fund has acted as a catalyst, getting other parts of the bank working with and supporting their businesses” “There is a plugging of market gaps to some extent, to support customer groups who aren’t well served at the moment, but there is some terrific innovative thinking going on. I think it is coming in from all over, from universities to people who have worked in financial services and have seen something not being done very well and have a vision to change it.

“Also, you will get people coming in from outside of banking, who have a completely different take on things.

“This all means that while old methods still tend to be used alongside new methods, change will continue.”

A strong team is one of the first things a potential investor will look for in any sector, and Fin-Tech is no different.

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“It also needs to be a business that can grow to scale and one where we can be of material help over and above the equity investment.

For instance, which particular customer groups can we help them access – and where might they be?

“Tech is global and the UK regulatory framework, and the market, is a great place to build a Fin-Tech business. The framework is flexible and pretty big and there is a welcoming and high-quality regime to support it.”

This all seems very rosy and there is rightly a high degree of confidence that Yorkshire will be playing a key role. So are there any challenges looming? There is a long pause from Richard, suggesting that they are hard to find at this early stage.

“I truly think the UK is pretty well placed and we have the best chance we could have. Firms that want to grow should always think about how regulation is going to affect them now and in the future and that is something we can help with.”

In the near future, the fund will be announcing more transactions, Richard’s team will be built up and there will be more commercial engagement with the companies.

That internal collaboration between Innoventures and the main bank is an interesting one and illustrates both sides of the coin. It says clearly that the fund can be viewed as independent and can almost have a customer relationship with its own bank, but that also it has that wealth of knowledge and support behind it. Just as important to Richard and the team, when they agree an investment from the $100m, is that they engage with the bank’s other departments across the board, to see what more help and support can be gained. Everybody wins – which seems to be the motto of this lively and seemingly endless new sector. n

SPECIAL REPORT | SPRING 15

AS I SEE IT

SPRING 15

CITY AT THE HUB OF A NEW IDEA Tony MacDonald, Associate Director Inward Investment Development at Leeds and Partners, looks at the rise of Fin-Tech in Yorkshire George Osborne outlined the Government’s commitment to back Fin-Tech during March’s Budget and as part of this announced Leeds as the location for the first innovative finance hub. This decision makes sense.

Leeds is an innovative city, a hub for financial and professional services in the UK and the country’s number one banking centre outside of London. These facts combined with the region’s outstanding strengths in digital and technology mean we, as a City Region, are well placed to be the northern hub for financial technology.

The industry is already well established here, with a number of world leading Fin-Tech companies, for example TD Direct Invest, Tsys and The Test People, calling the region home.

These businesses tell us the reasons to locate here include good value office space, an available talented workforce as a result of the strong banking and financial services sector and the supportive eco-system that exists here.

SPECIAL REPORT | SPRING 15

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SPRING 15

It is crucial that the City Region continues to have a diversified economy and that all of our sectors push for growth both nationally and internationally In addition to being selected to be the first innovative finance hub, Innovate Finance, a Fin-Tech membership organisation based in London has also announced that it will launch its new regional programme in Leeds. These two announcements show the belief the industry and Government have in the City Region’s reputation and in what Leeds City Region Enterprise Partnership (the LEP) is doing to inspire growth in the Fin-Tech sphere.

Also, the DotForge initiative is a testament to the region’s growing reputation and the City’s belief in the enterprise and entrepreneurial nature that can be found here. I recently visited a Digital SME software development company in Dock St, Leeds (one of approx.

8,000 in the region) and was shown three in-house designed software products, two of which are commercial Fin-Tech offerings.

The challenge for companies such as this is ensuring the products come to market, as this results in business growth and job creation in the region. The arrival of DotForge will help facilitate this, accelerating the process and attracting further funding for Fin-Tech innovation.

But it is just one of many initiatives across the Leeds City Region, with Santander and Google among those recently announcing programmes to support digital development.

These announcements ensure innovation in the City Region is a truly exciting proposition, providing fantastic opportunities for new ideas and companies to start up and for existing business to diversify engage and reach out to a global market.

International professional services organisation, KPMG, is also throwing its weight behind Leeds, with a new 28.500sqft National Innovation & Solutions Centre. The

SME BREAKTHROUGH

new centre will house the firm’s world class team focused on sharing innovation insights and trialling new technologies, to enable Smart City development and technology start-ups to emerge and flourish.

Emergent technologies are disrupting the institutional status quo, providing new choices, and Leeds City Region is doing the same, with businesses and Government working together to provide a real alternative to London for businesses within the sector.

To ensure the vision is realised we need to make businesses aware of the opportunities and strengths of the region and inspire indigenous SMEs to engage with the Fin-Tech sector and realise the potential which it offers.

The sector is still in its infancy but as it grows so will its skills needs. In Leeds City Region there are a number of leading educational institutions and approximately 22,000 STEM graduates with particular strengths in Computer Science, Maths, Software Engineering and Data Analytics. As such there is a ready talent pool to meet the need of a skilled Fin-Tech workforce and by further collaborating businesses and universities can ensure that those graduates remain relevant to an industry that is developing rapidly.

The future of the region is bright and very much tied to growth.

Fin-Tech is one of many strands to this growth plan and although it offers an exciting opportunity, these businesses cannot and do not operate in a vacuum and need markets to engage with. Therefore it is crucial that the City Region continues to have a diversified economy and that all of our sectors push for growth both nationally and internationally.

The diversity of the economy includes offerings in retail, healthcare and manufacturing. n

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AS I SEE IT

Azzure aims high with its blue sky thinking The UK is the sixth best performing digital economy in Europe but South Yorkshire tech company Azzure IT is determined to push us firmly into number one spot.

In a recent report from the European Commission, the UK lagged behind Denmark, Sweden, Holland, Finland and Belgium on a number of factors including how businesses integrate digital technologies and how we perform in areas such as connectivity and internet use.

Azzure IT, a Microsoft Gold partner, helps businesses implement digital technology in order to improve business efficiency and productivity. Although only three years old, Azzure IT has made its impact specialising in end-to-end Microsoft Dynamics-based IT solutions.

“We work in key verticals such as manufacturing, supply chain distribution and professional services. Enterprise Resource Planning (ERP) software is transforming businesses who are openminded to change,” explained managing director and founder Craig Such.

“Technology is constantly advancing and businesses seeking to evolve and grow need to embrace new technology and understand how it benefits them.

“Using technology in a smart way translates into operational efficiency and generally leads to lower operating costs. Savings can then be redistributed to fund further growth.” Azzure IT launched with three employees, it now has 26 staff and plans to create a further 10 jobs in 2015.

“Our approach has differed from the start,” added Craig. “We help customers become more agile and accountable and customers’ growth is fuelling our growth.

“Our approach is being repaid with very high customer retention and businesses are increasingly coming to us to benefit from our extensive knowledge and expertise. As a Microsoft Gold Certified Partners we are seen as a highly accredited independent technical support provider.”

SPECIAL REPORT | SPRING 15

INSIGHT

SPRING 15

SMALL FIRMS THINK BIG Simon Williams, North Yorkshire Regional Chairman for the Federation of Small Businesses, says his members want to invest and recruit Confidence is growing among small and micro business owners in every sector, and in every nation and region of the UK. Our members want to invest more in their businesses, recruit more people and break into new markets.

Start-ups are being created at an all-time record rate, with more people choosing to be self-employed. We see more diversity among our ranks, with more women and young people setting up in business for the first time.

According to the first quarter results of the FSB’s Small Business Index, confidence in Yorkshire and Humber Business remains strong. Lower business costs and economic conditions are relieving pressure for firms, giving them the confidence to take on staff, make pay increases and access finance from their banks to invest in their business.

Businesses are increasing the number of people they are hiring, figures for the last three months show, twice as strong as 12 months ago. Many are also finally able to reward staff with improved pay, which the results suggest have been supported by rising productivity growth.

However, businesses continue to struggle with skills shortages. Thirty seven per cent tell us that employing someone with the right skills is a barrier for them to grow their business. And this is on the increase.

We want to see the next Government build on this confidence momentum and create conditions which promote further growth and rebalance the economy. It is important that a new Government follows through measures outlined in our Business Manifesto: a small business administration, reforming business rates, being strong on late payment, encouraging local procurement and lowering the cost of doing business.

In order to strengthen the Yorkshire economy

SPECIAL REPORT | SPRING 15

Tax dodgers targeted

in 2015, we need to look beyond isolated investment in our cities and principal towns.

We need to create thriving market towns and village centres as well. We need to provide a stable environment for small firms, with measures built for the long-term to provide the stability businesses require. Small businesses have a huge amount to offer. They are agile and create jobs faster and in larger numbers than any other organisations. And because they are the very fabric of our communities, helping small businesses helps society.

Finally, the FSB is looking forward to the Tour de Yorkshire showcasing more of Yorkshire’s towns and villages. We want more small businesses to benefit from this great sporting event – not just firms in the tourism and leisure sector, but also independent retailers, manufacturers and other producers. We hope the event will be truly ‘Made in Yorkshire’, which is why we’re calling on the organisers and local authorities to give local firms and producers priority for stall pitches and contracts. n

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A crisis of trust in big business is at the centre of concerns for SMEs, according to a recent survey. The Forum of Private Business polled 4,000 small and medium sized businesses, which revealed that 76% wanted punitive measures for those involved in abusive or excessive tax avoidance.

SMEs also experienced significant problems with late payment and almost the same number said they felt powerless to negotiate better terms.

The vast majority said late payment was a major problem.

The majority of SMEs polled (52%) said that in the face of supply chain abuse from big businesses, they would be forced to broaden their client base to minimise any future disruption to their cash flow. Phil Orford, Chief Executive of the FPB, said: “SMEs already unfairly disadvantaged by rising costs and red tape are held back from growing by bad business practices.

The findings confirm that the supply chain is fit to burst with hurdles and roadblocks that discriminate against small firms.

“Big business has all the aces, and it is time for affirmative action from the next Government to crack down further on this ethical deficit that threatens to break the backbone of British business – small businesses.

“Westminster is starting to listen. The Chancellor has answered our members’ calls for punitive measures for those involved in abusive or excessive tax avoidance, but there is still a lot more that the Government should do.”

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SPRING 15

INTERVIEW

A SUPERMAN TO TURN TO FOR GROWTH ADVICE BQ Yorkshire Editor Mike Hughes meets David Mitchell, of BHP Chartered Accountants

If David Mitchell was a superhero (and he may well be, juggling his day job with four kids, cricket, rugby, farming and gun dogs in partnership with his ‘very patient... very Scottish’ wife) then I would opt for GrowthMan. As Head of Consulting at BHP, he specialises in helping companies across the size range to grow, and is a leading light in the world of the growth chasm. He describes the chasm as “the step change required for companies to grow significantly from their current steady state.”

To drill down a little, David says the building blocks needed to construct a bridge across the chasm come under the headings of Strategy, Human Capital, Operations and Customer.

“It doesn’t matter what size the company is, but it will have made money,” he explains.

“In previous years there has almost certainly been a resistance to change because business owners have a perception of risk at the decision point. Their business might turn over £20m, make £2m, their pension probably isn’t brilliant and the age demographic is such that the kids might be coming to the end of school.

“So the decision is do I turn this into a £40m business to make £4m, do I take on some debt, do I set something up overseas, do I take over another business... all these challenges

come with increased risk.“ Sometimes it is easier to say, ‘no – I’m not going to do that’.”

Tackling that mindset and opening up the options is where David’s superhuman leadership skills are put to best use, addressing the skill-set of the board of directors and the owners and managers.

“It’s a bit like being at home and getting up half an hour early, throwing the duvet off yourself and leaping straight out of bed before you have to get up. Everything in your body screams at you to get back into bed – that extra job can always be done tomorrow.

“When we work with firms like that, we run a management academy where we challenge the team and take them through scenarios and let them know how they can grow the business in ways they haven’t done before.”

And the results are there to be examined: Four referrals a week from major clearing banks to support their customers’ growth aspirations; Client profits increased by an average of 66% in the last 12 months and the fact that 92% of BHP Consulting clients have already referred them to another established company.

“The entrepreneurial scene in Yorkshire is thriving,” says David. “But entrepreneurs by a certain characteristic which gives them an incredibly good skill-set.

It’s a bit like getting up half an hour early, throwing the duvet off and leaping out of bed before you have to get up. Everything in your body screams at you to get back into bed SME BREAKTHROUGH

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“But if a company is doubling its size, skills are going to be demanded in some areas that an entrepreneur doesn’t naturally have, which is where we can help.”

It’s that ‘natural’ quality that also helps pin down David Mitchell. His understanding of his market, his clients and where his work needs to be focused at any one time is organic and intuitive, which means fast reactions and a high percentage of hits for Yorkshire firms coming to him for growth solutions. n

INSIGHT

SPRING 15

ADVICE TO BANK ON

Lesley Batchelor, OBE, director general of the Institute of Export, says exporters must be wary of foreign currency rate fluctuations Before deciding to export, businesses should consider the basic costs incurred in not just supplying their products, but in preparing them, packing them and collecting payment – which will often be in a foreign currency.

With the continued instability of the global economy, the importance of would-be and existing exporters understanding the intricacies of trading in foreign currency has never been more critical. The pound’s recent rise to an eight year high against the Euro was warmly welcomed by holidaymakers keen to make their spending money stretch that bit further, but less so by exporters who faced losing customers because the strength of the pound made their products more expensive.

As most exporters know, one of the hardest things to get right is the price. There are many factors which need to be taken into account, some of which are predictable – such as customs duties and transportation costs, but others, including currency rates, which are not.

The latest currency rise was short-lived, with the value of the pound once again falling against most of the world’s major currencies.

However, this recent movement has provided exporters with a timely reminder of how fickle the currency markets can be. A major issue is that the buyer and the seller are operating in separate countries using different currencies. Payment is made in either of the currencies, or in a mutually agreed alternative currency. In times of stability, this works well, but since the crash in 2008, there has been a high level of uncertainty, which has in turn adversely affected the exchange rates.

This makes it difficult for exporters to work in absolute figures because the conversion rate between the two currencies can change significantly between the deal being agreed and the payment being received. Few firms have the financial provision in place to protect themselves against such exchange

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rate fluctuations, which is why we caution our members against entering new markets without ensuring that they have researched the financial resources available.

Organisations such as the Institute of Export (IOE), UK Export Finance (UKEF) and UK Trade and Investment (UKTI) have specialist advisers who can explain the complexities of currencies. Their advice varies depending on which countries the exporters are trading with.

For example, if a business is buying and using services as well as exporting primarily to the US, then it may be suggested that they open a US bank account and trade solely in US dollars. This has the added benefit of being preferred by US customers. However, it can prove difficult because US banks are reluctant to extend banking facilities for non-domiciliary customers. An alternative which works for many exporters is to open a foreign currency bank account with a UK based bank. This can be advantageous where the company purchases raw materials, components or goods and materials in the same currency that they sell in, as this allows them to use currency earned from sales to pay suppliers, removing

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the currency risk. If this is not the case, the issue and cost implications of converting the foreign currency to sterling will still remain, as will the risk of currency fluctuation. If the transaction is large enough your bank will work with you to produce an agreed price at which they will buy back the foreign currency you collect from your exports. This is the most efficient way to transact and allows your company to plan its finances easily. In most cases, you can also set an ‘OPTION’ to sell the currency which you can take up if you are uncertain of the buyer’s intentions. ​Most smaller companies use a foreign exchange boutique bureau who will set an agreed rate when you quote at the start of the sales process. They will also help with hedging strategies across the year – which will enable you to work in another currency with confidence. This technique allows you to quote at a price you know will achieve a profit, takes the stress out of trading in another currency – and ensures the customer understands what they are being charged.

This doesn’t always mean you can trade on the lowest price and exporters learn quickly that selling on price alone is a short term strategy.

Finally, for smaller values, the best way to ensure you maintain your price is to adopt a credit card facility. Although your customer is charged the rate of exchange on the day, it is fair and a lot less trouble than attempting the transaction without any back up at all.

The golden rule is ‘make it easy for your customer to do business with you’ and trading in their domestic currency is certainly easier for them. However these benefits for the clients come at a cost and it is crucial that any transaction fees and exchange risks are factored in to the final cost when providing quotes to customers.

Failure to do so could cost you dear – and that is something you can definitely bank on! n

SME BREAKTHROUGH

SPRING 15

COMPANY PROFILE

Forty years of helping businesses grow Access to finance is a subject that everyone seems to have a view on, but one thing is sure, the landscape has changed dramatically since the banking crisis and recession. Prospects for the UK economy in 2015 are certainly far better than in 2008 but many companies remain cautious about making large commitments and about their borrowing levels.

There is also a desire to investigate alternative sources of finance, an area that has expanded in recent years. Alternative lenders such as the peerto-peer market have become more prominent and equity or external shareholder finance is another option. Rightly or wrongly, traditional venture capital or private sometimes attracts a UKSE 170 xx 117mm Finance ad UKSE 170equity 117mm Finance ad reputation for being aggressive or of wanting significant control but not all equity investors

are alike. Raising amounts of say less than £1m subsidiary of Tata Steel the company invests in can be difficult but there are options. Private growing companies in the steel areas of the UK investors for instance can invest smaller amounts, and recently launched its Equity Growth Fund. The come in all shapes and sizes and can be accessed firm aims to help businesses grow and create more through various ‘business angel’ networks. Some jobs. Regional manager Keith Williams says: “Our companies or regional funds can also provide fund is aimed at growing companies, particularly equity based finance, acquiring a minority stake those creating jobs, needing finance of up to £1m and leaving management to get on with running to maximise expansion opportunities. Our finance their company. But what are the advantages of allows companies to undertake expansion projects equity or shareholder finance? Shareholders are that would not otherwise happen.” generally more committed to the business and you don’t need assets to pledge as security or collateral UKSE 170 x 117mm Finance in order to raise the finance.

Shareholders take ad Yorkshire:UKSE 170 x 117mm Finance ad Yorkshire 09/01/2015 11:51 P more risk than secured lenders and in return share in the benefits of success170 via dividends or capitalFinance Yorkshire:UKSE xx 117mm Yorkshire:UKSE 170 117mm Finance ad ad Yorkshire Yorkshire 09/01/2015 09/01/2015 11:51 11:51 P P EQUITY For more information visit growth. One such funder,new UK Steel Enterprise, GROWTH www.uksteelenterprise.co.uk is celebrating its 40th anniversary this year. A

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new new EQUITY EQUITY GROWTH GROWTH FUND FUND Realise the full potential of your business With Business Finance from UK Steel Enterprise We are passionate about regenerating local economies. We do this by supporting growing companies in a wide range of sectors to realise their full potential.

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Contact me, Keith Williams, for an informal chat about your development plans, and see how we can help you.

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With With Business Business Finance Finance from from UK UK Steel Steel Enterprise Enterprise We are passionate about regenerating We are passionate about regenerating local local economies. economies. We We do do this this by by supporting supporting growing growing companies companies in in a a wide wide range range of of sectors sectors to to realise realise their their full full potential. potential. If If you you are are looking looking for for finance finance to to help help you you grow grow your your business, business, get get in in touch. touch. We We will will look look at at your your business business plan plan and, and, ifif we we think think we we can can help, help, we we will will offer offer you you an an investment investment of of up up to to £1m. £1m. We We can can also also offer offer loans loans from from £25,000. £25,000. Contact Contact me, me, Keith Keith Williams, Williams, for for an an informal informal chat chat about your development plans, and see how we can help you. about your development plans, and see how we can help you.

Call: Call: 0114 0114 270 270 0933, 0933, or or email: email: keith@uksteelenterprise.co.uk keith@uksteelenterprise.co.uk The Innovation Centre, 217 The Innovation Centre, 217 Portobello, Portobello, Sheffield Sheffield S14DP S14DP www.uksteelenterprise.co.uk www.uksteelenterprise.co.uk

Realise the full potential of your business

With With Business Business Finance Finance from from UK UK Steel Steel Enterprise Enterprise The Innovation Centre, 217 Portobello, Sheffield S14DP www.uksteelenterprise.co.uk

We We do We are are passionate passionate about about regenerating regenerating local local economies. economies.

We do this this UK Steel Enterprise is a wholly-owned subsidiary of Tata Steel Europe by supporting growing companies in a wide range of sectors to by supporting growing companies in a wide range of sectors to realise realise their their full full potential. potential.

If If you you are are looking looking for for finance finance to to help help you you grow grow your your business, business, get get in in SME BREAKTHROUGH SPECIAL touch.

We will look at your business plan and, if we think we can touch. We will look at your business plan and, if we think we can REPORT | SPRING 15

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CASE STUDY

SPRING 15

Exports are driving record growth for meat alternative Quorn.

But how can it now move on from veggie favourite to a soughtafter brand for all?

Today, Quorn is a household name, even beating Heinz Ketchup and Doritos in a list of the UK’s biggest food brands back in 2013.

And where just a few products once sat in shops, a range of up to 150 is now available, with surging sales helping the company to achieve record growth last year at a time when most food manufacturers saw flat sales.

Much of this growth is down to Quorn’s successful export operation. The North Yorkshire company experienced surging sales in all 15 countries it directly supplies, with exports accounting for 19% of revenue.

“2014 was the year when we really started to realise Quorn’s potential for growth all over the world,” says Kevin Brennan, Quorn CEO. “For the first time in the company’s history, we achieved sales of over £150m. What’s more, an increasing number of carnivores are buying into our brand, now accounting for threequarters of our customer base.”

In particular, its US operation is seeing huge growth with like-for-like sales up 25% in the second half of 2014, rising to 48% in the final quarter. Much of this growth is down

SPECIAL REPORT | SPRING 15

QUORNERING THE MARKET WORLDWIDE

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CASE STUDY to Quorn creating its own stateside team at the beginning of 2014 in order to improve its access to the major distributors. Since then, the company has seen a massive lift in trading, ending the year with 30% more distribution.

After a trial with Walmart, the company quadrupled its distribution with the retail giant to the point where its products are now available in 2,300 stores across the country.

“Clearly the US is a market that offers massive potential for growth,” says Brennan, “and, on the back of an extremely positive 2014 which culminated in like-for-like sales growth of 88%, we’re aiming to create a stateside operation four times its current size by 2019.”

Elsewhere, Quorn recorded an 8.4% increase in like-for-like sales in Switzerland last year, while strong growth continued in the Nordics for the third year running, with sales volumes increasing by 5.5% over 2014.

“Following successful launches in Germany, Finland and Denmark last year, we’re also looking to expand into at least one new market in 2015 as we strive to create a $1bn business, four to five times its current size. After last year, we really are generating momentum towards this goal,” says Brennan.

According to Mr Brennan, the company’s commitment to understanding the needs of consumers all over the world, and adapting products where necessary to appeal to local tastes, is a big factor behind its success.

“We have continental style sausages developed for Germany, Holland and Switzerland and while lasagne sells all over the world, the American version has to have basil in it instead of oregano. And in Belgium the lasagne has to have a frill, otherwise it’s just not considered to be lasagne.

“In the US, the chicken style nuggets we sell are better than the competition, but we’ve had to darken the colour of our nuggets.

That’s because, where we sell them, if it’s not grilling season, it’s microwave season – they won’t turn an oven on – so our nuggets were coming out pale!”

Such attention to detail is already delivering strong results, and with £40m being invested over the next 12 months to deliver further growth and a host of new and exciting products set to be unveiled, 2015 looks like being a big year for Quorn. n

SPECIAL REPORT | SPRING 15

INSIGHT

SPRING 15

EMPLOYMENT IS ON THE RISE: LOOK AFTER THE STAFF YOU HAVE In recent months, we have seen positivity in the jobs market; unemployment down, employment up. Whilst nobody is claiming the task is completed, the picture looks fairly rosy.

However, what does this mean for employers when it comes to staff retention?

A cynical boss might have sat back for the last couple of years and relied upon a slump in the jobs market to keep their best staff where they are. However, that mentality is a now a very risky mindset. Those who have failed to fully appreciate and value their staff, may come to regret it now that the improving economic climate is opening doors for good people.

Nobody likes to feel taken for granted, so if there is a danger staff feel this way, it is time for a change of mindset and positive action.

Good employee engagement leads to better retention, reducing the costs and time involved having to recruit and train new people. Getting employee engagement right is about ensuring

SPECIAL REPORT | SPRING 15

workers feel they are involved and recognised members of an effective team, that they are given opportunities to learn and develop. It means helping them to be happy and welltreated at work; that when they raise issues, they are listened to.

There should be regular communication about the performance of the individual and the company, illustrating the presence of credible leaders who care and inspire them. As well as staff retention, this creates a more positive workforce and increased output. As the economy improves and the jobs market grows, a good employer is one who not only looks at the people they can bring in, but cares about keeping the ones they already have. If they don’t, someone else will. A similar situation arises for employers in businesses, that have recently gone through a buyout. Unless the acquiring company is coming in simply to assetstrip a business, a new owner is buying the

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people as much as it is the bricks and mortar and hardware of a company. In the majority of businesses, it is the people who drive the success that has probably been the attraction of that particular acquisition.

However, a change of ownership can often bring about a change of ethos, and this is something that can easily upset the workforce.

For example, the acquired business may have thrived because the employees responded to a values-driven environment, and a change to working practices being directed solely by financial targets could prove costly.

Yes, most people are in business to make money, and there is no reason that “profit” should be a dirty word.

However, a shift in the balance between carrot and stick can change how staff feel about where they work and how they perform.

The nurture element of the acquired regime may have led to a happy workforce, willing to go the extra mile. It may also have led to sales of additional services or products.

All of this could be a major contributing factor to the company’s success. A switch to a regime which drives employees solely through the enforcement of targets can see enthusiasm replaced with fear, negating all of the good employee engagement that had driven success in the past. Often, it can simply be the uncertainty of change, which can negatively affect the workforce. At this point, the importance of communication with the workforce cannot be understated. It can be the difference between employees buying into the changes and feeling alienated. Good communication is one of the driving forces of good employee engagement. It is at the heart of understanding what it is that a business is trying to achieve, and of having confidence in the performance of the company, which in turn ensures the staff feel like they are an important part of what is happening. Failure to engage correctly at such times could turn a good acquisition into a bad one, by impacting negatively upon one of the biggest assets any business has to offer. n Sue Alderson is a director of Azure Consulting, a Yorkshire-based specialist in leadership development. www.azure-consulting.co.uk.

01924 385600. Twitter: azureconsult

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INTERVIEW

TIME TO ‘CRACK ON’ Mike Hughes meets a man who has perfected the art of balancing global and regional demands – Grant Thornton’s Andy Wood Global firms with a base in Yorkshire face quite a challenge.

They need the global footprint to bring experience and expertise, and to prove a certain level of success that will be attractive to their clients, but that almost needs to be overshadowed by their regional clout.

Giants like Grant Thornton need an impressive sense of balance to get it right. That footprint needs to stride across continents in one moment and leave a lasting impression in Halifax in the next.

With that aim, Andy Wood is the not-so-secret weapon for GT. After three years leading the audit team for RSM Robson Rhodes in Leeds, Andy has spent the last seven with GT, now as practice leader for the Leeds and Newcastle operations. Add a Bradford University education and a role as a parent governor at Burley Oaks Primary School in Wharfedale and it seems Andy is straight out of central casting.

“I have been an audit partner for 12 years, with most of that time spent in Leeds. My job is to lead our firm to growth in the region, through the growth of our clients and our market share,” explains Andy.

“But that also means the growth of our people across all our offices so we can work with a range of businesses across all sectors.”

The keyword is confidence – how to get it, keep it, grow it and understand why there is quite a bit of it about in Yorkshire. For Andy it is dominating the work GT is doing.

“Confidence is back – which means our client base is more stable than it has been since the crash. There is confidence to spend money in terms of hiring, M&A activity or acquiring plant and machinery,” says Andy.

“For a business like ours that creates opportunity, because there has been pent-up energy for a number of years now with people

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sitting on their proverbial hands because they have been hanging on for the right circumstances to make the next big decision.

“But now they are thinking this is as good as it has been for a number of years, it may not get better than this for a while, so let’s crack on.”

If I was CEO Scott Barnes (or Sacha Romanovitch from June) I might have that printed out neatly (could I suggest 200pt Myriad Bold?) and displayed as the new company motto – We’re Grant Thornton. Let’s crack on. GT has certainly been pushing its brand over the last few years, and Andy says awareness of the firm and what it does is as high as it has ever been, which has been good for attracting school-leavers and graduates to start their careers there.

As you would expect, the day-to-day processes for Andy’s team change as the economy shifts, but there are no quiet times.

“As some parts of the business change, it gives us a chance to give some of our talented

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people opportunities in more sectors like reorganisation or forensic accounting where there has been more need.

“We have also been able to make niche acquisitions as a business in particular sectors and geographies. For example there has been a fairly heavy investment in financial services.”

This rolling evolution is what has helped Grant Thornton keep its balance, while the core demands remain.

“People come to us because they want help to unlock their potential for growth and they are looking for a business like ours to help with acquisitions, M&A or whatever it is that suits their needs.

“Companies across Yorkshire know how they want to grow, but we have the experience of doing it and can offer that insight and clarity and give the support and connections they need. The coaching we can offer is really important and can bring people together to share an opportunity or experience.”

Here comes that balance again. There are major issues on top of Grant Thornton’s in-tray, not least the opening up of the audit market with the introduction of the ten-year tendering process, but Andy and his team are still meeting businesses five days a week and finding enough lightbulb moments to power an office block and he can’t stop enjoying it.

“There is still real entrepreneurial spirit in Yorkshire. We work with some fantastically talented charismatic entrepreneurs in growing areas like technology and we enjoy working with people like that – it’s an exciting time.

“If you walk into the city for an event the bars and restaurants are packed and there are cranes everywhere building new offices and residential towers. There is a real buzz and long may it continue.”

Hear, hear. Well said Andy. n

SPECIAL REPORT | SPRING 15

CAIN ABLE TO KEEP FINANCE FLOWING

SPECIAL REPORT | SPRING 15

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SME BREAKTHROUGH

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CASE STUDY

Mike Hughes enjoys a refreshing glass or two with Harrogate Spring Water MD James Cain James Cain’s core product has been around since... well, the dawn of time. But strictly speaking, the discovery of Harrogate’s first mineral spring puts more of a precise date on it – 1571. After that, the town became the first spa destination and in 1740, it became the birthplace of bottled water.

“Our own journey started in 2002, when we were awarded a licence to re-start the bottling of waters from Harrogate,” said James.

“We certainly feel a responsibility and take pride in our role. In the early days we were trying to grow a brand and weather the credit crunch and the environmental backlash being faced by the bottled water industry – they were tough years.

“But we were quickly recognised for having water of exceptional quality and in 2003 were awarded the ‘world’s best sparkling water.’ We started to make a name for ourselves amongst food service and slowly gained momentum.”

In 2012 the firm realised they were nearing capacity and needed to reinvest significantly in order to continue the journey.

“The challenges in maintaining our continued journey were multi-faceted. We had to pull together many complex and different strands for growth simultaneously; namely, securing planning, securing additional power, securing an additional water source and investing in new equipment.

“Without securing the right finance streams, any business model is flawed, so for Harrogate Water Brands, finding the right financing has been vital. It’s a business’ lifeline and securing the right partner that understands your business and your aspirations is paramount. Santander continue to support and demonstrate their conviction in what we are doing.”

James and his company are now in a confident position and are planning for the future.

“Our sales in 2014 were over 100 million units – we now have the ability to more than triple this. We have future-proofed this business

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and now have one of the most technologically advanced bottling machines in the world, housed in a new 20,000 square foot production building, with additional power and water of exceptional quality secured.”

That quality is obviously being recognised in all the right places, as the official water of Yorkshire cricket, England cricket, Ascot and Royal Ascot. But James believes it all comes back to the team you build within your company.

“The steps a business takes in order to become a major brand has to begin with investing in people. A dedicated team, with a shared vision and clear strategy; combined with effective communication.

“I feel that I have always been fortunate with recruitment, though I know that comes from being fortunate enough to have worked with and for some fantastic, inspirational people throughout my career.

“I believe that having the ability to spot talent comes from having experience of what talent looks like. I enjoy finding talented people to complement our team. I take a lot much pride in having established what I believe is an

outstanding team at Harrogate.

“And that means my job remains exciting because I’m passionate about our business. I have a belief in our product, about what we do and our reasons for doing it. I really don’t see my passion diminishing! There’s certainly a lot you can do with water.”

Just as important as James’ successful team, is a successful region to use as a springboard.

“Yorkshire’s helped to put Harrogate on the map,” he says.

“A lot of our work is done in the city and it makes a refreshing change when people refer to Yorkshire. The Government’s reference to the northern powerhouse and Yorkshire generating more jobs than France, according to this year’s Budget, certainly helps resonate and has definitely raised the profile of our region.

“Now our five year plan is to continue to build the ‘Harrogate’ brand as well as continue to add to the £1.7million we have already raised for Pump Aid through our Thirsty Planet brand. Our vision is to continue to create jobs as well as raise awareness of our beautiful city.” n

A clear vision to protect the environment Like any responsible Yorkshire company, Harrogate spring water does its bit to look after the environment. Naturally sourced water has one of the lowest carbon footprints of any packaged drink. Every component that makes up Harrogate’s glass and PET bottles is 100% recyclable and they only use UK-produced sustainable raw materials. No waste goes to landfill sites.

Keeping water miles down is vital.

They work with local suppliers and hauliers to ensure effective national distribution whilst continuing to significantly reduce vehicle movements.

Vehicles carrying raw materials into a dedicated warehouse leave full of spring water to deliver to customers.

They aim to use the minimum amount of raw materials and look to ‘right-weight’, optimising light-weighting and ensuring package weight reduction, whilst maintaining the same characteristics and high performance.

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SPECIAL REPORT | SPRING 15

CASE STUDY

SPRING 15

A DREAM TEAM TO HAVE ON YOUR SIDE

BQ Editor Mike Hughes heads for Mazars to meet John Holroyd and Oliver Hoffman It’s a small point, but the fact that John Holroyd had Oliver Hoffman alongside him to talk about Mazars impressed me.

John is a partner, chartered accountant and chartered tax advisor whose portfolio includes manufacturing, property, retail and IT businesses. Impressive.

While managing partner Oliver is national head of corporate finance, advising on company sales, acquisitions, MBOs and finance raising. Again, impressive.

So to have both of them was a treat. Two key players for my Panini Fantasy Finance sticker album, but one theme: Confidence is back.

“The key-overriding comment we are hearing is that growth is firmly on our clients’ agenda” said Oliver.

“That is great to hear, because for a number of years the discussion has been about stability and shorter-term development rather than being concerned about longer-term growth.

“I think we can break that down into a lot of different areas. There is organic growth and development, recruitment plans and we get asked by a lot of clients about how they go about growing their core business and making it bigger, better and stronger in new product areas and new markets.

“There is also a focus on growth by acquisition, which is more where I come in.”John Holroyd’s pride in his team’s success – which grows into a confidence that businesses across Yorkshire are relieved to hear – is evident.

He tells me: “Over the last two years we have had quite a number of people who have asked us to find them a business to buy. To date we

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Key players: Oliver Hoffman and, opposite, John Holroyd have a 100 per cent success rate with that.

“We have helped clients in the UK and overseas find new markets geographically, not just new product markets. In the UK, this growth has more been in new product areas.

Thankfully, this success comes from this blend being created.”

That blend must also contain transparency, with tax issues hitting the headlines recently.

Mazars has launched a global initiative to help restore trust between business and society.

Business for Good looks at issues such as diversity, innovation and tax transparency.

“The key question we hear is ‘what would you do if you were me?’. Our clients look for honesty and transparency, which is very high on our agenda and on theirs,” said John.

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“People don’t want to get on the wrong side of the taxman. They want to take advantage of the appropriate means of manipulating their tax – clearly within the law.

“We have had a tax transparency initiative in place for the last few years, letting people see the benefits of proper tax planning early on.”

From my viewpoint, the combination of confidence across Yorkshire businesses based on the continuing steady recovery, a history of innovation and the soaring approachability of leading figures in the finance sector has attached a turbo to the region’s engine. Soon we will be able to put our foot down hard on the accelerator, all the time keeping that engine regularly fuelled and maintained.

Oliver agrees that there is a growing regional power at work.

“The North’s businesses have been pretty resilient and remain entrepreneurial, which means they can find opportunities in bad times and opportunities in good times.

“We are entering good times and certainly our clients are taking the North in some different directions and are very open-minded about what the opportunities might be. Our job is to take ideas to clients about development as well as acquisitions. ”One thing that keeps the region strong is that we find there is a commonality of vision between our clients in marketplaces and products.”

John has also been reading the runes, particularly the ones with R&D in them.

“We are helping a lot of people with research and development plans, which obviously can lead to future increased profits.

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SPRING 15

HMRC’s own stats show that only one third of those eligible for R&D grants apply for them, so we are getting a lot of new business helping those firms fund their growth plan and new ventures.

“Another area of growth for me is working with people who are thinking of leaving their employment and setting out on their own.

They are telling me this is the right time to make the jump.”

Oliver puts this down to an increased level of certainty and positivity. Even with an election just a few days away, that return of confidence is a driving force.

“Looking back to the last election, there were a lot of businesses putting things on hold.

But there has been a lot less of that now. The right messages are coming out in the local marketplace and centrally and it gives people a spark to think ‘right – this is my time’.”

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That local and central mix is a big part of Mazars, but from their role as principal partners with Yorkshire County Cricket Club to Community Days and the Mazars Charitable Trust, they are Yorkshire through and through.

John says: “The vast majority of our clients are Yorkshire-based and a key thing is to make sure that people like Oliver and myself and our other colleagues have got availability. Either over the phone or face to face we have to be

CASE STUDY

able to respond quickly.

“We want to be working with our clients at ‘the coalface’. That’s the fun of it.

“If someone trusts you enough to ask you for help, that’s great – an absolute privilege.”

That trust builds businesses, both for the clients and for the advisers, and while the people at the top of Yorkshire’s financial ladder believe their job is a privilege – Yorkshire businesses will trust them as well. n

We want to be working with our clients at ‘the coalface’. That’s the fun of it.

If someone trusts you enough to ask you for help, that’s great – an absolute privilege

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SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

Steve Foster likes blood. Particularly alien blood.

That ‘thirst’ epitomises what must surely be the ultimate in diversification at Vickers Labs in Pudsey, where he is MD, from chemicals, packing and logistics to special effects.

“We’ve been around for 30 plus years,” said Steve, “and have moved from a specialist chemical company to one helping companies who aren’t chemicals companies but who use chemicals as part of their processes. So a contact lens manufacturer might take a certain mix of liquids and polymerize them into a plastic. The chemicals are central to their process, but their core product skills are in engineering, making the kit to form the lens.

“We try to get involved in their processes early on and work with them. Most want quality, delivery and a good price.”

That close working relationship seems to be a key reason for the Vickers success, leading to a turnover of just over £3million. For a chemicalscentric firm, they have discovered that a very human formula works with their customers.

But that will always have to be backed by skills that can be trusted from the first contact and grown as the companies develop together.

“Skills are hugely important to us,” said Steve. “We are masters of a whole set of skills here. Because that enables us to produce a broad range of products. A customer might come to us for a bottle of something pretty straightforward, but then they will say ‘while we’re here... can you mix this, or make some of that for us...’

“A lot of what we do isn’t very technical, but it needs to be done correctly and be reproducible.

We can deal with the small volume stuff that the bigger players aren’t interested in or aren’t set up to handle, which gives us more and more opportunities to develop those relationships,” said Steve.

So, what about the blood? And the snow?

And the chocolate? Those particular relationships came when Vickers chemicals expertise was called on to make special effects blood (its a blend of what is essentially thickened water mixed with Steve’s former skills in the pigment industry) for Ridley Scott’s 2001 film Black Hawk Down.

Steve takes up the script from there: “Having

SPECIAL REPORT | SPRING 15

THE RIGHT CHEMISTRY FOR SUCCESS BQ Yorkshire Editor Mike Hughes talks blood and glory with Steve Foster, MD at Vickers Laboratories Ltd made some good contacts from that project, in 2004 we got the job of supplying a million litres of chocolate river for Johnny Depp’s Charlie and the Chocolate Factory, which obviously had to be safe for the environment and the actors.

“When that order landed, we set up shop in the car park at Pinewood Studios to keep the production line rolling. It turned out to be an astronomical quantity and was our big break.

“Since then we have done stuff for Snow White and the Huntsman, and we are now doing alien blood for film and TV projects.”

Alien blood, in case you were wondering, is blacker, which means that the PG certificate is easier to obtain.

“You can slaughter as many things as you like, as long as there is black blood coming out of them,” says Steve, adding to my list of quotes I never thought I would hear.

He then adds another gem...”We got the details on Monday and by Thursday it was being squirted into a famous actor’s face.”

Another day at the office for Steve and the Vickers team, but again, a reminder that there is no end to the skills and ingenuity on show across Yorkshire. Set a challenge, however wild you think you can go, and someone in Yorkshire can do it. That’s a powerful mindset and if there is conviction behind it, the horizons are endless. But there is also a level-headed approach at Vickers and – making the most of

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their 30 staff – an agility that those larger firms will envy. The Vickers formula led to the firm having the confidence for bricks and mortar growth, which is where Santander got involved.

“Packaging can be the bane or our lives, so we needed more space and a building became available about 30 metres from us. We decided to have it and then decide what to do with it, perhaps just rack it out for storage.

In the end, they built a secure and clean building within the building and used it for production of the contact lens monomer as well as storage, with an inbuilt capacity for more of the year-on-year growth they have experienced since the MBO four years ago.

Steve says: “There comes a time when you have to spend a bit of money and take a few risks in life”. Coupled with a pro-active approach from Santander, the company is moving ahead again. And the strength of the region is helping. Vickers was set up by a Yorkshire family and the continuing march of the manufacturing sector – particularly the smaller specialists – means more customers.

As this magazine is showing, Vickers Labs is a commander in an army of Yorkshire SMEs fighting for the county. Their battles, planned from boardroom bunkers in numerous business parks, are not only for customers and income and pride, but for the right to be recognised as worthy of global applause and success. n

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We got the details on Monday and

by Thursday fake blood was being squirted into a famous actor’s face

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SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

JOHN IN POLE POSITION Mike Hughes listens to the viewpoint of John Flathers, Partner and Head of the Commercial Property department at Irwin Mitchell in Leeds

John Flathers is a voice of reason.

His mind switches into analytical mode in an instant, whether it is good news or bad. What are the implications, what do my clients need to know, how can we make the most of this?

So being busy in the world of real estate isn’t enough for John. He wants to know what comes next. When I suggest it must be a particularly vibrant sector at the moment he says: “It’s certainly busy, but I’ve detected a slight cooling in the market. Nothing dangerous or dramatic, but it’s certainly not as steady as it was in the run-up to Christmas.

“I’m getting this impression across the board.

Projects have continued running, but there is something that means it’s not quite as buoyant as you have just made out.”

I attempt to redeem myself by suggesting this might just be a natural plateau.

“There is that element to it, but I also think – and I never thought it would happen – the election has got some influence over this.

“I think people are holding back to see what happens to the likes of stamp duty. I think there is just a note of caution, with not as many deals coming in with immediate plans. A lot of clients are looking to do things going forwards, but it has not come on as a fast as we thought.”

Let me try to reach for the right metaphor here.... John is leading the field, a lap ahead of everyone else, but he senses a change in the weather, so he’s coming in to get the right tyres while he has the chance. He’s not the sort of sector driver to get caught out in the rain.

“The crane count is a very evident indicator, but these are projects which have been going on for some time and will be quite busy. There is new stuff coming in, but not quite at the same volume.” Evidently, John is not exactly putting his feet up and tuning into LinkedIn or Homes Under The Hammer to pass the time. He’s a busy chap, guiding a busy department.

“In the main, I manage a team and keep

SPECIAL REPORT | SPRING 15

things going, but I have to earn my corn like everyone else, so I still work pretty hard – bit of development, bit of property finance and a bit of the occupational lease stuff as well, working with companies taking new premises.

“Yorkshire is a busy part of the country for us – people are still working hard at their businesses and being very savvy about it.

“And personality and character are as

important as ever. There is a lot of competition out there, so you have to enjoy doing a deal because your clients are spending a lot of time and money with you.”

John leaves with two more bright notes – insolvency and land acquisition.

The first is noticeably quiet, which is not particularly good for firms who build their business around it, but is a good sign for the local economy. And people are still buying up land around Yorkshire. Again, the approach has subtly changed, from buying brownfield in case it comes in useful to buying with a bit more of an immediate idea for its use.

“The banks are still a way off doing a speculative loan on it, but buyers know they can move it forward a bit more quickly and that someone will eventually come in for it.”

Mixture. Balance. Blend. It doesn’t matter what you call it, it is the way forward for many Yorkshire institutions, either in their corporate strategies or personal views, and John Flathers’ mix of confidence and realism is welcome and powerful. n

Key facts from leading firm’s CV • Established in 1912 • One of the largest law firms in the UK with over 180 partners and over 900 associates, consultants, senior advisors and other fee earners • Employs over 2,300 people • National coverage through 10 offices (Birmingham, Bristol, Cambridge, Glasgow, Leeds, London, Manchester, Newcastle, Sheffield and Southampton) • Helped over 1 million clients with their legal needs since 1912 and continue to help thousands of people every year • Largest ‘full service’ law firm in the UK, providing a wide range of private client and business legal services to private individuals, businesses, charities, institutions and organisations • Independent registered charity, the Irwin Mitchell Charities Foundation (IMCF) has made over £1million of charitable donations since its formation • It generates 50,000 wills every year • Converted to a new corporate structure in May 2011, with Equity Partners becoming Members of a new holding company

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SME BREAKTHROUGH

SPRING 15

COMPANY PROFILE

Growth opportunities in the global economy With business optimism at its highest since the recession according to Grant Thornton’s latest quarterly confidence barometer, Andy Wood, practice leader for the firm’s Leeds office, takes a look at prospects for international trade “Our latest International Business Report (IBR) shows that as we head into 2015, business leaders are feeling more positive than at any time since 2007.

However, while overall confidence is growing, the recovery remains somewhat patchy with a number of recent economic, political and social issues adding a note of caution. In Q4, our research showed global business optimism dropping eight percentage points to net 35% - while not great news, this compares with 27% year on year and gives further evidence of the unevenness of the worldwide recovery.

“In recent months, markets and investors have been unsettled by the headline catching 50% fall in the oil price, together with uncertainty in the eurozone due to Greece’s precarious situation, ongoing unrest in Ukraine and conflict in the Middle East. In addition, Italy is back in recession, the French economy is fairly stagnant and the recovery in Germany, Japan and Latin America has stalled. All of these factors are likely to have a negative pull on the UK’s current economic resurgence.

US DRIVING GLOBAL GROWTH “Nevertheless, for dynamic companies which are innovative, prospects are encouraging. The US economy remains strong with 2.7m new jobs in 2014 and growth of 3.3% forecast this year; and US consumer spending continues to drive the global economy. While the growth rate in China has slowed to 7.3%, this is still a healthy figure and it could be argued that the move away from investment towards consumption is a more sustainable strategy for long-term expansion. In India and Indonesia, we have seen more business friendly leaders elected; and in Africa there are indications of a transition from the commodity cycle and the emergence of more broad-based growth.

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“If you’re looking to expand overseas, detailed due diligence into choice of territories and route to market is vital - enlisting the help of a local adviser who can provide a real insight into the local market can be invaluable. There are many different ways of breaking into overseas markets and approaches often evolve as businesses grow in scale. The choice of territories to target should be influenced by the needs of clients – actual or potential, as well as the result of detailed analysis into each market. Businesses need to consider whether regions have an advantage to a particular sector, or industry, as well as whether the markets complement the domestic market and what legislation or regulation exists.

If you’re looking to expand overseas, detailed due diligence into choice of territories and route to market is vital enlisting the help of a local adviser who can provide a real insight into the local market can be invaluable

STRONG EXPORT EXPECTATIONS “Despite the patchiness of the worldwide recovery, generally, the outlook is better than it has been for the last eight years and UK businesses are in a strong position to take advantage of new market opportunities. International trade remains a key strategy for growth – in fact, 2014 was the strongest year for export expectations since 2007 with 20% of businesses expecting to see their overseas sales increase. When entering new markets and exploiting growth overseas, businesses must be bold, but mitigate risk by investing in extensive research and developing a carefully planned strategy for international expansion.”

“We are certainly seeing an extremely uneven recovery, however, there are definite growth opportunities for agile, entrepreneurial businesses that have vision and are prepared to make bold decisions. Whether it’s making an acquisition, launching a new product or entering a different market, the key to success, as ever, is sound planning.

For further information, contact Andy Wood at Grant Thornton on (0113) 245 5514

Andy Wood, practice leader for Grant Thornton in Leeds

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SPECIAL REPORT | SPRING 15

CASE STUDY

SPRING 15

FROM A STREET CART WITH DESIRE BQ Yorkshire Editor Mike Hughes pulls up a chair at the table of Kim Kaewkraikhot and Martin Stead

SPECIAL REPORT | SPRING 15

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SPRING 15

A wave of outstanding cooking and innovative chefs has helped change the face of cities and towns across Yorkshire.

It has made them destinations worthy of a decent drive and has spurred many development projects to cope with the influx of discerning diners.

The Thai Leisure Group, a group of restaurants and bars owned jointly by Kim Kaewkraikhot and Martin Stead, has certainly played its part.

The couple’s first restaurant in the Chaophraya chain opened in Leeds in 2004 and laid the foundations for another ten in Birmingham, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Aberdeen.

Kim started off cooking food on the streets of Bangkok and eventually opened up her own small restaurant in the city. Her food became well known in the local neighbourhood and her recipes, including her secret Pad Thai recipe, led to a number of awards.

When Martin, a UK entrepreneur, met Kim the recipe was perfected: to bring authentic Thai cuisine and hospitality to the UK. A multi-million pound investment from Santander has supported the expansion and also the roll out of the street-food brand, Thaikhun, which launched last summer and is proving hugely successful at Spinningfields in Manchester and Union Square in Aberdeen.

TLG will use the new funding to realise its plans to open a further five sites this year, six more throughout 2016 and up to eight in 2017. The first of these new openings will be in Oxford and Cambridge and the group’s ultimate aim is to push out in a form of ‘pincer movement’ towards London.

The business has reported like for like sales growth of 9% over the last year, with current turnover, annualised on existing sites of £26m and serving around 26,000 customers per week.

Martin said: “This is certainly an exciting time for Kim and I. Ten years ago we opened our first Chaophraya in Leeds, and here we are about to embark on the next stage of a thrilling journey. I feel we are well positioned in a market which is very buoyant. We have the right people in place and have now secured a significant investment, which places

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CASE STUDY

I never imagined I would come from a street cart to owning so many restaurants. I love what I do, I work with some amazing people, I’m proud of what I have achieved. It’s amazing…wow! us in a strong position to be able to push forward with new openings.”

For Kim, the dream is still as fresh as her first foray into the kitchen back in Thailand.

“I never once imagined that I would come from a street cart to owning so many restaurants, which cook for hundreds of regular customers. I love what I do, I work with some amazing people, I’m so proud of what I have achieved. It’s amazing…wow!”

Her ingredients for success, alongside an obvious passion and determination, drill deeply into her heritage and cover four Thai lessons that she has learned and is now passing on to her staff.

Ow Jai Sai – the family motto which is a Thai phrase meaning “care from the heart”.

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Samakee – working as a team, supporting one another, and using your initiative to make things happen.

Ha Dao – believing in and delivering a superb service to our guests, making them feel special.

Sanook – smiling, having fun, being your natural self. Kim and Martin will be well aware of the importance of balance to make the customer happy. A little too much of that, or not enough of something else, is as important in the market as it is on the table.

The restaurant sector is hugely rewarding, but challenging, with instant reviews of the product you have just made, but if Kim can keep her Thai heritage and standards at the top of the menu – look out London.... n

SPECIAL REPORT | SPRING 15

INTERVIEW

SPRING 15

Paddy Sturman makes me think the ‘M’ in SME could almost be the capital letter of Yorkshire.

Thousands of firms across the region are classed as SMEs, with so many in the Medium category as they establish themselves and look to people like Paddy’s firm, Gordons, to grow. Yet I would wager almost all of them aspire to break away from that heading and just be a ‘firm’. SMEs have a limit, and Paddy is well aware that these firms don’t want any limits. They know where they are now – we all have to start somewhere – but they’re from Yorkshire, so they want more.

“The market is changing in favour of the regional operations. There are increasing opportunities throughout Yorkshire for firms like ours to grow and get better quality work,” says Paddy, whose pedigree is pretty much spot-on: A Sheffield lad, educated at the local comp, then in Harrogate and now living in North Yorkshire.

“The simple truth is that we are always here with an office full of local knowledge. The

As well as the right intellect we are looking for that spark and ambition bigger firms inevitably get dragged away a lot more than we do and we also have the capacity for good team selection, so the banks that deal with us get the same people working with them.” You don’t have to be too quick off the mark to realise that one of Paddy’s specialties, Real Estate, is thriving at the moment. There must be a limit to how many cranes you can fit into one small area, but cities like Leeds are certainly pushing the boundaries to keep pace with the demand.

Paddy says: “Banks were struggling to lend money for property development during the recession, for obvious reasons, but there is a lot more of that happening now and also there are assets that are finally capable of refinancing to lift things out of the doldrums.

“To keep on top of the market, we make sure we have the right skills in place for any

SPECIAL REPORT | SPRING 15

HELPING SMEs ACHIEVE MORE Mike Hughes talks apprentices, spark, ambition and capital letters with Paddy Sturman of Gordons law firm

situation. We have an apprenticeship scheme which looks at A-level leavers and bright fresh young people. If you have the right people with core skills it is a matter of keeping alive to where the market is going.

“We make a point of going around schools and making young people aware of the scheme. There is obviously a rigorous interview process, but as well as the right intellect we are looking for that spark and ambition.

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“I think if you get a student who says at 18 ‘I want to roll my sleeves up and join a firm’, then they are obviously not work-shy individuals. By wanting to take that step they tick all the boxes.” The whole region seems to be rolling its sleeves up at the moment, so Paddy’s office might be particularly busy for a while yet. But I don’t think he’ll mind that.

Remember, he’s from Sheffield, so he knows a bit about hard work. n

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