BQ North East Special Feature by We Are UMi

ENTREPRENEURS’ GUIDE TO FINANCE 24-page special feature

SPECIAL FEATURE

Funding an investment revolution

WELCOME bqlive.co.uk

How our region tackles new funding challenges with new solutions

14 HELPING THE C H I C L E T S F LY Natwest banks region’s start-ups

CONTENTS 03

BUSINESS UPDATE

THE GROW TH FUNDERS

THE FUTURE’S BRIGHT

TEAMWEAR TEAMWORK

Round-up of investment and funding news

How online investment is changing the landscape

Rolling out a new way to generate energy

New partnership brings in tall orders

Peter Jackson, BQ Editor

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Funding is the lifeblood of any business, providing it with working capital and investment for future growth. Growing businesses and entrepreneurs can find it particularly hard to raise the necessary finance, as they often lack the track record and credit rating to satisfy traditional lenders. This can be a more of a problem here in the North East, whose entrepreneurs are at a disadvantage compared to their counterparts in the South East, where much higher property prices can be used to secure greater funding. The problem is also more urgent in this region. The struggle to balance the Government’s books has meant a shrinking state and this hits the North East – with its reliance on public sector jobs – hard, increasing the importance of financing the private sector and the jobs it creates and sustains. In this BQ2 report we look at some recent developments in funding in the North East and some of the ways in which our businesses are finding the financial support to fuel their growth. We profile two businesses which have benefited from grants from the Let’s Grow programme, a delegated fund from the Regional Growth Fund, RGF, for the North East, administered by accountants and business advisers UNW and independent business services group BE Group. Even before its round of latest grants, Let’s Grow had been responsible for making £25.8m grants paid to 110 companies in the North East. This represented 101 projects fully completed, 2,870 jobs created or safeguarded (net of subsequent losses), of which 2,207 (77%) were new jobs. These grants had also resulted in £145m of private sector investment being leveraged. In the cast of Northern Clothing, as we describe in these pages, Let’s Grow provided funding for a business in a traditional sector, but which has an exciting new twist that promises to revive that industry in the region. With Big Solar, on the other hand, a Let’s Grow grant is backing new technology, which is potentially world changing and which could – if commercially viable – bring the North East a new industrial sector of global significance. New market conditions and the digital age have given rise to new ways of bringing together entrepreneurs and investors with a minimal involvement for middlemen and, in Growth Funders, the North East has its own platform, as we learn in an interview with its chief operating officer Craig Peterson. Time will tell whether this model will prove sustainable but the early signs are encouraging. The rise of new forms of funding doesn’t mean that the banks aren’t providing finance. As we also see, NatWest is bringing its exciting Entrepreneurial Spark initiative to the North East to give our ambitious entrepreneurs a lift. So, while it’s undeniable that the credit crunch threw up many challenges, it also – at least here in the North East – has given rise to some innovative solutions.

BQ LIVE

“In this BQ2 report we look at some recent developments in funding in the North East and some of the ways in which our businesses are finding the financial support to fuel their growth”

BUSINESS UPDATE Palatine takes Verdant stake Verdant Leisure, which operates Riverside holiday park at Wooler and three parks in Southern Scotland, has undergone a secondary buyout, this time by Palatine Private Equity. Palatine, with a majority stake, will work alongside the existing management to achieve further growth. The deal provides an exit for RJD Partners, which backed the original buyout. Verdant acquired Riverside in 2012. Founded in 2005, Palatine Private Equity is an entrepreneurial, partner-led private equity business focused on backing like-minded people in the regional lower middle market. It operates from Manchester and Birmingham. Its partners have worked for more than 60 years with entrepreneurs and management teams in private equity backed businesses.

Blue Water Energy buys px Private equity firm Blue Water Energy (BWE) has taken a controlling stake in Stocktonheadquartered energy, engineering and

process industries business px Group. Blue Water Energy LLP is a private equity firm investing exclusively in the energy sector with a focus on middle market energy. Blue Water Energy LLP currently manages and advises its fund, Blue Water Energy Fund LLP, with a total capital commitment of US$861m. The investment provides px Group with access to capital for further investment, with the company having enjoyed significant growth in recent years. The management team, headed by chief executive Ian Clifford, all other px staff and operations throughout the UK and abroad, will continue unaltered. With more than 400 employees, px provides operations and maintenance, engineering and energy, trading and management services to owners of large-scale energy and process infrastructure in the European market. Its customers include energy and utility companies, financial investors and governmental authorities. Clifford said: “We are delighted to have secured the backing of BWE at a time of tremendous potential for the company. There is an excellent fit between our business strategy and BWE’s expertise and investment model. This support will significantly enhance our ability to take advantage of opportunities available in the

Riverside holiday park, Wooler

current market.” Graeme Sword, partner at BWE, said: “We expect a significant transition in the ownership of midstream and power generation assets across Europe over the coming years. px’s track record in operating high complexity energy assets, its customerfocused and flexible commercial strategy and its fully integrated service offering well place the company to be a significant participant in the independent energy sector as the size of the market increases.” Christopher Picotte, who took an equity stake in the px Group in 2013, will remain as non-executive chairman and is co-investing with BWE. Newcastle-based Square One Law advised Blue Water Energy on the transaction with a team led by James Bryce and including corporate partner Mark Lazenby, senior associates John Hammill and Marie-Louise Bozonet and associates Ashraf Ali and Lucy Bailey. James Bryce, partner at Square One Law, said: “It was fantastic to work with the Blue Water team on what was a very rewarding project and a great transaction for the region. Inward investment of this kind into the region is a sign of confidence in both the oil & gas market and the North East’s ability to deliver world class engineering and support services.”

BUSINESS UPDATE bqlive.co.uk/breakfast

New support for start-ups

Dean Rae of PMS, Chris Parker of NEL and Tony Morrison of PMS

Investment funds PMS growth A firm which manages home emergency property insurance claims is putting expansion plans into action with the help of a £175,000 investment. Preferred Management Solutions (PMS) is a full-service reactive maintenance and building services company, and works with property management businesses, insurance firms, individual landlords and large plcs to fulfil both planned and emergency property repair contracts across the UK. The Hebburn-headquartered firm, which also has offices in London, Leicester and Bradford, is investing in an upgraded bespoke job management system after working with regional fund management firm NEL Fund Managers to access funds from the Finance For Business North East Growth Fund. The new technology will enable PMS to fulfil repair contracts with greater efficiency and speed, and will provide the capacity it requires to build on the 500 jobs it currently manages every week. Six new North East jobs are expected to follow in the coming months, taking the total PMS team up to 32, and at least 14 more are planned to have been created by 2018. Tony Morrison, operations director at PMS, said: “We’ve built up a strong reputation in our industry and already work for a roster of impressive names, and the investments we’re making in further improving how we manage, monitor and deliver our services gives us the confidence and flexibility to take the business to the next level. The relationships we have across the industry are absolutely crucial when it comes to being considered for tender lists and contracts, and we’re working hard to strengthen the direct links we have with insurance firms, larger property management businesses and other specifiers. “We’ve already added to the team this year, and our expectations are that many more North East jobs will follow as our expansion plans are rolled out. The options offered by the Growth Fund fit well with our particular requirements, and the NEL team helped us crystallise our business planning around how we could best use it.” Established by holding fund manager North East Finance (NEF) in 2010, the £159.5m Finance for Business North East (FBNE) programme is a suite of seven venture capital and loan funds which provide investment for start-up and growing businesses in the North East of England. They will continue investing until 2016, and aim to support 950 companies and create or safeguard almost 10,000 jobs.

New North East start-ups financed by the Government-backed Start Up Loans programme are to receive extra support via small business network Enterprise Nation. All new Start Up Loans customers will receive free Enterprise Nation membership with access to its network of advisers, influencers and regional events aimed at developing their business. The deal offers an additional £330,000 worth of collective benefit for loan recipients. Emma Jones, Founder of Enterprise Nation, said: “Offering on-going early stage intervention has been shown to be the most effective way to create successful, sustainable businesses. “Access to our support network means Start Up Loans customers will be able to supplement the advice they receive from Start Up Loans delivery partners with the rich vein of on-demand help Enterprise Nation has developed across the UK, wherever they are. “We’ll also give them access to events and opportunities where they can speak to buyers, influencers and explore export opportunities in a meaningful way. We’re expecting to see an impressive influx of new firms take up the offer of advice.’’ The announcement comes after the Start Up Loans Company celebrated reaching 36,000 loans and £200m of lending, while delivering more than £3 in benefit to the economy for every £1 spent. Joanna Hill, chief commercial officer at Start Up Loans, said: “We want to ensure the businesses we back have every possible chance of succeeding. “Our partnership with Enterprise Nation will bring valuable additional benefits to our customers, complementing our existing offering of free business support and mentoring. Enterprise Nation’s wealth of experience and established networks in the start-up arena will provide a fantastic asset for our customers.’’

“Offering on-going early stage intervention has been shown to be the most effective way to create successful, sustainable businesses”

PROFILE Tees Valley Business Compass

Investing in the North East economy A fund which has already invested more than £58million into the North East economy is inviting applications from projects that have the potential to result in new jobs and economic growth in the region The North East Investment Fund, administered by the North East Local Enterprise Partnership (North East LEP), has already provided support to more than 20 schemes including the development of Stephenson Quarter in Newcastle city centre, Blyth Workspace in Northumberland and West Chirton North Industrial Estate in North Tyneside. Jeremy Middleton, Chair of the North East LEP’s Investment Panel, explains: “The North East Investment Fund exists to provide finance to projects which will result in a real boost to the region’s economy, whether that is via the creation of new jobs or through benefits to transport, connectivity and infrastructure. “It’s an evergreen fund, so once funded projects are completed and their loans are repaid, the money is re-invested into the fund and made available to support new schemes.” The Stephenson Quarter development in Newcastle – the largest regeneration project to take place in Newcastle for more than 10 years - will result in the creation of 2,000 jobs and a £100 million yearly contribution to the region’s economy once the project is completed. Phase one of the Stephenson Quarter development, which was supported by a £1.7million loan from the North East Investment Fund, included the completion of the 251 room Crowne Plaza Newcastle hotel, the adjacent multi-storey car park and The Rocket – a 35,000 square foot office building. Support from Newcastle City Council and the North East LEP enabled Clouston Group, the developer of the site, to agree funding deals with RBS, Aviva and Galliford Try Construction. Alan Schofield, financial director at Clouston Group, explained: “Funding support from the North East LEP helped create the private sector confidence required to unlock critical investment and drive forward the transformation of this important site.”

Alan Schofield, Financial Director at Clouston Group, outside the Crowne Plaza Newcastle hotel in Stephenson Quarter.

“The North East Investment Fund exists to provide finance to projects which will result in a real boost to the region’s economy.” In Northumberland, Blyth Workspace transformed a vacant plot into first-class contemporary managed offices and is now home to a range of North East companies which have moved into the 21,000 square feet of new office space. Cllr Dave Ledger, Arch Chair and Deputy Leader of Northumberland County Council said: “Working with the North East LEP and gaining support from the Investment Fund was pivotal in the success of Blyth Workspace. A year on from completion we’re in a fantastic position, seeing the various businesses located here flourishing and growing.” The completion of West Chirton North Industrial Estate resulted in the creation and safeguarding of jobs while the site itself has provided space for a range of growing companies including three start-ups. Gavin Cordwell-Smith is Chief Executive of the site developer, the Hellens Group. “Whilst we obtained a grant from the European Regional Development Fund, the development was only

able to proceed due to the loan we received from the North East LEP.” Jeremy Middleton said: “Ultimately, the fund is there to help support the North East LEP’s goal of creating new and better jobs for the region and achieving the economic potential of the region. “I strongly encourage people to take a look at the opportunities which are available through the North East Investment Fund and to consider how it can be used to make real improvements to the North East economy.” The North East Investment Fund is made up of monies from the Regional Growth Fund and Growing Places Fund.

More details on the North East Investment Fund and how to apply can be found on the North East LEP website, www.northeastlep.co.uk.

BUSINESS UPDATE bqlive.co.uk/breakfast

Spin out expert joins NVM

Rebecca Roberts, Northstar Ventures with Dale Knight, One Utility Bill

VC in £6m hunt for SMEs Venture capital firm Northstar Ventures is looking to invest £6m in North East businesses in 2016 from the Finance for Business North East Accelerator and Proof of Concept Funds. With offices in Newcastle and Darlington, the team at Northstar is looking for start-ups and SMEs operating in the region, or that are willing to relocate. Ian Richards, director at Northstar Ventures, said: “We have been partnering with North East SMEs for over a decade, and are pleased to be able to continue to do so with the £6m extension funds. “Whether you are a small team with ambitions to build disruptive tech solutions, or an established company that needs support to scale your operations, our team is able to provide both financial and business support.” One of the companies Northstar Ventures has supported in the past was utility bill start-up One Utility Bill. Chris Dawson, co-founder and chief executive, said: “We received a six-figure investment from Northstar Ventures in 2015. It allowed us to grow our company quickly, signing up new landlords and letting agencies to our shared bill paying platform. It also supported the creation of eight full time roles.”

NVM Private Equity (NVM) has appointed Charles Winward to its investment team where he will be responsible for sourcing, transacting and managing VCT investments. Winward was previously a director at IP Group plc, where he was the managing director of its fund management and advisory subsidiary. Over seven years at IP Group (during which time they moved from AIM to the FTSE 250), he helped create and develop several spin-out technology companies from university intellectual property, with notable successes being Tracsis plc (University of Leeds), Xeros Technology plc (University of Leeds), Boxarr Limited (Universities of Southampton and Bristol) and hVivo plc (University of London). Also he had responsibility for the IP Venture Fund, raising a second fund in 2012, and the North East Technology Fund. In his earlier career, Winward was a technology strategist for JP Morgan, and an officer in the Royal Navy. He holds an MBA from the University of California at Berkeley and a bachelor’s degree in Mechanical Engineering from the University of Bristol, and is a CFA Charterholder. Martin Green, managing partner of NVM said: “Charlie is a successful investment manager whose knowledge and experience in early stage companies will ensure NVM remains well positioned to deal with opportunities under the new VCT regulatory environment”. Charles Winward said: “I am delighted to be joining Martin and such an experienced team with a long-established, successful track record in value creation by backing promising companies across the regions of the UK and I look forward to making my first investments for NVM.”

£4m growth fund extension open for business NEL Fund Managers is inviting regional businesses to bid for an investment from a new £4m extension to the Finance For Business North East Growth Fund. Run by NEL Fund Managers, the Growth Fund is a general investment fund aimed at businesses at a development and growth stage based in the North East. Since the fund launched in early 2010, regional fund management firm NEL has made 126 investments from it with an average deal value of more than £200,000. It is now looking to make up to 15 further investments over the coming year of between £50,000 and £400,000. The total value of investments made by NEL from the Growth Fund passed the £25m mark at the beginning of this year, with around £5m of development capital provided by them to regional businesses during 2015. Yvonne Gale, chief executive at NEL, said: “The investments we make are designed to both create and sustain regional employment, as well as to encourage wealth creation and investment in our supply chain.” Having originally offered £20m of development capital, the value

of the Growth Fund was increased by an additional £3m in summer 2013 by North East Finance, the holding fund manager with overall responsibility for the Finance for Business North East initiative, and then by a further £3m at the start of last year. Colin Hewitt, partner and head of commercial at Ward Hadaway, who led the firm’s team advising North East Finance on the latest FBNE fund extension, said: “The Finance for Business North East fund has proven itself to be a vital part of business life in the region over the past six years, providing investment to over 850 companies, creating more than 6,000 jobs and attracting an extra £185m worth of investment into the region from other investors.’’

PROFILE Tees Valley Business Compass

SSI Task Force funding is delivering results The SSI Task Force funding schemes are delivering results – more than 70 new businesses have been helped to launch and more than 200 jobs have been created for former steelworkers Former SSI sub-contractor Dan Wilcox, 53, from Berwick Hills, is one of those who has taken advantage of the financial help and business support available as part of the Business Advice Start Up Fund. Dan has now launched his own business, Cleveland LGV Training Ltd, and he’s creating jobs for other redundant steel workers. Tapping into two strands of Task Force funding, Dan was able to register the company within a month of losing his job. In addition, his son-in-law, Matthew Switzer, joined the company as a partner investing some of his own money to help get the business up and running. The pair identified a gap in the market after discovering a three month waiting list for LGV lessons and tests in the North East. Keen to capitalise on what they saw was a niche in the market, they are now attracting interest from companies in Belgium, Holland and Sweden. The company has also secured a number of contracts with major local employers, including delivering JCB Bomag Ride on Roller training for PD Ports. Dan, who is operations and training director, is supported by former workers, Dave Thompson, 53, Derek Bailey, 56, and Jim Glew, 53 who will all deliver various LGV training including ADR Tuition (Dangerous Goods Training and DCPC (Driver Certificate For Professional Competence) which is a legal requirement for LGV drivers. Another enterprising former steelworker who used the funding to set up his own business is Andy Baker, 42, from Middlesbrough. Andy applied for the SSI Task Force Business Advice Start Up Fund and set up Velocity Sports Coaching. He said: “It was brilliant, it was very easy and I felt very supported by my mentor who helped me to develop my business plan. From

BAS Cleveland LGV Training Ltd

“The pair identified a gap in the market after discovering a three month waiting list for LGV lessons and tests in the North East” submitting the plan to receiving the grant it only took a week. I was amazed at how quickly it all worked. I’d certainly recommend the scheme to anyone it was first class.” Meanwhile more than 200 of those affected by the closure of SSI have been helped into new jobs. Keith Parry, from Middlesbrough, a former planning engineer in the power station at SSI UK, is one of the latest people to secure work thanks to the SSI Task Force Jobs and Skills Fund. The 55-year-old has joined Ventilation Hygiene Specialists, which provides ventilation hygiene, fire safety and air flow testing services, as a Maintenance Technician. Other companies helped to create new jobs include Francis Brown Ltd – who recruited three of those directly affected by the steelworks closure.

The SSI Task Force Jobs and Skills Fund subsidises the cost of employment for each new job created with a payment of 50% of the basic salary costs for the first two years, up to a maximum of £11,000 per employee. All new jobs have to be sustainable for a minimum period of two years. Even if companies have already recruited an individual affected by the SSI closure it’s not too late- there’s still time to apply and funding available.

More information on other support schemes available can be found at teesbusinesscompass.co.uk or call 01642 939386

INTERVIEW bqlive.co.uk

Who ya gonna call? GrowthFunders Turbulent times have thrown up different funding platforms and one in County Durham is making an impact, as Peter Jackson reports An investment revolution is underway with new players breaking new ground in a changing landscape. A number of factors have come together to create a perfect storm in funding and investment. The Lehman Brothers collapse in 2008 and the subsequent banking crisis and credit crunch meant that traditional sources of finance dried up for businesses seeking funding. Then, in the wake of the crisis, low interest rates meant punishingly low yields on many established investment vehicles. Just as businesses were seeking new sources of funding and investors were looking for alternative means of investment, in 2012 the Retail Distribution Review, RDR, made it uneconomic for IFAs to advise small investors. All this has been coupled with an accelerating digital revolution which has made easier a coming together of the business seeking funding and the investor, without the intermediaries, mystique and expense which might have got in the way in the past. It is against this background that we have seen the rise of crowdfunding and co-investment funding. Among the new players in this emerging market is the County Durham based GrowthFunders, the online investment brand of Growth Capital Ventures, an FCA regulated company, launched in early 2015. Chief operating officer Craig Peterson

explains: “The online investment platform was launched for two reasons: firstly to help entrepreneurs and people developing projects to raise capital to deliver growth and impact in terms of job creation and wider social value. “On the flip side it was also developed to allow investors – retail investors and professional investors like business angels or venture capital funds – to co-invest to support the delivery and growth of those businesses and projects.’’ Growth Capital Ventures grew out of specialist regeneration consultancy Carlton and Co as an investment company and the online platform GrowthFunders was set up to widen participation. So far, Carlton and Co and Growth Capital Ventures online and offline has helped raise around £20m and, of this, in the 12 months of its existence, GrowthFunders has been responsible for some £700,000. “There are some sizeable deals in the pipeline which will take that up significantly,’’ says Peterson. Funds have been raised for sectors including

housing, software, finance, energy and property and sums raised range from £20,000 to £250,000 and now Growth Funders has some 15 people working for it, of whom six are directly employed at its Aycliffe Business Park base. One of its most notable successes has been Hive.HR, which was spun out of Stocktonbased Visualsoft last December, as a Cloudbased application to allow businesses to understand, measure and improve employee engagement through the use of a weekly anonymous feedback system. The investment target was £150,000 but, through Growth Funders, £297,900 was raised from two professional investors and 37 online investors. This is a good illustration of the way Growth Funders works. Peterson says: “Visualsoft came to us with their business, Hive.HR. We sat down with them and we looked at what the business was and asked them to take us through the business plan and business model. “We wanted to assess: what’s the growth potential and what’s the potential for

“The investment target was £150,000 but, through Growth Funders, £297,900 was raised from two professional investors and 37 online investors”

INTERVIEW bqlive.co.uk

“On the flip side it was also developed to allow investors – retail investors and professional investors like business angels or venture capital funds – to co-invest to support the delivery and growth of those businesses and projects’’

INTERVIEW bqlive.co.uk

positive impact? If it ticks those two boxes then what we do is start to work with that company to develop their investment pitch, to take it online. With Hive we worked closely with the founder John Ryder to develop the investment memorandum, the investment business plan and financial forecasts. That was done by Carlton in association with John Ryder. “Then we check it all through for accuracy, fairness and transparency. Anything that’s going onto a platform like ours, because of the FCA authorisations, we have to check out thoroughly, and only when we are happy with everything the investment can go on the platform. So you have a video pitch, downloadable business plans, financials, the whole lot, which allows investors to go onto our platform and assess the investment and

“The alternative finance sector is growing at such a substantial rate and it has been enabled by technology and people’s different approach to investing” make an informed investment decision.’’ The platform gives the investor exposure to new asset classes and allows them potentially to earn greater returns than would be available elsewhere. GrowthFunders operates a nominee structure so that a nominee company holds the shares on behalf of the shareholders to avoid a company having the difficulty of managing a large and cumbersome shareholders’ register. This also makes future funding rounds easier. But is the shareholder’s investment safe in this nominee structure?

There is an ethical dimension to Growth Funders’ investments The website says: “We proactively engage with management teams on social and environmental issues, not just to mitigate risks but to identify impact investment opportunities that can create additional value and drive investment growth.’’ In the case of Newcastle-based Hive.HR the issue was employee engagement. Visualsoft recognised the importance of retaining high quality staff and therefore of employee engagement, which is how Hive.HR was developed. It saw then that the platform was scalable and could be commercialised. Hive.HR founder and managing director John Ryder says: “Employee disengagement is such a problem in the UK – a third of the workforce is disengaged. There’s a growing body of demonstrable evidence that all points to the fact that companies that are able to engage their workforces more effectively are more profitable. Companies with strong engagement score a total return to shareholders of 64%, compared with just 21% for companies with low levels of engagement. Engagement reduces absenteeism and sickness and increases innovation. “Your employees are one of your most important assets within the business. Hive gives you the opportunity to understand and measure engagement levels within your workforce and it does so in a common-sense agile way.’’ Hive HR believed the problem of disengagement was so widespread and would be so widely recognised that GrowthFunders would be a particularly appropriate way of raising funding. “We felt that we would be able to raise funding and be able to help create evangelists though the different people who got involved through GrowthFunders,’’ says Ryder. “We’ve got 39 investors and I consider each one of those investors as having the capability of being a route to market for us. They can evangelise and talk about Hive.HR to their contacts.’’ Raising funds can be a traumatic and arduous process. How was it with GrowthFunders? “I’m not sure raising funds is ever going to be easy,’’ says Ryder. “But the support and input and the connections that GrowthFunders have made have been massively critical to the whole process. The help they gave to get us investor ready was fantastic.’’

“Yes, because it’s a separate legal entity,’’ says Peterson. “No matter what happens, their shareholding is essentially safe within that nominee structure and they have full investor protection.’’ Once an investor has registered on the GrowthFunders’ website they are regularly notified of any forthcoming investment opportunities. Growth Funders’ next development will be to add secured bonds to its equity investments. These will allow lending to established businesses and asset backed projects with the loans secured on assets, giving a regular and predictable income return rather than the prospect of a capital gain. The bonds will be secured against commercial or residential property, sectors in which Carlton has long operated. Peterson predicts a likely annual return of between 6% and 10%. “We have been asked by investors to bring forward more deals like that and that’s something we’ve got in the pipeline,’’ he adds. Co-investment and crowd funding are currently proving popular for reasons already outlined, but is that popularity contingent on present circumstances and low rates of return from conventional investment routes? Will it prove a short-lived phenomenon? “The alternative finance sector is growing at such a substantial rate and it has been enabled by technology and people’s different approach to investing,’’ says Peterson. “In our view it’s here to stay. “Crowd funding is starting to come of age and our platform is very much a coinvestment platform and it’s there to facilitate co-investment between more investors, professional investors and venture capitalists and bring them together under one banner. What that means is that they can direct access to investment opportunities that might be outside of their reach. It provides a real opportunity to raise finance directly from those investors. “It’s that general marketplace model like eBay and it works very well.’’ n

PROFILE UNW

County Durham glazing company on course for impressive expansion Clayton Glass boosts turnover and job creation after Let’s Grow support and investment Major glazing manufacturer and supplier Clayton Glass has created 18 jobs as a result of moving premises and installing new equipment, with grant support from the Let’s Grow Regional Growth Fund. Clayton Glass secured a £300,000 grant from Let’s Grow at the end of 2014 and used the money as part of a total £3 million investment to expand the business. The company moved from its Tanfield Lea site to new facilities at the Harelaw Industrial Estate in Stanley. The grant also helped to pay for new equipment to increase efficiency and capacity at the new site, where Clayton makes sealed glass units for use in windows, doors and conservatories. The business has invested in two new insulating glass lines, two new cutting centres and a furnace used for toughening the products. Clayton Glass owner and managing director, Ryan Green, said: “We have created 18 extra jobs so far and our target is 38 over three years. We are ahead of the target based on our projections. “Let’s Grow helped to make the project feasible because otherwise we wouldn’t have been able to spend that volume of money in one go. We would have grown but more slowly; this allowed us to do it in one hit and reap the benefits.” Clayton Glass is the North’s biggest independent Insulated Glass Unit (IGU) supplier and a leading manufacturer of glass for conservatories and doors. It supplies directly to domestic window and conservatory installers and fabricators nationwide, with a core market in the North East. The company currently employs around 160 people and has a turnover of £15 million, which it is aiming to grow to £25 million in the next three to five years. Mr Green, who acquired Clayton Glass in

UNW’s Neville Bearpark (centre) with Andrew Frost from BE Group (right) and Ryan Green, MD of Clayton Glass (left)

“As far as grants go, Let’s Grow was a reasonably straightforward, thorough process and the team was fair and adaptable to our changing circumstances” 2005, said: “As far as grants go, Let’s Grow was a reasonably straightforward, thorough process and the team was fair and adaptable to our changing circumstances.” Let’s Grow, which is administered by the BE Group in partnership with UNW and The Journal and Evening Gazette, supports SME growth and job creation in the North East. Aimed towards manufacturing businesses and service sector businesses, grants are available to businesses of all sizes, with higher levels of support available to SMEs. Neville Bearpark, who leads the UNW grants team, said: “It’s superb to see the expansion and job creation at Clayton Glass as a result of support provided by Let’s Grow. “This is an ambitious company, which is growing strongly and has a firm plan in place for further expansion. The ongoing job creation by the company is already benefiting the economy here in the North East and it

looks like it will continue to do so for a long while yet.” Andrew Frost from the BE Group said: “Clayton Glass is a family business with huge ambition and its appetite for growth sets a great example for other North East companies to follow.” UNW, www.unw.co.uk, was instrumental in setting up the Let’s Grow Fund in 2013 and since then has continued to provide corporate finance support and appraisal of all Let’s Grow applicants.

More details on the Fund please call 0191 389 8434 or email letsgrow@be-group.co.uk

PROFILE TEDCO

North East Start-Ups Succeed in Being Investment Ready Through TEDCO Business Support TEDCO is making access to funding support for start-ups central to its business support programme with an investment readiness plan to give entrepreneurs access to the capital they need to set up and grow

Dr Craig Rose, MD of Seaweed and Co. with Bill Hartshorne, Business advisor at TEDCO

Based at the BIC in Sunderland, TEDCO Business Support is the go-to organisation for start-ups in the region, helping no less than 261 new ventures set up in the last 12 months alone. Through an extensive network of experienced regional business advisors, TEDCO offers a range of bespoke support packages to individuals looking to access funding or source investment partners to raise the capital needed to take a business from idea to thriving new venture. Virgin StartUp selected TEDCO as its North East delivery partner to support a programme offering low-cost government-backed business loans. The not-for-profit organisation has worked with TEDCO exclusively in the region to help over 100

new business access start-up capital in the form of a low-cost business loan since the programme launched in late 2013. Through its exclusive partnership with Virgin StartUp, TEDCO has helped new businesses in the North East secure government backed business loans totalling over ÂŁ1.2m. The success of the Virgin StartUp programme has led to a new generation of businesses having the necessary support to fund their new venture, but also drive forward growth and development opportunities to really make their business thrive. Dr Craig Rose, managing director of Seaweed & Co. worked with TEDCO Business Support through the Start and Grow programme to successful

receive a Virgin StartUp loan. Start and Grow is specifically designed to help new ventures at the pre-start-up stage with access to financing, one-to-one mentoring and robust planning for businesses with high growth targets. Seaweed & Co. was launched in 2015 to offer quality seaweed products for the food and supplement industry using the finest seaweed grown in the Scottish Hebrides. Launched by Dr Rose from his base in North Shields, Seaweed & Co is now looking to capitalise on the growing popularity of seaweed as a superfood ingredient to boost sales within the UK and international food and supplement industry. Dr Rose, managing director of Seaweed & Co said: â&#x20AC;&#x153;Thanks to investment from Virgin StartUp

PROFILE TEDCO

“Food containing Seaweed & Co. branded seaweed is now stocked in all of the major UK supermarkets”

Carole White, Chief executive of TEDCO and the guidance of TEDCO Business Support via the Start and Grow programme, we are on track for a successful first year and have three UK distributors on board to sell our product both home and abroad to the food and nutrition industry. Food containing Seaweed & Co. branded seaweed is now stocked in all of the major UK supermarkets.” Dr Rose received one of the highest business loans available from Virgin StartUp - £25,000 – which has been used to fund a new milling system in Scotland to produce larger volumes of higher quality seaweed through a more gentle milling process at low temperatures. The milling system is one of the most unique seaweed production facilities in the UK and gives the business scope to improve quality and improve efficiencies at the production stage. Dr Rose continues: “Receiving the investment from Virgin StartUp was absolutely essential in getting the production side of the business equipped to maintain the quality of the seaweed in our final product. I had my TEDCO business advisor helping me every step of the way so I always felt I had someone to support me in the early stages of setting up the business to ensure that Seaweed & Co. was investment ready at the time when capital was needed to really help fund the future aspirations of the business.” The Start and Grow programme is delivered by TEDCO Business Support in the North East and is

supported by the Regional Growth Fund (RGF). Start & Grow is delivered across England by the Cavendish Consortium in areas where there are lower levels of business start-up. The programme helps new enterprises launch and develop new employment opportunities in the private sector with a range of services to help new ventures get investment ready and provide the building blocks needed to establish routes to future growth. Carole White, chief executive of TEDCO Business Support comments: “The North East is a hotbed of entrepreneurial talent and as a team, we have been overwhelmed with the quality of new business ideas and the sheer ambition to create new ventures which exists in the region. “We are focused on helping entrepreneurs to develop their dreams of business ownership and have a team of advisors supporting individuals at the pre and post-start-up stage of setting up a business. They are on hand for every phase of the journey, whether that is vetting business ideas or tightening up a business plan or even identifying useful training courses, sourcing premises and developing useful relationships appropriate to each business. “However, where we see our support as absolutely invaluable is getting businesses access to the type of financing that can make or break a new business idea. Most new businesses require financing of some description to help get things up and running in the early days. Whether that is to fund vital equipment, new premises, marketing support or cashflow purposes, generally the capital needed cannot be met by private funds available by the client. “This is where we step in and help advise the client on not only the best routes for accessing funds, but also getting that business ready to apply for and receive investment. Start and Grow is a programme that was created for this very purpose, to help new businesses unlock the kind of private financing necessary to set up or grow a new venture. “Sourcing avenues of private finance is difficult in itself but meeting the often strict criteria to apply for and receive that capital can be even harder. With the support of our advisors, we work with each individual to assess the businesses needs, look into different types

of financing available and get that particular business investment ready to successfully apply for capital funds. “The right sources of finance are not always the most straightforward and can vary from investment groups to government funding to high street banks depending on the business and the individuals applying for the loan. Through our partnership with Virgin StartUp we have been able to help over 100 businesses successfully receive a government-backed start-up loan which has supported a range of new ventures with the help they needed to move forward with their business ideas. “The support offered by Start and Grow does not stop following the launch of a business. The programme includes three years of ongoing support beyond the start-up phase to help new ventures through what can sometimes be a difficult first few years of trading. This support can be in whatever form required by each individual but can also be utilised to help advise on future rounds of investment if further capital is required to enable growth and expansion. “From financing renovations of premises for a high-end fashion boutique to equipment for a unique micro brewery, Virgin StartUp and TEDCO Business Support are helping entrepreneurs capitalise on their ideas to create exciting new ventures in our region. With so many talented entrepreneurs just waiting for the push into self-employment, we look forward to supporting even greater numbers of new business start-ups seeking the right type of support and investment preparation from our experienced team of advisors.”

For more information please call 0191 5166105 or visit www.tedco.org or email enquire@tedco.org North East Business and Innovation Centre (BIC), Wearfield, Enterprise Park East, Sunderland, SR5 2TA

PROFILE bqlive.co.uk

Bank supports bright sparks Growing a business can be a lonely process but a new initiative is coming to the North East which will offer entrepreneurs a helping hand, as Peter Jackson finds talking to NatWest’s Carl Haagensen Thousands of people in the region would like to start their own businesses but most are held back by fear of failure. New research compiled by Populus for NatWest, shows that a fifth of the region’s adult population would like to be entrepreneurs but, of these, 58% don’t go into business because the risk of failure puts them off. But NatWest, part of RBS Group, is planning to give would-be entrepreneurs and ambitious businesses a lift in the region by opening an Entrepreneurial Spark business accelerator hub in Newcastle. Entrepreneurial Spark was established in Glasgow three years ago and now claims to be the world’s largest free Hatchery. Carl Haagensen, North East entrepreneur development manager at NatWest, explains how it was started by Jim Duffy – now Entrepreneurial Spark’s “chief executive optimist’’, pointing out that the programme has “weird and wacky terms for everything’’. He adds: “He’s a serial entrepreneur who identified that there’s not a lot of support for early stage businesses looking to grow in scale. He went out to a couple of philanthropists in Scotland, Lord Willie Haughey and Sir Tom Hunter, and worked with them to set up the Entrepreneurial Spark programme.’’ RBS heard about the programme, lent its support and became a partner to roll it out across the UK.

Entrepreneurial Spark is open to any type of business from any sector and every six months takes 80 entrepreneurs into its accelerators located around the country. An entrepreneur applies for the programme, goes through a selection process and, if successful, joins either the February or August cohort. Newcastle’s first cohort of 80 joins a Hatchery located in half of the bank’s commercial and corporate office on the Quayside this August. “During the six months process, they are called a chiclet,’’ says Haagensen. “It’s kicked off with a two-day Bootcamp which helps them to understand their business proposition and how they validate their business idea through research. “A lot of entrepreneurs, when they start their business haven’t done any market research. The first six months is all about making sure they’ve got a tangible business. If they haven’t, it’s a case of working with them to pivot them to another idea, because these people who come onto the programme are very entrepreneurial minded with millions of ideas in their heads and it’s a case of just finalising on one.’’

Half way through the programme the Chiclets attend a #GoDoAcceler8 training day, which concentrates on leadership. “The businesses may be growing their team and it’s about how they get their vision of the business leader to their staff so they are all going in the same direction,’’ says Haagensen. During the six months they have an Enabler to work with them. “These are people who will sit down with them every other week to make them step out of their business to work on their business,’’ he says. “Entrepreneurs are notorious for working inside the business and not looking at the longer term strategy. The Enabler process sets the goals and what stepping stones are necessary to achieve them and it’s a case of holding these entrepreneurs accountable so they have to come back in two weeks’ time and say what they have delivered and make sure they are moving forward.’’ The Enablers come from a variety of backgrounds and are not necessarily bank staff. “In Newcastle we haven’t recruited them as yet, but they are there to work with the businesses to

“The businesses may be growing their team and it’s about how they get their vision of the business leader to their staff so they are all going in the same direction”

PROFILE bqlive.co.uk

push the businesses forward,’’ says Haagensen. The Hatchery is a collaborative working space where the entrepreneurs are with like-minded businesses bouncing ideas off each other. “They are very collaborative, pushing each other forward and celebrating the highs and the lows together,’’ he says. Events are staged every two weeks on a Wednesday night on business topics such as pitching, finance solutions or cash flow management to expand the entrepreneurs’ business acumen. The Hatchery doesn’t necessarily replace the need for the entrepreneurs to have their own business premises and clearly in some cases – such as a food and drink business – it couldn’t. But they will still spend a day or two every week working out of the Hatchery. “I looked after the three hatcheries in Scotland before relocating to the North East and we had a lady who was in a family business that was a stonemasons,’’ says Haagensen. “She wanted to really grow the business so she would come and spend one day a week in the Hatchery to get time away from all the usual nitty-gritty – the emails, the invoicing and ordering – so she could really dedicate the time to pushing the business forward.’’ Some tech businesses, on the other hand, are based in the Hatchery full time. A member of NatWest’s business banking staff will be on hand on a Wednesday afternoon to help with any financial queries. “We also partner with KPMG and they identify the top 10 businesses in each location and a KPMG accountant works with them to help work on their projections and cash flows so that when they go in for investment finance they’ve got robust numbers that helps them to do that,’’ says Haagensen. The bank also runs “piranha pits’’ within the Hatchery, modelled on Dragons’ Den, to help businesses prepare themselves for investment by giving a three minute pitch before facing questions from a panel of bank staff, mentors and industry experts. “They get grilled, so if there are any cracks we help them repair them and make sure they are as good as they can be when they go for investment,’’ he adds. Across the UK, businesses from all sectors have entered the Entrepreneurial Spark programme. About 30% are tech based and about 30% food and drink. “Newcastle has seen a variety of styles of businesses – everything from tech-focused to a gentleman who has created a new rail carriage to be

“They get grilled, so if there are any cracks we help them repair them and make sure they are as good as they can be when they go for investment” able to transport rail freight more cost effectively,’’ says Haagensen. The average age of an entrepreneur on the programme is 37 but they have included a 14-yearold and another aged 82. They are evenly split between the sexes and the businesses include start-ups and existing businesses. “We look for high impact entrepreneurs who want to grow their businesses,’’ he says. “The programme’s not designed for lifestyle businesses, it’s designed to help businesses that really want to grow.’’ Some 660 businesses have been helped through the programme, which has created 1,816 jobs, a total turnover of £85m and they have brought in investment of £45m. “Most importantly, 88% of the companies they have worked with are still trading today,’’ says Haagensen. All of which looks encouraging for the North East where there has been an influx of applications and 28 people have already been accepted onto the programme. There’s no cost,

in fees or equity, and the businesses are not even required to bank with NatWest. So, what’s in it for the bank? “When SMEs do well, we all do well, from a UK and regional economy point of view,’’ says Haagensen. “Our staff get a huge amount out of it by helping these businesses and by being in buildings where we’ve literally opened the doors to 80 entrepreneurs. The staff really get enthused and engaged and really interact with the entrepreneurs and there’s a huge buzz around the buildings and the regions where we have this.’’ Which should help overcome that fear of failure.

For further information visit www.entrepreneurial-spark.com

TEDCO

PROFILE Let’s Grow

Neil Spann, managing director of Big Solar

Let’s Grow let the sun shine Big Solar is developing a product which could transform the world’s energy production, and it is doing so with help from Let’s Grow, as Peter Jackson reports

In the search for renewable energy which can provide an affordable and reliable alternative to fossil fuels, a Washington company is on the verge of a breakthrough of global significance. Big Solar, based in the Washington Business Centre, is developing a disruptive solar photovoltaic, PV, product called Power Roll, which will generate electricity from the power of the sun. It is the brainchild of Dr John Topping, a scientist at Oxford University but originally

from Seaham, who worked in speciality coatings. He became convinced there must be an alternative to the conventional solar panels, which are expensive, need government subsidy to compete and whose basic design hasn’t changed in 40 years. Neil Spann, managing director of Big Solar, explains: “He basically said there’s got to be a better way to do solar than the current technologies. After some time he developed this novel architecture and that’s what Power Roll is, a completely different way to produce

solar power.’’ For obvious reasons, the way in which Power Roll works is highly commercially sensitive, but it depends on technology embedded in wafer thin plastic to form a horizontally integrated solar cell, as opposed to the conventional silicon PV vertical design. As Spann puts it: “Power Roll turns the technology on its head.’’ The resulting product will be in roll form, with an adhesive backing, similar to duct tape. Because it’s so lightweight, its installation will

PROFILE Let’s Grow

not be limited largely to rooftops. A 50KW silicon array to cover the roof of a small factory would require 250 panels weighing about 4 tonnes, whereas for 50KW of Power Roll, the weight would be about 120 kilograms. Power Roll is not only much lighter and can be installed far more easily, but, according to Big Solar, it can be made with far fewer manufacturing processes, making it up to seven times cheaper to manufacture in the UK than a silicon PV panel in China. “When you put all of that together, the cost of electricity that this can generate is not only about 50% cheaper than any other solar PV renewable technology, it’s comparable to hydrocarbons, so it’s as cheap as gas and coal,’’ says Spann. He concedes that silicon PV’s efficiency at 16% to 20%, beat’s Power Roll’s 10% efficiency but the cost savings still make the energy cheaper and it is expected that Power Roll’s efficiency will increase. To develop the idea, Dr Topping needed funding and in 2012 approached Saul Joicey, owner of Sunderland based solar power business Sun Spirit. Joicey saw the promise of Power Roll and provided the investment for some initial experiments to prove the technology and set up Big Solar. They then approached the North East LEP which introduced them to Drew Johnson, the former chief executive of Newcastle-based supplier of energy efficient products Eaga, and he, with a handful of others, backed Big Solar in 2013 with the “first real significant investment’’ for proof of concept. Spann, who had also worked for Eaga, joined to help commercialise the technology. They then started with a number of universities to further develop the technology. These included The University of Texas in Austin, which has a specialist centre for new PV projects; Oxford; Durham; and Sheffield. Spann says: “Between July 2013 and September 2015 we worked to prove that the Power Roll works in laboratory conditions.’’ This enabled them to raise a further £2m from private investors for further R&D, to recruit another three staff and to scale up to install a pilot line. The pilot line is costing around £700,000, of which £105,000 is coming from a grant from the Let’s Grow

“We are genuinely breaking new ground here. It’s not just taking an invention and making it slightly better”

programme, which was born out of the Regional Growth Fund, RGF. Spann says: “Applying for Let’s Grow was a good process. We have applied for a number of different grants and the Let’s Grow process was very straightforward and timely – well within six months – if you contrast that with other grants, they can be quite lengthy processes.’’ The potential market for Power Roll is clearly enormous. Not only can it provide a cheaper alternative to silicon PV panels but there are also markets where silicon PV is not suitable. For example, Big Solar anticipates demand from owners of commercial rooftops, particularly of those that can’t bear the weight of silicon PV panels. Power Roll would also be able to help meet the enormous world demand for off-grid electricity. Spann says: “There are over 1.3 billion people in the world with no electricity or who rely on diesel generators. Power Roll can be cost effectively transported and installed and allows power to be generated very cost effectively.’’ India alone has 300 million people with no access to grid electricity and Big Solar already has two Indian investors because of the importance of the Indian market. There is also an almost limitless market in consumer products with the potential to attach Power Roll to the back of a mobile phone or a rucksack or anything else where power could usefully be applied. But the next step is to get the product to market. “At the moment we are making samples which are one square centimetre and what we need now is to start to produce rolls,’’ explains Spann. “Our target is over the next 15 to 18 months to produce rolls of Power Roll, maybe six inches wide by five to ten metres long which will be able to be tested, accredited and proven. “At that point, we will look to raise investment to build our own manufacturing

plant here in the North East, which would be a fraction of the cost of a silicon PV factory because it’s low capital intensity and low energy intensity.’’ Alternatively, the technology could be licensed and Big Solar could enter into strategic partnerships with third parties. Spann points out that the North East is a good location for solar power, with the Centre for Process Innovation, CPI, at Wilton and Sedgefield, which is the national centre for printable electronics, and good universities. Big Solar currently has two granted patents and another in the process of being granted and a further 15 patents which are pending. “We are using known processes but to a very different architecture,’’ says Spann. “What’s key is our different architecture and our know-how. We are genuinely breaking new ground here. It’s not just taking an invention and making it slightly better.’’ If all goes well, we could see Power Roll being installed on houses in two to three years. “Fundamentally we want to create a North East business,’’ Spann adds. “Eaga started with four people and ended up with 5,000 people. Drew was the chief executive, Ian McCleod, who’s one of our directors, was the CFO there and I was there, so we know about building businesses from small scale to large scale and we’d love to build another large scale business in the North East.’’

For more information call 0191 389 8434 or visit www.be-group.co.uk or email letsgrow@be-group.co.uk

PROFILE Let’s Grow

Clothing’s coming home Two businessmen are bringing skilled jobs back to the North East with help from the Let’s Grow Fund, as Peter Jackson reports Meeting Richard Metcalfe for the first time comes as something of a shock. Shaking hands with him, I nearly crick my neck in meeting his eye, for this jovial 42-year-old is seven feet tall. In fact, the former Rugby Union professional was the world’s tallest international player. He played professionally for 10 years which included winning the Premiership with Newcastle Falcons and the European Cup with Northampton Saints before playing internationally for Scotland, picking up 11 caps. His Scottish grandparents qualified him to play for Scotland, despite having been born in Rothwell, near Leeds. “I’m a Yorkshire Scot – tightest man in the world,’’ he laughs. When his rugby career ended, he set up a sportswear business, Orion Teamwear, which he sold in January of this year. It was while he was running Orion that he got the idea behind his present venture, Northern Clothing. He explains: “It was the problems I had

in importing from the Far East and from offshore manufacturers. The lead times were long, there was a language difference.’’ So last year he got together with his fellow director Paul Varley, who had headed up Eaga after it had been acquired by Carillion in 2011 and then worked as chief executive of Newcastle Falcons. Varley serves on the LEP board and leads for the organisation on business growth. Metcalfe and Varley were conscious that the North East had a strong tradition of clothing manufacture, with companies such as Dewhirst and Barbour and that meant there was a good supply of skilled labour. “There had been a huge textile background in the North East but 10 or 15 years ago everybody decided to offshore and all the workers went to work for supermarkets,’’ says Metcalfe. “So there’s a huge skilled labour force that’s sitting there untapped.’’ They decided that they could compete with the Far East in sportswear sublimation, the fast full-colour, high-definition printing of

images and graphics direct onto fabrics. In January they took 14,000sq ft of factory space on the Tyne Tunnel Trading Estate in North Shields and Metcalfe began using his contacts to win business. They approached the Let’s Grow programme, an initiative that was born out of the Regional Growth Fund, RGF, which the Coalition Government set up to stimulate private sector investment in those regions most affected by public sector austerity. Unlike the centrally administered RGF with its £1m minimum grant, Let’s Grow is a delegated fund for the North East that can provide grants for as little as £50,000. It is administered by accountants and business advisers UNW and independent business services group BE Group. Metcalfe and Varley needed an early decision from Let’s Grow in order to gear up for the 2016 season. Let’s Grow duly provided a grant of £175,000, which represented just under 30% of the investment needed for new machinery. “What was really refreshing about it was the pace with which the process was completed and the interactions we had were really positive,’’ says Varley. “They helped cushion our personal investment in this business.’’ The pair are now eager to recruit between 10 and 15 seamstresses to join the business – though, after swift debate, they conclude that sewing machine operatives would be a more politically correct term. Sportswear produced by high tech sublimation will allow these operatives to compete with Far Eastern manufacturers. With this process, digital printers print ink onto paper, which is then transferred into white fabric to be cut by laser to 0.1mm accuracy. This allows for short, bespoke

PROFILE Let’s Grow

“I’m a Yorkshire Scot – tightest man in the world” he laughs

PROFILE Let’s Grow

production runs. Metcalfe explains: “Someone can order ten rugby shorts or netball dresses. If we had already cut 100 of every size, we’d have a lot of excess stock just sat there with white fabric waiting one day to be used.’’ He adds: “In China the labour’s cheap but we’ve got the advantage of time. The Chinese are on a 10 to 12 week delivery. People want to work with people in the UK and they want the Made in Britain flag but it usually isn’t financially viable.’’ There are only two other companies in the UK with the same machinery and a handful in Europe. “It’s a very niche market,’’ says Metcalfe. “But if you look out on a sports pitch on a weekend, 95% of rugby kits are sublimated, netball dresses are all sublimated and football is very much going that way.’’ Varley says that despite this demand it is unlikely there will be much more competition in the UK as there are too many barriers to entry. “That’s why Let’s Grow was so vital to us in terms of giving us the support to get it off the ground because it’s a capitally intensive business,’’ he adds. Now the factory is up and running, orders have been secured, the garments are in the shops and Northern Clothing is looking for experienced sewing machine operatives. Customers are the second tier sports brands such as BLK, Macron Teamwear or Orion Teamwear. “It’s people who aren’t necessarily a £100m business but are businesses that are turning over between £500,000 and £30m and there’s a huge market in that, where there are businesses which don’t have the buying power of the huge brands to go and demand the output of a full factory,’’ says Metcalfe. “We do some motor racing. We’ve done some things for the British Superbikes, making polo shirts for Team Anvil for Yamaha for their 50th birthday, through a racing brand called Savage Squirrel.’’ Northern Clothing also hopes to be exporting to markets in Europe and aims for turnover of “a few million’’ in two or three years. “What we’ve got to make sure we do is retain the agility and flexibility to be able to respond to the customer base,’’ says Varley.

“Sometimes when you get too big you lose that. When Richard talks to the major brands that come to see us, he has walked in their shoes, he understands the challenges that they have got. So when they say, `Can you do this?’ he’s one step ahead because he’s been there. That’s giving us an edge versus some of the larger manufacturers that are less agile and less flexible.’’ So what’s the ultimate ambition for Northern Clothing? “I’m a big believer in bringing jobs back to the area,’’ Varley says. “I think that’s really important. It’s about giving back and giving the kids coming out of schools a sense of ambition and a sense of purpose.’’ Metcalfe adds: “We just want to be the leader in the reshoring of garments being made in the UK. When you go back 20 or 30 years ago, people knew there was a career path for them but now all we are looking at are call centres or supermarkets and there’s no real skill base there. “We are looking for experienced sewing

machinists. I had one lady who came for an interview and she said: `I can’t believe that you’re going to offer me a job, I’m 50’. I said: `That doesn’t make any difference to us, you’ve got something that we want, which is the experience’. It will be something special if people knew there was an industry here that was actually growing and that is sustainable.’’ It’s a big ambition, but then, he’s a big man.

For more information call 0191 389 8434 or visit www.be-group.co.uk or email letsgrow@be-group.co.uk

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