BQ2 West Midlands Business Growth

SPECIAL REPORT: BUSINESS GROWTH BOXING CLEVER Family-run packaging business owes success to father’s values MAS APPEAL Firms praise Manufacturing Advisory Service experts POSTCODE PIONEERS The data specialists who exploited a gap in the market

What a bank should be

Charles Garfit, Head of Manufacturing, Santander UK

Whether small family companies or global corporations, we approach every business customer as an individual relationship.

We strive to understand your unique needs and to make banking straightforward, so you can focus on growth. That’s why our clients get a dedicated, expert Relationship Director.

We believe credit partners should meet you directly, so our decisions are as transparent as possible. We work hard to do right by you and your business now and in the long term.

It’s thanks to this approach that we’reproud to say 4 out of 5 of our business customers would recommend us.

Simple Personal Fair What a bank should be Find out how we’re supporting businesses like yours across the UK at www.santandercb.co.uk Or contact Chris Hallam on 07803 376981 or email chris.hallam@santander.co.uk

GfK NOP Research: Santander Business Satisfaction survey Q4’13. 1,628 respondents interviewed.

Santander Corporate & Commercial is a brand name of Santander UK plc, Abbey National Treasury Services plc (which also uses the brand name Santander Global Banking and Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset Finance plc) authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register numbers are 106054 and 146003 respectively.

In Jersey, Santander UK plc is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991. Registered office: 2 Triton Square, Regent’s Place, London NW1 3AN. Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England. Santander and the flame logo are registered trademarks.

Santander UK plc is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website (www.gov.je/dcs) or on request.

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CONTENTS

CONTACTS

04 NEWS

ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk

The latest growth developments

14 BOXING CLEVER Packaging firm keeps it in the family

EDITORIAL Ian Halstead Editor e: halsteadian@aol.com

18 SUPPLYING ANSWERS Why managing supply chains is vital

22 TURNING IT AROUND How firm boosted satisfaction ratings

24 BETTER TOGETHER A conglomerate that really works

28 WORLD WELCOMED Region’s foreign investment success

32 LIVE DEBATE The regional growth agenda

38 MAS APPEAL How the Manufacturing Advisor Service has made a real difference

42 AIMING HIGHER Santander’s Breakthough initiative

44 SOUND DECISION The diversification plan that paid off

FROM JAM AND BREAD TO SOME SERIOUS DOUGH

46 BUSINESS GROWTH

SPECIAL REPORT: BUSINESS GROWTH

WELCOME This BQ2 Special Report is full of stories about individuals who overcame challenges, and I hope you gain as much pleasure in learning about their journeys as I did.

Prof. Jan Godsell, of Warwick Manufacturing Group, explains why supply chain strategies must dovetail with business models, and Simon Beech outlines the M&A strategy behind Nasmyth’s rapid expansion.

Marketing Birmingham’s Neil Rami offers insight into the city’s remarkable FDI success, and our Live Debate highlights the regional business growth agenda.

Jitha Singh credits the impressive trading record of his CBS Packaging business to the vision and ethics of his late father. We hear from the Manufacturing Advisory Service, and two clients - Brandauer and Disklabs who appreciate its work.

Santander’s Breakthrough programme is outlined by divisional MD, Tim Rezzack, and head of growth capital, Darren Hart.

The success of Guy Mucklow’s Postcode Anywhere is a case study in how to deliver growth, and Dino Kryiacou explains how Gobel & Partner became one of Europe’s leading quality management specialists.

Finally, Jim Griffin recalls how Automotive Insulation came back from the brink of collapse to become a major multi-national force.

DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk ADVERTISING Chancelle Bloe Business Development Manager e: chancelle@room501.co.uk t: 07786 070 772 Mike Moloney Business Development Manager e: mmmikemoloney@aol.com t: 07801 849 367

room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements.

All contents copyright © 2014 room501 Ltd. All rights reserved.

While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, September 2014. room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

Ian Halstead, Editor in association with

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BQ Magazine is published quarterly by room501 Ltd.

SPECIAL REPORT | AUTUMN 14

NEWS

AUTUMN 14

Construction sector builds up to major event, ART aids businesses seeking funds, manufacturers put their faith in domestic markets, consultancy moves into des res, new lease of life for former brewery

>> Barrell becomes a partner

>> MINI’s major achievement as it hits three million milestone The remarkable renaissance of the MINI marque under the stewardship of BMW was underlined yet again, when production of the new brand at its Oxford plant hit three million.

The landmark vehicle was a five-door Cooper S Hatch, with a special paint-job to celebrate its British heritage.

BMW Group relaunched the brand in 2001, and during those 13 years, the model range has grown from one to seven.

The vehicle is now sold in 110 overseas markets; with the United States the largest, followed by Germany, China and France.

The two millionth export model came off the Oxford production line on the same day, and was a MINI Hatch, painted in an eye-catching shade of ‘volcanic orange’, which had been ordered by a customer in Japan.

BMW – which calculates that the two million MINIs have added around £30 billion to Britain’s export drive – also used the occasion to announce £750m investment across its manufacturing sites; Oxford, the Swindon pressings plant and the Hams Hall engine plant.

Stand-out elements of the programme include a new 1,000-robot bodyshop at Oxford and new body manufacturing technologies, which include laser welding, at Swindon.

BREAKFAS T

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SPECIAL REPORT | AUTUMN 14

SIGN UP TO YOUR FREE SUBSCRIPTION OF BQ BREAKFAST. DELIVERING YOU INSIGHT, NEWS AND ANALYSIS TO HELP GROW YOUR BUSINESS

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Grant Thornton is building on its manufacturing expertise, with the promotion of Neil Barrell to partner and national head of operations consulting after just three years. Barrell previously held senior positions in manufacturing; leading business turn-rounds, acquisitions and relocations.

During his first year with Grant Thornton, he had a lead advisory role to China’s Geely Automotive Holdings on its acquisition of Manganese Bronze, and at the end of 2013 he advised Arlington Industries Group on its acquisition of Remploy Automotive. The last 18 months have seen Barrell’s work diversify, and he recently advised international packaging business RPC Group on its acquisition of the Chinese injection moulding specialist ACE Corporation. Barrell said: “This enhanced role will allow us to share best practices with other manufacturing sectors including aerospace, oil and gas, food and drink and pharmaceuticals; sectors containing businesses hungry for growth, both domestically and globally.” Dave Munton, regional managing partner, added: “Neil joining Grant Thornton, and his promotion to partner, illustrates the firm’s approach to making innovative appointments of people with in-depth industry expertise. I foresee his international expertise being particularly sought after in the years ahead as more businesses look across borders to fulfil their ambitions for growth.”

BUSINESS GROWTH

Reason says: there are three ways to go.

Instinct says: only one leads to growth.

Business decisions are rarely black and white. Dynamic organisations know they need to apply both reason and instinct to decision making. We are Grant Thornton and it’s what we do for our clients every day. Contact us to help unlock your potential for growth.

If you would like to find out more please contact: David Munton Regional Managing Partner T 0121 232 5398 E david.munton@uk.gt.com Š2014 Grant Thornton UK LLP. All rights reserved. Grant Thornton UK LLP is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Services are delivered independently by member firms. Full disclaimer available at grant-thornton.co.uk

NEWS

AUTUMN 14

>> Building up to a big event Two of the best-known characters in the West Midlands construction sector are among the speakers at a major conference and exhibition in the region later this year.

David Bucknall OBE will chair the event, and Tony Hyde (chairman of Thomas Vale Construction and a director of Bouygues UK) is one of the keynote speakers at the Midlands Construction Summit.

The event is on November 27th, at the National Motorcycle Museum, and has been organised by the Built Environment Hub, the body tasked with driving product and process innovation into the industry.

The lead presentation will come from Peter Hansford, the Government’s chief construction adviser, who will then join a panel for an open Q&A session, allowing members of the audience access to one of the leading contributors to the Construction 2025 strategy.

Around 300 delegates are expected to hear influential contributors from across all key disciplines of the construction industry, including supply chain specialists, contractors, quantity surveyors, architects, engineers and clients.

Construction remains the UK’s largest manufacturing sector, and the event aims to identify opportunities ahead for companies and their suppliers, as the industry moves into a growth phase, stimulated by the Government’s infrastructure programmes and the Help-to-Buy initiative.

>> Loan is where the ART is Businesses in the West Midlands looking to fund growth can turn to ART (Aston Reinvestment Trust) for a loan if they have been unable to meet their requirements from the banks.

As a Community Development Finance Institution, ART’s primary focus is to help boost the local economy by ensuring that viable businesses can access the finance they need.

Since 1997, it has helped more than 700 borrowers to create, or preserve, more than 5,500 jobs. Originally lending in the inner-city areas of Birmingham, it now lends across the West Midlands.

“We have experienced record growth in the

SPECIAL REPORT | AUTUMN 14

Focusing on domestic markets is regarded as vital to growth

>> Clarity begins at home for manufacturing sector The largest survey of manufacturing sentiment among SMEs suggests they see domestic demand as more important than exports, in driving their growth strategies.

The quarterly Manufacturing Advisory Service (MAS) Barometer is the largest of its kind; quizzing more than 900 small companies across England about the opportunities and challenges they see ahead.

At the national level, two-thirds (67%) of those firms saw increasing domestic sales as their best chance to expand, followed by new product development and improving production processes.

However, in the West Midlands, more than three-quarters of manufacturing SMEs (78%) thought focusing on their home markets was their best bet for growth.

The regional data also revealed long-term confidence, with a massive 93% predicting that both turnover and employment numbers would be up significantly during the next four years.

The biggest challenge though – reflecting the findings of previous MAS surveys, and other research at regional and national level – was access to skills, with four-in-five companies (83%) expressing their concerns on the subject.

“It was not surprising to discover that the biggest challenge relates to skills, or that marketing and creating effective sales channels were the next major concerns,” said MAS area director for the West Midlands, Lorraine Holmes.

“We will work with our partners, such as GrowthAccelerator and the skills council for manufacturing (SEMTA) to help SME manufacturers overcome these challenges.”

last financial year and anticipate another record year in 2014-15 and are needed more now than at any point in our 17-year history,” says chief executive Steve Walker.

ART lends up to £100,000, often alongside other funders, including the banks, as part of a package of finance. Customers that have subsequently flourished thanks to its support include both start-ups and established companies, operating in a wide range of market sectors.

“Our success is measured in terms of our

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borrowers’ success,” says Walker. We’re here to support businesses in achieving their objectives.”

We are needed more now than at any point in our 17-year history

BUSINESS GROWTH

AUTUMN 14

COMPANY PROFILE

High Growth Businesses Can and Should be the Heart of Healthy Regional Growth Birmingham Business School is on a mission to develop better businesses The kind of economic growth we need, at the national, regional and local level should bring more than profits and elevated stock prices. It should bring investment, employment and well-being as well as wealthcreation to everyone across a region like the West Midlands.

As the first Business School in the UK, Birmingham Business School was founded to improve the way businesses were led and managed. That same impulse motivates us today. This does not just mean profitable growth. It means better business.

The focus of our world-class research and teaching is to provide students and partners with the insights, ambitions and skills to shape better, simpler and more sustainable business strategies – approaches which align commercial imperatives with the broader societal agenda.

Improving productivity, delivering added value to customers and clients and sustaining competitive advantage are all essential business goals.

But while we study and teach these traditional management themes our faculty are developing a deeper understanding of the broader impacts of business growth.

Our six research clusters are addressing major questions which affect not just management performance and business success, but have an impact on everyone in our society.

• How can we make our financial system more resilient and predictable?

• What are the broader implications of China’s economic development?

• What are the effects of global value chains on the employment opportunities for local workers?

• Are there better ways of making government agencies accountable for their public expenditure?

• What kinds of economic systems and market models will incentivize the adoption of low-carbon technologies?

BUSINESS GROWTH

Professor Simon Collinson, Dean of Birmingham Business School at the University of Birmingham

For example… our Entrepreneurship and Diversity research cluster is working to transform the perceptions of – and real support for – ethnic minority entrepreneurs. Their businesses contribute over £25 billion to the UK economy annually, but the lending practices of banks and current Government policies do not take account of differences in the way they are financed and develop. By mentoring networks of firms and collaborating with banks, regional development agencies and policy-makers, we are removing the barriers to growth for these firms in the West Midlands.

For example… our Global Value Chains (GVC) research cluster is concerned with sustainable and inclusive growth. Our researchers are not just focused on the competitive challenge from emerging economies as locations for economic activity, but on helping UK regions avoid the ‘low-road’ to socio-economic development through upskilling and innovation. Our Midlands Excellence Organisational Improvement Programme (MidEx) is also helping to improve the performance of organisations across the region.

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TWO CENTRAL PRINCIPLES UNDERPIN EVERYTHING WE DO. (1) People at the heart of business. We know that businesses - large and small - depend for their success upon relationships between individuals, and depend for their growth upon entrepreneurialism and drive. So our core mission is to help the leaders of today and tomorrow define and deliver better business strategies – by cultivating their ‘soft’ skills as much as their analytical abilities - unlocking their potential and unleashing their ambitions.

(2) Business at the heart of society. Successful businesses are not just profitable. They add value to their regional communities and they take on the broader challenges of our society, from environmental sustainability to poverty reduction.

To achieve our vision, Birmingham Business School looks at business and business issues in the round. No business solution can be solved just by looking at a balance sheet - the social, ethical, cultural and economic contexts must be understood. We bring perspectives from aligned disciplines such as social sciences, humanities and engineering to shape a holistic view of business issues and opportunities, giving all of our stakeholders the benefits of a multidisciplinary perspective. For us, business is not a stand-alone subject, because delivering better business strategies depends upon a blend of skills and a mind-set which embraces diversity.

Contact details: www.birmingham.ac.uk/schools/business/ twitter: @UoB_Business facebook: birminghambusinessschool

SPECIAL REPORT | AUTUMN 14

NEWS

AUTUMN 14

>> Mexican save Coventry’s Manufacturing Technology Centre has helped a Midland engineering business take the virtual route to international growth.

JJ Churchill, which was founded just before the Second World War and employs 131 people, operates in the aerospace, defence, industrial and power generation sectors as a key partner to blue-chip OMEs; including RollsRoyce, Cummins, BAE Systems and Siemens.

In response to customer demand, the company decided to open a production plant in Mexico to target the South American market, but used the MTC’s expertise in virtual reality (via its CASIM 2 team) to judge how the new factory might be developed.

The team applied simulation modelling expertise to test the layout for a manufacturing cell for the Mexico site, ensuring it would have the right facilities, equipment and systems to meet demand, but with minimum costs.

The CASIM 2 analysis also presented an optimised site layout, enabling JJ Churchill to make essential business and capital investment decisions, and run through ‘What If?’ scenarios, before undertaking the risk and expense of physically reworking the inefficient layouts.

We were able to visualise the proposed site and remove potential risks The result was a 10% reduction in area from JJ Churchill’s original plan, and an improvement in the proposed site’s performance to deliver a 30% reduction in process costs.

JJ Churchill’s engineering and sales director, Kevin McCormick, says the outcome was that his company managed to achieve capital cost savings of 82%.

“We were able to access the same knowledge, facilities and expertise that larger companies have access to every day,

SPECIAL REPORT | AUTUMN 14

>> New lease of life for former brewery Development plans have been unveiled for one of the Black Country’s most famous industrial landmarks; Wolverhampton’s former Springfield Brewery.

The sprawling 12-acre site, alongside the West Coast main-line, has been derelict since the brewery closed in 1991 – and an array of proposals to develop the land have come and slowly gone.

Now, however, Wolverhampton University has revealed ambitious plans to transform the brownfield location into a new hub for construction teaching.

The site will house the new West Midlands Construction UTC (University Technical College), which is being sponsored by the Construction Industry Training Board. The university also plans to relocate its own School of Architecture & the Built Environment there.

The UTC will provide education for 14-19 year-olds specialising in construction and the application of IT in the built environment, and prepare students for professional and technical careers in construction.

The college is due to open in September 2015 on a temporary site, before moving into the new build at Springfield in September 2016.

The university’s Vice-Chancellor, Professor Geoff Layer, said: “This will provide a centre of excellence with the most comprehensive construction education and training in Europe, and we are delighted to be working with the CITB in bringing this project together.

“The development will put the area on the map in terms of construction education and training and will mean that we can provide skills and education from the age of 14, right through to senior professionals wanting to improve their own development.

“This area has a history of manufacturing and once up and running the centre will provide future opportunities for people to continue adding to that heritage.”

to visualise the proposed site in Mexico, and remove potential risks in a cost-effective and reliable environment.

“Aside from the technical expertise we

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received, the CASIM 2 work made it possible for us to utilise the site in the best possible way to make our business more productive, reliable and profitable.”

BUSINESS GROWTH

AUTUMN 14

COMPANY PROFILE

Hundreds of SMEs benefitting from WMG’s Support WMG at the University of Warwick has been applying research and technological know-how to the UK’s manufacturing industry for the last 33 years. During this time, WMG has worked with many small and medium sized businesses.

Since September 2012, WMG’s SME Team has been based at the cutting edge International Institute for Product and Service Innovation, helping West Midlands SMEs solve specific manufacturing, product development and business process challenges.

They offer dedicated project support; collaborative networking events and specialist internships, helping SMEs create innovative products and embed the skills and processes they need to innovate and to grow their businesses.

The specialisms of the team include a range of the most useful technology areas in product and service development, including Additive Manufacturing (3D Printing), Experience Led Design and Internet of Things.

Tony Hague, Chair of the MAN Group.

CASE STUDY: WMG and MAN Group collaborate to create over £1 million in sales and new jobs WMG and the Midlands Assembly Network (MAN) recently announced that by working together they have boosted sales by over £1m and are set to create more than ten new jobs. The SME team at WMG and MAN, a consortium of ten world class manufacturers based in the West Midlands, have been working together on a number of research led innovation projects, including the development of novel prototypes, materials analysis and the capture of funding for capital equipment.

They have now agreed to collaborate on a longterm innovation strategy that will also encompass leadership support to equip the management teams with the skills and know-how to implement their growth plans.

Barkley Plastics, one of the companies within the group, has seen a huge upturn in turnover through the collaboration. The WMG SME Team supported the firm to develop a range of storage solutions

BUSINESS GROWTH

Collaborating with an academic department like WMG gives us the ability to access the very latest technology and capability early on, so we can be first to market with new products and services. for phone chargers and ear phones, which are now being sold in Marks & Spencer, as well as the recently launched ski lock “Loqski” product.

Specialist PCB prototyping and assembly company SMT Developments in Warwick has also gained over £230k in investment for plant and capital equipment through its collaboration with WMG. The company worked with WMG’s Dr Ben Wood to complete a ‘Growing Places’ application that resulted in funding to support the extension of its facility on Heathcote Way and equipment to

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provide new services from the larger unit.

Tony Hague, Chair of the MAN Group, said “We have very big ambitions for the future, with my company PP Electrical Systems Ltd alone expecting to double turnover by 2015. Collaborating with an academic department like WMG gives us the ability to access the very latest technology and capability early on, so we can be first to market with new products and services.”

“We have found WMG’s approach to working with industry to be highly responsive, efficient and effective and are delighted to have formed a long-term agreement and plan for future collaboration activity.”

Dr Mark Swift, Head of SME Programmes at WMG, said: “We are delighted to be working with the MAN Group who have an ambitious innovation and growth strategy. WMG is all about applying research to the real world and through the MAN Group we have been able to make innovative ideas become a reality, which has led to new jobs and growth within the manufacturing sector.”

WMG’s SME service is free for businesses in the West Midlands with less than 250 employees and turnover of €€50 million.

Email wmgsme@warwick.ac.uk or visit www.warwick.ac.uk/iipsi for more information.

SPECIAL REPORT | AUTUMN 14

NEWS

AUTUMN 14

>> Growth in the Piper-line DLA Piper’s Birmingham office is gearing up for growth; via new recruits, promotions and even an international secondment.

Maryna Bychkova has arrived from the firm’s Kiev office to join the corporate team at its Victoria Square House base as an associate.

She specialises in corporate law, insolvency, IP and media law, and will assist in the coordination of the cross-border transactions for which the firm’s advisory teams are well known.

The office has also welcomed two new senior associates, and five new associates, the latter of whom all qualified through DLA Piper’s training scheme.

stone and copper-clad beams.

Ashley Hancox, a senior director in CBRE’s office agency team, said: “It’s great to have our own front door in this much sought after location in the central business district. The new office provides CBRE employees and clients with modern office space and facilities and supports our plans for growth.

“The move has given us the opportunity to introduce flexible working practices, a paperless system and upgraded amenities.

There are showers and lockers for those cycling or running to work, and for clients we have enhanced meeting facilities, free Wi-Fi and a coffee bar with views of the cathedral.”

>> Delivering investment

>> Consultancy’s ‘des res’ Property consultancy CBRE has moved its Birmingham HQ to the landmark 55 Temple Row building, after it had a £1m makeover from owners Hermes Real Estate.

It now has 13,500 sq ft on the ground and first floors, having signed a 15-year lease at £22 per sq ft. The Temple Row building was originally occupied by the Bank of England, and latterly has been home to the Bank of Scotland and Lloyds Bank.

The building, built between 1969 and 1972, was designed by Fitzroy Robinson & Partners and features Portland

SPECIAL REPORT | AUTUMN 14

The world’s largest privately-owned ‘next day’ parcels delivery business has unveiled a massive investment programme at its Staffordshire HQ, following six months of record-breaking growth.

Karl Brown, the CEO at APC Overnight, says 140 full-time jobs are being created at its Cannock-based national sorting centre, including posts for fork-lift truck drivers and warehouse staff.

Last year, the firm invested significantly to increase capacity at the centre, and Brown says it can now process between 20,000 and 25,000 parcels every evening.

Further investment in two new ‘sky sorting’ systems – which will be installed above the existing ones – will allow the centre to handle between 15,000 and 20,000 parcels per hour, when the systems are fully operational.

Brown says the business is also adding 45 new double-deck curtain-sided trailers to its trunking fleet, which should be in place by the end of 2014.

It is 20 years since APC Overnight was established, and it now delivers more than a million parcels a month, through a nationwide network of 115 depots.

Brown expects the new investment, in staff and systems, to help the firm lift its turnover growth above the impressive 14% it achieved in 2013.

“This is the latest of our strategic plans to

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meet the growing nationwide demand for our services. An efficient operation at our national centre is key to our ability to maintain exceptionally high customer service levels,” he says.

“Having grown so rapidly since we were formed, it’s important that we continue to show the same levels of ambition.”

This is the latest of our strategic plans to meet the growing demand for our services

Dr Mark Swift

>> Training the top 20 A new initiative to provide business leadership training for 20 senior managers from fast-growing SMEs has been launched

by WMG, at the University of Warwick, in partnership with Santander.

The postgraduate award programme has received £40,000 of support from the

BUSINESS GROWTH

AUTUMN 14

bank, significantly reducing the cost of the project, which aims to boost managers’ ability to lead and drive innovation into their organisations.

Dr Mark Swift, head of SME Programmes at WMG, said: “This initiative blends our longstanding experience of delivering executive education and cutting-edge research, with a suite of additional support from Santander’s SME Breakthrough Scheme, networking opportunities and innovative product and service technology.

“The emphasis is to equip the leaders of today and tomorrow with the very best tools to encourage and embed a culture of innovation.

We will teach participants about the latest modes of management, as well as offering hands-on experience of using new technology, to grow and develop a business.”

The programme consists of five threeday modules delivered over the course of a year covering such critical issues as strategic innovation, leading, managing and building skills, financial and commercial awareness, selling, marketing and reputation management, and operational efficiency and quality.

John Williams, Head of Santander’s Breakthrough Programme, said: “We are delighted to support this programme, which will offer 20 individuals a fantastic opportunity to transform the way they run their businesses.

“Santander is committed to helping UK businesses prosper, and our Breakthrough programme helps fast-growth businesses fulfil their potential through a programme of capital and support.”

NEWS

>> Manufacturing firm set to double in size An international manufacturing business, which has its European HQ in Birmingham, is building a major production plant at the city’s Advanced Manufacturing Hub. HydraForce, which already employs 280 people at its Aston site, predicts that by 2018 it will have almost doubled that figure, thanks to organic growth and the new factory.

Work started on the 120,000 sq ft building in September, and the company expects to be able to move its entire business and all employees to the new location next summer.

Managing director, Peter Macdonald, says the new building will expand its manufacturing space by 70,000 sq ft, and allow it to switch the production of more products to Birmingham from its parent company in the United States.

The move will see HydraForce become the first tenant at the Advanced Manufacturing Hub, one of the city’s six economic zones which were created to offer growth environments for key strategic sectors.

It is hoped that these specialist areas will ultimately unlock £1.5 billion of investment in Birmingham, and generate close to 50,000 jobs.

“The hub is the ideal site for us,” said Macdonald. “It is very close to our existing premises in Aston, so it will be easier for our staff to move with us.

“We see our staff as a key reason for this company’s resilience and growth, so we are determined to do everything we can to retain their knowledge and expertise.”

Aston Reinvestment Trust (ART)

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Loans to go, Loans to grow | We cover the West Midlands

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SPECIAL REPORT | AUTUMN 14

OVERVIEW

AUTUMN 14

ON AN UPWARD TREND Ian Halstead talks to members of Birmingham’s professional services community to judge where their sectors are on the growth curve DLA Piper’s office managing partner Charles Cook has been at the heart of the region’s M&A community long enough to distinguish a false dawn from a genuine upturn.

Equally, Chambers and Partners have been ranking the world’s best lawyers for almost 25 years, so when their current UK guide judges Cook “a stalwart of cross-border private and public transactions”, it’s clear that his opinions really do carry weight.

So how does he judge the current mood, and transaction level, among M&A specialists in the West Midlands and further afield?

“There has definitely been an increased appetite locally and nationally,” says Cook.

“We saw the first signs probably 18 months back, and volumes are continuing to rise, so it’s safe to say we are now in an upward trend.

“We have a lot of international clients, so we’ve gained significant benefits from their combined presence and there are certainly more overseas buyers acquiring UK firms than vice versa. We’ve done a lot of deals for Dignity, the funeral providers, and have also been busy elsewhere in the services sector.

“In food and beverages, we act for Two Sisters, who are always an active client, and we did the Vion UK acquisition for them at the start of 2013, which was when the market showed the first signs of picking up.”

Cook says DLA Piper’s manufacturing specialists have also been keeping busy, although more on general legal work than M&A activity, which would be expected at this stage of the economic cycle.

Among the deals coming from the United States, he cites the firm’s work for Discovery Communications, a major player in the media sector, with 14 channels accounting for almost 900 million subscriptions.

Cook also points to the renaissance of the IPO (initial public offering) market as another solid sign of a return to growth.

SPECIAL REPORT | AUTUMN 14

“The private equity houses are now exploring that route for an exit, and it’s very viable,” he says. “We’d completed six IPOs up to the end of August, and have another eight on the go. ”We’re also winning new clients, which is always a welcome sign, and have picked up work from two firms in the FT-SE 100. Even before the latest work, the year to April was our best for five years, so there’s much to be optimistic about.”

At Finance Birmingham, chief executive Sue Summers is overflowing with positive vibrations – understandably given the speed at which the city council venture has evolved, since it was formed less than four years ago.

and we’re always aiming to make a return for the council or the LEP.” Other programmes followed, such as offering support for hi-tech early stage ventures and companies in the creative sector.

But the most spectacular boost to Finance Birmingham’s resources came via the Advanced Manufacturing Supply Chain (AMSCI) initiative, which brought in an eye-opening £350m.

The innovative funding competition, conceived by the Greater Birmingham & Solihull LEP, aims to improve the competitiveness of supply chains in advanced manufacturing sectors, increasing their ability to supply the global OEMs and attract new suppliers to the UK.

We’ve so far created, or protected, between 1,600 and 1,700 jobs.

Everything we do benefits the local economy, and we’re always aiming to make a return for the council or the LEP “We were launched in December 2010 as a public-private partnership, using finance specialists from the private sector to provide access to finance for local companies, who couldn’t access bank funding, and began with a Business Loan Fund of £10m,” she recalls.

“The typical loan was between £100,000 and £1m, we charged market rates, and as companies repaid their loans the money was recycled to other borrowers. We weren’t a lender of last resort, but were willing to talk to companies who had plans for growth, but couldn’t get the money they required.

“Then we were given £25m to provide equity loans, as well as normal business loans, and through that programme we’ve so far created, or protected, between 1,600 and 1,700 jobs.

Everything we do benefits the local economy,

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“We now manage and deliver AMSCI nationally, which takes our funding up to almost £500m,” says Summers. “Some of our work is managing and investing funds, some is managing and monitoring the various funding programmes.

“It’s been a remarkable success for the city council and everyone involved, and we don’t think there is another organisation which works in the way we do. I think one of the reasons we’ve achieved so much, over a short period, is that we do care passionately about getting the right funding to the right people.

“We’re 100% owned by the city council, and share premises at Baskerville House with Marketing Birmingham, so our relationship with Neil and his team has really blossomed, which has helped enormously.”

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Clockwise: DLA Piper’s office managing partner Charles Cook, Finance Birmingham chief executive Sue Summers, Grant Thornton’s Birmingham office managing partner Dave Munton, GVA associate George Jennings There’s an equally upbeat mood at Grant Thornton’s Birmingham office, where managing partner Dave Munton was another to identify the origins of the current upward trend some 18 months back.

“It’s very pleasing to see so many companies we work for are well positioned for growth, and that the strategies they prepared during the slowdown are being activated,” he says.

“To me, one of the long-term strengths of the regional economy is the quality of its R&D activity, and not just from the giant plcs. It’s great to visit an engineering company in the Black Country turning over £40m-£50m, and to see the real richness of their innovation.

“The appetite for funding is also coming back strongly. For years we’ve seen companies conserving cash on their balance sheets,

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because there was too much risk about.

“Now, we’re seeing them looking to invest in people, plant and machinery to drive innovation. We’re also seeing a greater willingness from banks and other funding sources to lend to such companies.”

However, Munton is concerned by two issues which have dogged the region’s economy for decades – skill shortages and productivity.

“The biggest challenge to me is talent, because there does seem to be a dearth of really good people around.

“Productivity is another area where we have to do better against the best in Europe, although that is partly a legacy issue.”

Munton also has an intriguing take on the trend for companies to look to enter new markets and create new products.

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OVERVIEW

“It’s perhaps easier to adopt those strategies than to address the day-to-day business issues, but it would be dangerous to embark on a growth strategy if those fundamentals weren’t in place,” he says.

“Sometimes, it’s also good to look at your overseas competitors, to see what drives their success, and then consider if your business needs to change its culture.

“I’ve always believed that advisers can play a significant role in supporting a company’s growth plans, but their role is changing. In the past, we were typically seen as being technical experts on specialist issues.

“Now many companies see advisers more as ‘critical friends’, who can share a wider range of expertise and help to implement best practice. The pace of change is so fast that often someone from the outside can spot issues which might be overlooked.”

At the property consultants GVA, associate George Jennings is of similar mindset.

He admits: “I deal with the office market in Birmingham and the first half of 2014 was pretty poor in terms of take-up.

“Saying that, there is enough pent-up demand for the full-year figure to be around 650,000 sq ft, which is around the 10-year average.

“There are definite signs of an upturn though.

Vodafone moving from Edmund Street and taking 23,000 sq ft at Colmore Plaza, for example, isn’t the type of sizeable relocation we’ve seen in recent years.

“Shoosmiths are looking for around 25,000 sq ft, but in the city core they have only three options; Snow Hill, Colmore Plaza or Two Colmore Square. Deloitte’s requirement for 60,000 sq ft has been around for some time, so will they start to look more closely as the supply pipeline contracts?

“We’ve got between a year and 18 months of Grade A space available in the centre, which you imagine would lead to an upsurge of refurbished space. When we get to early 2016, there will be a real tipping point.

“Of course, the upside of a tight supply pipeline, and the pressure on prime rents, is that investment opportunities come forward.

“M&G Real Estate bought Two Snowhill in an off-market deal, early in September, and you’d expect similar interest in other Grade A office schemes.” n

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ENTREPRENEUR

AUTUMN 14

WE’RE BOXING CLEVER – OUR DAD WOULD BE SO PROUD Jitha Singh, managing director of West Bromwich-based CBS Packaging, explains how his father’s vision and his ethics have been the catalyst for the family’s business success

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My dad came here from Singapore in 1968, with just £2 in his pocket, and although he’s sadly no longer with us, everything we do now in terms of how we view ourselves, and our customers, is still driven by him.

We started in the box trade in 1996, just me and my younger brother, in Digbeth.

We didn’t have bank support and weren’t exactly sure what we were doing, but we registered Corrugated Box Packaging as our name, and after six months, we realised manufacturing cardboard really was a business that would work.

At the end of the first year, we’d hit £1m turnover, and were delighted, but at the end of the second year, we were still doing £1m, which was a bit of a surprise, so we went back to all our customers and contacts in the industry to see what was going wrong.

We’d been trying to do everything in-house, but just hadn’t got the space. We realised we needed to move to premises where we could invest in new machinery and to increase our manufacturing capability, so we found a 33,000 sq ft site in Smethwick.

We also recognised that although manufacturing your own products gives you an advantage, that it’s still an industry, like any other, which is about making sure customers are satisfied, with the quality and the price and the service levels you provide. I’d say 90% of our business is driven by service.

Now, the business is owned by myself and four brothers. We haven’t got an ‘O’ level between us, but we are ambitious and very hard-working.

Our strategy right from the start has been to identify companies in our industry that are under-performing and need investment, then to buy them and relocate them to our premises, so that could be Manchester, London or elsewhere.

It’s all about longevity and stability. If we use our own sites then we are building the equity, and it also gives us long-term security. We bought a paper merchants in Manchester, for example, which turns over £4m by itself and put money in to develop its business.

We have a site in London, which turns over £10m, and here in West Brom we’re doing >>

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ENTREPRENEUR

about £12m, so we’re growing steadily and the business is sound. Dad’s philosophy was to invest during recession, and that’s really paid dividends for us.

When the economy crashed in 2008, we spent about £700,000 on new machinery and upgrading kit, and we continued to invest here and at all our sites. Between 2008 and 2012, we spent between £8m and £10m, and whatever some people might say, we have never had a problem getting funding from the banks.

Our risk spread is very low, so our biggest customer accounts for only around 6% of turnover. We’re always careful to treat everyone with the same respect and to provide the same level of service, if their orders are £20,000 or £500,000, which was another of dad’s beliefs.

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I guess the way the relationships have evolved though, now we’ve built up a solid range of customers, is that in the past we depended on them, and now they depend on us. The one thing which hasn’t changed though is that we’re still passionate about them, and I think that’s critical.

In 2010, we moved to a five-acre site in West Brom, which is where we are now. We’ve got 160,000 sq ft here, which gave us space to install a new machine so we could produce corrugated board in-house. It’s 100 metres long, so it’s an impressive sight.

At the moment, about 70% of our trade is for standard single-colour boxes, the sort you might see coming through your letterbox from Amazon for example, but we are investing heavily in digital printing.

In January 2014, we bought Connect

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We’re careful to treat everyone with the same respect and to provide the same level of service – which was another of dad’s beliefs Packaging, who were based in Essex, and are one of the UK’s largest independents in our industry and put £2m of investment in there.

We liked what they did, we studied their

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business, they’d been trading successfully for 70 years, so we approached them and made an offer.

Our business model really hasn’t changed over the years. We want to grow year-on-year, and we’re always keen to make acquisitions. We looked closely at two companies this year, and if an opportunity came up further afield, Scotland for example, we’d certainly look at it.

If we see synergies in another company, and the price is right, then we’ll do the deal.

We’ve got established distribution networks operating in the Midlands, London and the South-East, and Northern England, so it may be that we consider the North-East next.

We don’t have a strategy which identifies a region first, and the potential of a business comes second though, it’s always about what an acquisition might do for us, how it might

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ENTREPRENEUR

fit into our group structure and what level of investment it would need.

Looking ahead, with regard to customers, being able to manufacture our own board does give us the edge over other independents, because most of them order from out-of-house suppliers.

I am sure our investment in digital kit will pay off too. We’ve just bought a new five-colour Hewlett-Packard printer for our London base, which should be going in towards the end of the year, and that will enable us to offer much more sophisticated products.

At the same time, you can’t afford to neglect your core business, so we’ll be investing there too. Once we took Connect on board, the group workforce went up to around 250, so we’re quite a sizeable company.

I know dad was really proud of what we had

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I know dad was really proud of what we had achieved. If he could see us now though, I’m sure he’d be even more impressed achieved, when he was with us. If he could see us now though, I’m sure he’d be even more impressed to see how far we’ve all come since those early days in Digbeth. n

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SUPPLYING PRACTICAL SOLUTIONS Warwick Manufacturing Group’s Professor Jan Godsell, tells Ian Halstead why effective supply chain strategies are a key driver of business growth

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INTERVIEW

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It’s long been a disappointment that many observers of the supply chain scene are as dry as dust; reflecting their obsession with data, tables and spread-sheets, as if they seek intellectual comfort in numbers.

Not so Jan Godsell though; whose conversation is sprinkled with considered opinions, underpinned by a solid bedrock of experience in both private and public sector, including time with ICI/Zeneca Pharmaceuticals, senior management roles at Dyson, plus a PhD and MBA from Cranfield.

So when she muses about how growing corporates should best manage their supply chains, it’s impossible not to be swept along on a wave of infectious enthusiasm.

“Some companies aren’t ready for growth, because they can’t ramp up production and sales when they have success, and unfortunately, they only see the problem when they run into it,” says Prof. Godsell.

“There are different definitions of supply chains, but the four core elements are planning, sourcing, making and delivery.

Unfortunately, many companies focus just on one aspect and seek to optimise it in isolation.

“If you look at the supermarket sector, for example, some of the biggest names are coming badly unstuck because their business models are fundamentally flawed.

“The big four brands spent the last 10 to 15 years stripping out costs from their supply chains to deliver ‘everyday’ low prices, but then focused on discounts and one-off promotions, without stopping to consider what impact that had on their suppliers.

“However, the budget brands have a business model which is much better aligned. Their supply chains for everyday items is very stable, but for special ‘sale days’, they bring in items from outside Europe at high volume, which creates tremendous customer interest and doesn’t disrupt their existing supply chain.

“Successful companies in all sectors are reducing costs today, but also stimulating future sales growth, and that’s fuelled the sharp rise in discount retailers. The ones who are suffering are trying to boost sales, but only doing so in ways which increase costs and dilute margins.”

Prof. Godsell also identifies a recurring theme among hard-pressed management teams in

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Successful companies in all sectors are reducing costs today, but also stimulating future sales growth, and that’s fuelled the sharp rise in discount retailers companies looking for growth.

“A business only has so much management head-room, so you can’t chase every opportunity you see. It’s about knowing where to focus. First you identify your underlying demand, automate as much as possible to satisfy it, and then focus on the 10%-15% of demand which is really driving sales,” she says.

“During a turbulent economic period, many companies think they must respond to anything and everything, but they can’t.

They’ve also got to be careful about choosing the market they want to expand into.

“Dyson is an amazing success story, but when it first went into Europe it didn’t do very well.

There were lots of hard floors and cylinder models weren’t popular. It then went into Japan and failed, because its models didn’t

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fit into the typical ‘cleaning cupboard’ and the motor gave off a smell which customers didn’t like.

“Its response was to open specialist R&D centres to tailor products for Japan and the US (where they like very powerful upright models) and now those markets are Dyson’s top three, along with the UK. “It’s never just about the product itself, or even the pricing, there are always nuances to a market which need to be analysed and understood in advance, along with cultural connotations. ”Companies looking for growth always need to decide if they should be focusing on local, national or global markets, and need to have a clear rationale for their decision-making.”

One of the great long-term strengths of

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the Midlands economy is its aerospace and automotive sectors, and Prof. Godsell believes both are well positioned for growth.

“I like the way that the OEMs – JLR and RollsRoyce are great examples – are investing heavily for growth and taking their supply chains with them, so the SMEs are gaining a great deal from those relationships,” she says.

“However, it doesn’t matter whose supply chain, or what sector you are in, companies must take great care with their sales strategies, and they always need to consider the best case, median case and worse case. If you only plan for success, and something goes wrong, it may be too late to adapt.

“In the early stages of growth, flexibility can be gained through people, it’s not always about automation, and especially when you’re just setting out, do make sure your product is a success before anything else.

“Even then, if you look to invest in automation, and have the cash to do so, identify the risks in your supply chain and learn how to mitigate against them before you proceed. All supply chains are multiple B2B relationships with one B2C relationship at the end, so each relationship needs to be solid.

“You also need to consider the tensions which can arise inside a business, for example among the sales teams when it’s close to the monthend or the year-end. People will want to shift more items, which may cause problems for your suppliers, who may charge more because of the short deadline.

“It’s quite possible that you end up eroding your margins, but then have to pay bonuses to the sales people who have caused the problem. The crucial thing is to understand your business metrics and to use them to drive in best practice. ”Some metrics are customer-focused, some are business-focused, but you need to use them both to fine-tune your strategy, not just occasionally, but as a consistent and ongoing element of your model. ”The most important aspect about delivering a growth strategy is to accept that we work in a complex and fast-changing environment, and that assumptions about a business model, regardless of the company’s size or sector, must be constantly revisited, tested and challenged.” n

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INTERVIEW

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FINALLY KEEPING THE CUSTOMER SATISFIED JLR transformed its customer satisfaction ratings through its association with quality control specialist Gobel & Partner. Managing director Dino Kyriacou tells Ian Halstead the story behind the successful pairing For year after painful year, Jaguar endured annual embarrassment when the benchmark JD Power Survey of customer satisfaction showed the famous British marque languishing way down its league table.

Sometimes, Jaguar bosses tried to laugh the results off, claiming it was because their models didn’t have the cupholders beloved

by American motorists. Sometimes, there was just an awkward silence.

This May though, the same survey saw Jaguar claim top spot – and for the third successive year.

It’s been a remarkable turnaround, and Aldridge-based Gobel & Partner (G&P) has been the catalyst, through a partnership with JLR judged the best ‘supplier relationship management’ programme in the Chartered Institute of Purchasing & Supply’s 2013 awards.

The G&P story begins in 1994, when two quality control experts from Germany set up in the UK to manage their relationship

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with General Motors. Kyriacou arrived four years later, and in 2005, he bought G&P after a fundamental disagreement with his business partner.

“I wanted to make us the best we could be, and was committed to a long-term strategy. He wanted to make lots of money through short-term success,” recalls Kyriacou, with the crisp precision which characterises his conversation.

“I invested £3.5m on specialist bespoke software, then bought out my other partner in October 2006. I restructured the business, brought in a new board, and we doubled in size in two years, but then came the recession, and it was like putting caravans in a circle.

Volumes fell and no-one was buying new cars.

“Fortunately, we operated from four key centres; the UK, Germany, Hungary and the Czech Republic, and our presence in Eastern Europe saved us. The slowdown also gave us time to sit back and think about what we were doing.”

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G&P started to focus on a smaller number of clients, of which JLR was one, and when the 2008 JD Power survey for quality showed Jaguar in ninth place and Land Rover in a shameful 34th, it was clearly time for change – and on a dramatic scale.

“Then, JLR had sixteen different service providers on its three sites, so there was very little ‘visibility’ between them all. Our whole concept was about removing disruption, so we went into these plants, looked at what was happening, and took away all the data to identify and eradicate the issues,” says Kyriacou.

“Then we started putting in new systems and processes, we became the single service provider, and brought everything together. In the launch phase, we acquired something like 380 people from the JLR sites.

“They had 40 launches planned in five years, so there really had to be a transformation in the way quality control was tackled. Then, we began to push back along their supply chains, focusing on how products were designed, so they didn’t cause issues at a later stage, and took our analysis back to the suppliers.

“We began working with JLR’s Tier One suppliers, showing them where problems had arisen, and stressing that we wanted to work in partnership with them, to drive quality standards up and protect their reputation.

“Our engineers then went in to audit their systems, and we worked together to gradually eradicate every issue which we had found in the supply chain. Once everyone realised that improvements in quality meant more business, and better relationships, we were able to set up a long-term programme to keep standards high.”

The G&P approach was so appreciated by JLR that its engineers are now working at

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the manufacturer’s giant new plant in China, which is expected to begin production this year, with an initial annual output of 130,000 vehicles.

The firm’s other major customers include BMW – for its pressings plants in Swindon and Cowley – Daimler, General Motors, Honda and McLaren, as well as many of their Tier One suppliers.

Significant geographical growth is likely, as Kyriacou admits, with India, Thailand and Brazil high on the list, following China, as is expansion into new sectors.

“We began to wonder why we were only in automotive,” he says. “We could supply our services to aerospace, rail or even yellow goods. For quite a while, all our effort and energy went into JLR, but now I’ve strengthened the board with three

SUCCESS STORY

new appointments, and we’re looking to really grow.

“Spreading our model out into new sectors and looking at new geographies will enable us to de-risk our activities, and the new directors will allow us to develop new products and services.”

The only obvious major challenge to Kyriacou’s ambitious strategy is a shortage of goodquality engineers, in the UK and overseas.

“We now employ about 800 people, half in this country, but it is a problem finding the right people, with the correct skillset for our industry. We almost need a sandpit for these engineers to play around in, so they can learn our systems and processes, and discover how to interact with suppliers,” he jokes.

“We’re talking to everyone who might be able to help. Coventry University, for example, have

been very supportive and we’ve spoken to the Engineering Employers Federation about its apprenticeships schemes.

“Our work requires such a range of abilities, right from the semi-skilled, through electronics and up to white-body experts, that we are confident we can give young engineers a vision and a career path, if we can only find them.

“We have set up a recruitment business, Vivate – which will not be using zero-hour contracts – which should help us to find more of the right people, to work with us, or elsewere in the automotive industry.

“However, there’s no doubt that finding the right people, and in sufficient numbers, is still going to be a real challenge, not just for us, but for this country’s industrial and manufacturing sectors in general.” n

LOCAL FOCUS GLOBAL REACH DLA Piper is a leading Midlands international law firm with 4,200 lawyers located in more than 30 countries throughout the Americas, Asia Pacific, Europe and the Middle East, positioning it to help companies with their legal needs anywhere in the world.

Our services are delivered by leading local specialists, advising on the international stage covering all aspects of law.

Quality, empathy and strength – it’s the service you need, where you need it.

DLA Piper, doing business in the Midlands and wherever the Midlands does business.

For more information please contact:

Charles Cook Office Managing Partner – Birmingham T +44 (0)121 262 5808 charles.cook@dlapiper.com

www.dlapiper.com DLA Piper is a global law firm operating through various separate and distinct legal entities. Further details of these entities can be found at www.dlapiper.com Copyright © 2014 DLA Piper. All rights reserved. | SEP14 | 2823748

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Simon Beech, managing director of precision engineer Nasmyth Group, discusses its growth strategy with Ian Halstead

Conglomerates fell out of fashion in Britain more than 20 years ago, after the City’s appetite faded for large and unwieldy corporations assembled by corporate raiders with an eye for a quick buck.

Unfortunately, the merit of bringing together a group of companies in the same sector, and blending their combined capabilities into a force more powerful than the sum of its components, seemed also to have been lost.

Until, that is, Coventry-based Nasmyth appeared on the scene in 2003 to create a new form of conglomerate and harness the collective strengths of a series of SMEs operating in precision engineering, through an ambitious M&A programme.

The group now controls 15 companies, employs close to 800 people and generates turnover north of £60 million, and there’s no-one better than Simon Beech – who has been with Nasmyth from the start – to explain its impressive journey.

“If you look at every company acquired by Nasmyth, they all had pedigree and history in their own right. They cover many sectors within engineering; aerospace, automotive, defence, energy, marine, medical and space, and their combined expertise is remarkable,” he says, and his pride is evident.

“We’ve got three companies who specialise in

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metals and machining, so they can supply the large OEMs and the primes with engine rings of up to two metres, but they can also cope with orders at the opposite end of the scale.

“We’ve also got businesses who can do anything in forming, fabrication or welding, and others who specialise in surface treatments and cadmium plating. Nasmyth’s strength is that each company has the capacity to supply external customers and other members in the group, as the skills are complementary.”

Nasmyth now spans the gamut of precision engineering; whether orders are low volume or high, from complex structures such as airframes and sophisticated gearboxes down to the smallest component, for uses varying from minesweeper sensors to flight simulators, and in any metal, non-metal or alloy you’d care to name.

Inevitably though, even its well funded and targeted acquisition programme was halted by the disintegration of the developed world’s economies in 2008.

“When recession kicked in and the funding market collapsed, we didn’t buy another company until 2014,” recalls Beech. “We saw a reduction in volumes of between 15% and 20% during that period across our markets, but now we’re back to growth

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and expecting an increase in revenues this year of around 10%.

“We did continue to invest in training during those years though, because we were determined not to turn off the taps. We did lose some people, but we kept recruiting apprentices and upskilling our engineers, so we’d be ready when the markets came back.

“Finding the right people in sufficient numbers is a challenge across engineering and manufacturing, but we think we’re trying everything we can. We’ve had some people in on placements from overseas universities, especially from France, and have already taken some of them on.

“Towards the end of 2014, we’ll be launching our Nasmyth Academy and we already have a network of centres of excellence. We want to provide solid career paths for the people we take on, but it’s going to be an ongoing challenge.

“Sometimes, we have lost good people to our customers. We do try to retain them, but in some instances, we’ve had young people offered a chunk of money to join another business, and that’s very hard to resist.”

However, whilst Nasmyth may be seeing some employees being lured out of the door, new customers, especially from among the ‘primes’, are coming the other way to ease

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SUCCESS STORY If you look at every company acquired by Nasmyth, they all had pedigree and history in their own right – they cover many sectors within engineering and their combined expertise is remarkable

the corporate pain.

“We’ve won a major contract from a North American prime, and a European enginemaker,” says Beech. “We’ve got a strong and established presence in France, Germany and Asia, and now we’re targeting the North American market.

“Saying where our orders go is slightly tricky, because we are often supplying someone in one country, whose main contractor is based elsewhere, but judged by the final

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destination of our orders, I’d say around 60% go overseas.”

It’s an impressive percentage, particularly given the repeated calls from business leaders, politicians and trade associations for everyone to focus on an export-led recovery.

Despite the evident success of Nasmyth’s longterm M&A programme, Beech also stresses that much of its growth has been organic.

“We have always believed in a ‘buy and build’ strategy. Our first business was

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doing £13m when we acquired it, now it’s doing £28m,” he says.

“We invested a lot in new forms of fabrication, new machinery, new plant and even a new building.

“At the moment, we’re considering three expansions across the group. We’re on the first, spending about £1m on new space here (Exhall, Coventry), we hope new units will be completed for the second by the end of the year, and the third should be done by the end of Q1 2015.”

The new space will soon be occupied too, if Nasmyth’s bullish forecasts for future revenue streams prove well-founded.

“We believe our growth pattern will continue, across all our sectors,” says Beech. “All the indications are positive for aerospace and lots of new programmes, and derivatives, are being launched.

“Defence volumes have contracted in the last four or five years, of course, which presents challenges, but aftermarket sales and retrofit contracts are still there, and one of the core strengths of the group is its diversification across a wide range of sectors, which is a tremendous asset to have.” n

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INSIGHT

GIVING THE WORLD A WARM WELCOME Marketing Birmingham’s chief executive, Neil Rami, explains how Greater Birmingham has become the UK’s hotspot for both foreign direct investment (FDI) projects and relocations

The first thing to stress is that to reach where we are now has taken a great deal of hard work and commitment by many dedicated people; in our organisation, the city council, the LEPs, the universities, UK Trade & Investment (UKTI) and our other partners in the public and private sectors.

There’s also no doubt that the UK economy has changed in a way which helps our regional economy.

The increased focus on innovation and investment in manufacturing gives the West Midlands a higher profile, and we have greater traction overseas than ever before.

We’ve also benefited from being much clearer about our targets; so we look at areas of the global economy which are showing significant growth, and identify sectors in which we have particular expertise, such as digital media and hi-tech, life sciences, advanced manufacturing, professional services, and food and drink.

There’s no doubt Greater Birmingham has enjoyed tremendous recent success. FDI was up almost 90% in 2012-2013, creating around 2,000 jobs, which was more than any other region, and the Greater

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Birmingham & Solihull LEP is outperforming all other LEPs. However, everyone has to be realistic and to understand that activity does ebb and flow.

The arrival of Deutsche Bank in Brindleyplace has been a stunning success, not just in terms of employment numbers, which are eyecatching, but in the way its model has evolved from back-office functions to front-end business. However, we aren’t going to capture a project of that scale every year, because for all Birmingham has to offer, there are very few such projects around.

What we can do though is to keep getting the message across, in the UK and overseas, that the city is very ready to accommodate

companies looking to set up here and expand, and that the area’s physical infrastructure and support mechanisms are stronger and more effective than ever before.

You look at the investment which is going into Birmingham Airport, New Street Gateway, Grand Central and the new Metro extensions, and it’s not simply transforming those locations, it’s building a tremendous image of Greater Birmingham as a place which is confident about its future.

When we go overseas, it’s clear that people – and it doesn’t matter if they are in the United States, or China, or India – are really impressed by the city, its dynamism and its culture. >>

When we go overseas, it’s clear that people – and it doesn’t matter if they are in the United States, or China, or India – are really impressed by the city, its dynamism and its culture

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Even a few years ago, Birmingham didn’t have much of a visitor economy, but now it really does, the numbers from the UK and overseas are up sharply year-on-year, and tourism spending has become a significant stimulus to business growth here.

The next twelve months will also be tremendous in sporting terms. The Rugby World Cup is here in 2015, and Villa Park is one of the stadia.

The third Ashes test is also at Edgbaston next summer, and both events are bound to see a spike in visitor numbers.

Next year is also the tri-centenary of St Philip’s Cathedral, so we’ll see another influx of visitors for its various celebrations, and there’ll no doubt be lots of documentaries and features on its history, which will promote the city.

The West Midlands has always been focused on the value creation end of the economy, and its entrepreneurial talent has been evident since the Industrial Revolution.

Now though, a much wider audience understands what we have to offer and we can see the impact on our inward investment figures.

Saying that, I think our offer is broader than traditional FDI, because we are better focused on helping companies to settle into the area, and to resolve any skills challenges or other issues they might have.

We also have our Business Catalyst programme, which helps companies set up satellite offices here, so they can have a presence in Birmingham, which hopefully then leads on to further investment and job creation.

The area has also become a genuine hotspot for start-ups, which in turn creates interest from potential investors, because they want

to feel they are putting their money into a city which isn’t just relying on existing companies and established sectors for growth.

Finance Birmingham has now become a significant force and is really adding value to the city’s offer.

Sue Summers and her team now have almost £500m of funding, and they’ll be absolutely crucial as they push out support to smaller companies.

The Manufacturing Advisory Service is also doing a fantastic job in helping companies, and their supply chains, become more productive and more innovative, which are key drivers of business growth.

UKTI too, are working better with the private sector than they have ever done.

What we have now are several pebbles in

What we can do is to keep getting the message across that the city is ready to accommodate companies looking to set up and expand here, and that the area’s infrastructure and support mechanisms are more effective than ever before SPECIAL REPORT | AUTUMN 14

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the pond which are creating big ripples, and some things are also happening which will be fantastic for our economy’s future growth prospects.

In digital, for example, Birmingham is becoming the BBC’s university. The decision of HS2 Ltd to bring its construction HQ here immediately created interest from the infrastructure industry, and not just from local companies.

The biggest danger (at least in theory) is that some people start to relax, and imagine that the city’s economy is on a growth curve which will just naturally continue, which isn’t true – here or anywhere, of course.

It’s always great to celebrate the good stuff when it happens, but then it’s back to the hard work, and to making sure that we’re all identifying the right opportunities and working together to make them happen.

We feel we’ve developed a strong sense of where Birmingham is now, but the next challenge is to focus on 2020 and beyond, and to be constantly thinking about what sectors will be important to the next generation.

We’ve all seen cities cling on too long to the industries of their past, and then lose their way, so we’re all determined that will not happen here. n

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COMPANY PROFILE

Forward thinking finance Finance Birmingham helps businesses with viable plans for growth from across the country to realise their ambitions.

As a public/ private partnership, Finance Birmingham brings together the industry leading experience of private sector experts with the public sector’s drive to support businesses.

Finance Birmingham provides a range of funding for small and medium-sized businesses across all industry sectors.

It currently holds more than £90 million of new funds to support such businesses, and is looking for more investment opportunities.

Finance Birmingham offers more than just funding.

Its experts work with businesses to develop their growth plans, advise on funding requirements and structure repayment routes.

The partnership recently launched the largest individual growth capital fund for small to medium sized businesses (SMEs) in the West Midlands. Its £56million Mezzanine Fund which is supported by the Government’s Regional Growth Fund is expected to help more than 40 businesses and create or safeguard 5,000 jobs across the region over the next five years.

In addition, Finance Birmingham holds Regional Growth Funding, suitable for most businesses and more specific funds tailored to the needs of manufacturers and toolmakers, as well as creative and tech start ups.

Finance Birmingham offers more than just funding. Its experts work with businesses to develop their growth plans, advise on funding requirements and structure repayment routes.

To discuss how Finance Birmingham can help your business to grow, contact the team on 0121 233 4903 or check the website www.financebirmingham.com

BUSINESS GROWTH

Left to right, Marcus Hook (Finance Birmingham), Angela Spires, Ivan Shaw, Ian Thomas (all LSUK).

FINANCE BIRMINGHAM ASSURES BRIGHT FUTURE FOR LIGHTSENSE UK LTD One of the country’s leading commercial lighting specialists, Lightsense UK Ltd (LSUK), has received a £1.2million boost from Finance Birmingham, a national provider of funding for growing businesses, to achieve ambitious expansion plans.

The investment will help the Bromsgrove-based firm to double staffing numbers from 12 to 24 and also facilitate placing large orders to help meet current demand from a number of blue-chip customers.

Founded in 2012, LSUK is at the forefront of the design, development and manufacture processes of LED and induction lighting systems, which are increasingly favoured by environmentally conscious business sectors throughout the UK thanks to their long life span, light output and cost efficiency.

Ian Thomas, Managing Director of LSUK, said: “In the space of two years, we have gone from a start-up business to a major player in the commercial lighting industry, creating effective solutions for our clients in a financially-pressured, environmentallyconscious market place.

“These are exciting times for LSUK. Finance Birmingham’s investment ensures that we are able to further develop the range of our products to a growing number of large corporate customers, while looking to double Bromsgrove workforce to deal with an increased demand.”

LSUK is one of the first companies to take advantage of Finance Birmingham’s £56 Mezzanine Fund, the largest individual growth capital fund for SMEs in the West Midlands. The fund, which is supported by the Government’s Regional Growth Fund, is expected to create or safeguard more than 5,000 jobs by helping more than 40 West Midlands businesses. The lighting firm will also benefit from an investment from Finance Birmingham’s £9m debt and equity fund.

Marcus Hook, Investment Manager of Finance Birmingham, said: “The LED lighting market has experienced considerable growth over the past few years, showing little sign of slowing down. LSUK has impressively capitalised on recent advances in this sector – our funding will help the firm to fulfil customer demand and continue to grow an impressive customer list, both in this country and overseas.

“The deal to provide investment to LSUK was completed in just over a month – a very fast turnaround. We recognise that time is key for businesses experiencing growth and by moving quickly, we are allowing the company’s management team to focus on its business operations and achieve exciting future plans.”

LSUK were offered advisory services by Odyssey Corporate Finance and Jo Bligh, Director of Thinking Legal LLP. Finance Birmingham was given legal guidance by Freeths LLP Solicitors.

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in association with

CLEARING THE ROAD BLOCKS TO SUCCESS The issue: How do we harness the potential of ‘fast growing businesses’ in the West Midlands region?

There was passion aplenty at the Hotel Indigo, when BQ2’s Live Debate considered how businesses with growth strategies might best realise their potential.

The line-up of speakers had been crafted to ensure creative conversations would result, with a mix of private sector entrepreneurs and figures from the public sector.

The former included Marcus Richardson, the no-nonsense chairman of Pure Business Services, who learned his business skills with the deal-hungry double-glazing tycoon Brian Kennedy, before honing them as the youngest divisional MD within billionaire John Caudwell’s Phones4U empire.

Among the public sector panellists were Sue Summers, chief executive of Finance Birmingham, and Aston Business School’s Professor Mark Hart, deputy director of the

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Enterprise Research Centre, a national project involving five universities which focuses on issues driving SME growth.

The first sign of deeply-held feelings being released came after Prof. Hart suggested that all the small and ambitious firms he met, and mentored, had encountered problems accessing finance.

Summers was so animated by his comment that she managed to break off the tip of her pencil … which did at least indicate that the public sector had fully embraced the concepts of austerity.

Richardson then provoked an intriguing discussion, suggesting that academic qualifications were often not required as a foundation for success.

“I’ve worked for entrepreneurs, like John and Brian, met quite a few more, and almost

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TAKING PART Marcus Richardson, Managing Director, Pure Business Services Gavin Tedstone, Business Principal, Pure Business Services Ninder Johal, President, Black Country Chamber of Commerce Sue Summers, Chief Executive, Finance Birmingham Jon Bew, Partner, Irwin Mitchell Professor Mark Hart, Aston Business School David Ogden, Managing Director, Key Safe Company Jitha Singh Sahota, Managing Director, Corrugated Box Supplies Nick Pulley, Regional Director, Midlands, Santander Corporate & Commercial Banking Mike Gahir, Relationship Director, Santander Corporate & Commercial Banking Sukhjeeven Nat, Relationship Director, Santander Corporate & Commercial Banking Taking Notes: Ian Halstead, Editor, BQ2 In the chair: Caroline Theobald, BQ Live Venue: Hotel Indigo, Birmingham

BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

none of them have had a formal education.

You do wonder if people can be too academic about the issues around companies and how they grow.”

“I haven’t got a single ‘O’ level,” admitted Jitha Singh, managing director of his family’s business, CBS Packaging, and another entrepreneur swiftly followed him into the confessional.

“I got three ‘O’ levels, and they were in metalwork, woodwork and technical drawing,” said David Ogden, managing director of Key Safe Company.

Warming to his theme, Richardson suggested that the best source of guidance and mentoring for fledgling entrepreneurs,

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looking to devise and deliver growth strategies, would be from those with greater experience and success.

“I dislike the Dragon’s Den format, but I do like the people who don’t win, the ones who get a great deal of advice. You can see them when they have their lightbulb moments, and when they realise what they need to go away and do.

“I wish there was some way for people like that to plug into the skills and knowledge of successful business people.”

Prof. Hart agreed that companies looking to access finance, before embarking on growth, needed the support of those with greater experience in the process.

“Businesses do need someone to hold their hands. My main concern is about how we unlock the routes to finance. It is about having the right kind of conversations, and at the right time, but unfortunately, I think many people expect to be rejected, so they don’t apply for the finance they need.

“You can’t grow without external finance, and if people don’t get the proper guidance, they can end up just plodding round the system, even though they may well have

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a sound business model and a well thoughtout growth strategy.”

“I do take your point Marcus,” added Finance Birmingham’s Summers, “and if you’ve been privileged to work with someone who is a talented entrepreneur that’s great, but a lot of people just don’t have that opportunity and can’t gain access to mentors.”

“I don’t think you always need external support,” suggested Ogden. “I think there’s real merit in role play. Before any of my team go to see a bank, or someone else who might be able to provide finance, they pitch their presentation to me.

“Rather than failing in front of someone on the outside, they fail in front of me. We all

DEBATE

benefit from the process, and I always find that role-playing is invigorating. ”Although saying that, I learned a huge amount in my early years from a local entrepreneur, because I was employed as his chauffeur. I drove his Rolls-Royce here, there and everywhere, as he was doing deals and discussing business, and I just sat there, and listened to everything.”

Ninder Johal then agreed with Prof. Hart’s observations, about the potential impact of complex and cumbersome bureaucracy in preventing access to finance.

As president of the Black Country Chamber of Commerce (BCCC), but also as director of a firm which designs and manufactures >>

My main concern is about how we unlock the routes to finance. It is about having the right kind of conversations, and at the right time – unfortunately, I think many people expect to be rejected, so don’t apply for the finance they need

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hi-resolution speakers (HRA Loudspeakers), he certainly has insight into the process from both sides.

“I sit on the Black Country LEP board which vets applications for funding from the Regional Growth Fund (RGF). After we had the last round, I had a call from someone who had submitted an application.

“I talked to him at length, about his experience and his background, and he was clearly a successful entrepreneur. This individual had a business model which was sound and well-researched, and if his application for funding had succeeded, he expected to create something like 200 jobs in the area.

“Unfortunately, because he hadn’t got the time to articulate his growth strategies to the right people, and because he couldn’t do all the RGF paperwork to the standards which were required, the application never even reached the vetting panel.

“The longer I spend in business, and the more I learn about people’s attempts to access funding and grant support, I am convinced that in 95% of cases, the problem is that companies fail to engage with the right people, who could help

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them during those crucial stages.”

Nick Pulley, Regional Director for Santander Corporate & Commercial in the Midlands, saw logic in Johal’s observations.

“One approach we believe makes a real difference, is to connect people from different sectors in an environment where they can have valuable conversations. It doesn’t have to be too formal.

“We just create the environment; such as a roundtable discussion on a specific topic, or a masterclass with a business that’s leading its field; then step back and wait for things to happen.”

“Bringing together people with different skillsets does have significant benefits, but it’s also about us all working together to make available a wider range of support and assistance for these companies,” added Jon Bew, a senior finance partner with Irwin Mitchell, in Birmingham.

Mike Gahir, one of Santander’s relationship directors, agreed, but considered the bigger challenge to be one of confidence.

“Most firms we see are very professional, have the right systems and processes in place, and a strong structure at board level.

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“Sometimes, it’s just about self-belief. SMEs often don’t exude the kind of confidence and knowledge which they need, to persuade other people that their growth strategy and their business model are solid.”

“That’s true,” admitted Ogden. “However, the biggest challenge is that most SMEs don’t have the finance to buy in those resources which they need.”

“Perhaps that’s true,” replied Gahir, “but we want to help businesses achieve their ambitions. It’s not in our interest to sit there with money in our pockets. We understand that there is no such thing as an ‘average’ business.

“I know I speak for Nick and the rest of us, when I say we will always work with a business, get to know them and understand what they need and how we can help them get it.

“A successful growth strategy is never just about accessing finance though,” suggested Singh. “You need passion, you need belief in your people and your products, you need to understand the value of innovation, and - if you’re in manufacturing - you need to constantly invest in capital equipment.

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I also see many instances where the public sector and the private sector fail to work together as they should – and people from both sides keep blaming the others. We need greater engagement “If you’ve got all those elements, you’ve got a great chance. I think back now to when we started in the box industry, at the end of the 1980s. There were something like 24 independents in our sector, and as new comers, we were obviously the smallest.

Now, there are probably ten left, and we’re in the top two.

“The most important element though is managing cashflow. It’s OK talking about mentoring, and giving companies the right advice, but most businesses fail because they can’t generate sufficient cash.”

Pure’s Richardson suggested that the era of the internet opened up huge opportunities for growing companies to access the information they required, especially if they were trying to reduce the amount they

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spent on external support and advisers.

“A lot of what could make a difference is about signposting though,” suggested Pulley, who also chairs the Leicester & Leicestershire Enterprise Partnership.

“If you’ve never heard of a particular SME grant programme or business support initiative, you don’t have time to spend trawling the web trying to find out what you need.

“This is where LEPs and Chambers of Commerce can add real value – by providing that vital signposting service. I would encourage SMEs to engage with the Growth Hub in their Local Enterprise Partnership, as early in their respective planning cycles as possible, to see what might be available to them.”

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DEBATE

The comment brought the BCCC’s Johal back into the debate, and with passionate force.

“To me, the biggest single challenge facing many companies looking to grow is that they have small management teams, who are doing all the basic stuff each day from 9am to 6pm, and they’re just so focused on operational matters, they don’t have time to think about the big stuff.

“I also see many instances where the public sector and the private sector fail to work together as they should, and people from both sides keep blaming the others. We need much greater engagement, because that is the secret of success.”

Summers had been keeping her own counsel since the ‘pencil moment’, but she couldn’t let those comments pass.

“I have to challenge that view. Finance Birmingham is living proof that a public-private partnership can work, and work successfully.

We’re seeing lots of companies embarking on growth strategies coming to us for support, and we’re always willing to consider any application for any of our programmes.”

Aston’s Prof. Hart admitted the area’s number of fast-growing businesses was not impressive, at an estimated 45,000, >>

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In some countries, such as India and the US, they worship business leaders, but that doesn’t happen here. If you had a Rolls-Royce parked outside, it wouldn’t take long for someone to scratch it but said the Greater Birmingham & Solihull LEP was aware of the challenge.

“We’re talking to Andy Street and Steve Hollis, and we agree that it’s about getting all the various support networks to work together,” he suggested. “Our solution is to develop a really high-profile entrepreneurial network here, and I believe that will fix most of the problems we have been talking about.”

Richardson was clearly unconvinced.

“Where are the leaders though? Who are the generals to lead us forward? Do we have the figureheads and entrepreneurs in this country who people will want to follow? ”The building blocks may be in place, but who is the person who can become a Business Czar, and who can inspire people to take on the challenges to growth we’ve been talking about.”

“I’ve been in business for 40 years, and I’ve seen business champions come and go,” retorted Prof. Hart. “Yes, there have been times when I despair, but I really do feel positive now because of the power of the individual networks, and because I see the potential we can harness if we can bring them all together.

“To be fair to the LEPs, they had to spend two years talking about what they planned to do, because they didn’t have the money. Now money has been released, it’s their time to move forward.”

“They aren’t just public sector bodies either,” added Summers. “The Greater Birmingham LEP is chaired by Andy Street, who is the managing director of John Lewis, and the Black Country LEP is chaired by Stewart Towe, who is the managing director of the Hadley Group.”

“I just wonder if our country’s culture is wrong,” said Richardson. “It’s bugged me all my life that people in Britain don’t seem

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to like people who are successful in business.”

“I wonder who is in charge of driving business growth too,” said Gavin Tedstone, Pure Business Services’ Business Principal.

“Who is there to sell the message and to get it into our schools?”

Johal too had concerns about the UK’s approach to entrepreneurship and business.

“I was in Mumbai last October,” he recalled, “and was flicking through the channels on the TV. There must have been nine or ten dedicated to business and finance, and they

were all broadcasting in the morning, so they must have been on for 24 hours.

“In some countries, such as India and the United States, they worship their business leaders, but that doesn’t happen here. If you had a Rolls-Royce and parked it outside in the street, it wouldn’t take long for someone to scratch it, and the media doesn’t help either.

“Unless we create an environment in which entrepreneurship is applauded, and business success is celebrated, it will be very difficult for the country’s economy to prosper at it should.

We need a change of culture.”

“It saddens me that we are still having the same conversations now, as I remember having back in 1981, but I do believe that this is finally the time for change,” added Prof. Hart.

A suitably upbeat thought to end the Live Debate, which – judging by the hubbub of animated chatter that began at the formal conclusion – had proved a stimulating and enjoyable evening for all. n

Perhaps we all need to widen our horizons Well, this BQ Live Debate really did have it all.

We had one panel member blaming bureaucracy as the major barrier to finance; a second claiming academic achievement is no guarantee of success in this day and age, and a third championing the need for passion and belief in your product and your people.

What everyone did agree on, however, was the inarguable benefits of connecting people from different businesses, sectors and backgrounds, to find solutions to the issues which cause many business owners to lose sleep at night.

Perhaps we all spend too long focused on our own businesses and forget the rewards that can be reaped from being guided by more-experienced others, or perhaps even the simple pleasure of helping others who are at the beginning of their own journey.

That is one reason why properly-structured events still have a place in the diaries of business owners. Experience shows it can be invaluable for a business owner to take time-out and get some much-needed stimulus.

Breakthrough Masterclasses, developed by Santander over the past three years, provide a unique opportunity for businesses to engage with, and learn from, some of the UK’s market-leading companies, such as Google, McLaren, Innocent Drinks and Saatchi Masius, who share their experiences of doing business further down the growth path.

Santander Corporate & Commercial has a simple vision; ‘to see banking your way, not ours,’ and to concentrate on how we can help you succeed.

So, as well as the existing Masterclasses, our upcoming sessions will include topics such as the recruitment and retention of high-quality employees and the development of a sustainable and ethical culture in a fast-growing business.

Watch out for these, and more, in the months ahead, and you can meet like-minded peers and entrepreneurs, as well as gain valuable insights and practical advice.

Nick Pulley, Regional Director, Midlands, Santander Corporate & Commercial

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COMPANY PROFILE

Hotel offers affordable glamour in the heart of the city One of Birmingham’s top city hotel’s takes business packages to new heights.

Based in the heart of our vibrant city centre and sitting 23 and 24 floors up in Birmingham’s iconic Cube building is one of the city’s most contemporary and chic hotels, the four-star Hotel Indigo.

This unique boutique hotel boasts 52 beautifully sculpted bedrooms and suites, an exclusive members-only health club and spa and a Marco Pierre White Steakhouse, Bar and Grill which sits above it offering breath-taking panoramic views across the city.

Ideally located within walking distance of Birmingham’s shopping and dining destinations, attractions and transport links, Hotel Indigo provides a perfect base for business and leisure guests alike.

For business guests, the Marco Pierre White Steakhouse Bar and Grill offers the perfect solution for a private lunch, board meeting and champagne reception in its private dining room.

Likewise this private, versatile space presents an impressive backdrop for any private dinner party.

For those who want to impress, the LaurentPerrier Champagne Bar, also situated on level 25, provides numerous opportunities. With its unrivalled city views and sumptuous décor – designed by luxury bespoke interior designers Mr McQueen – this room will impress guests by both day and night. Offering Champagne Afternoon Tea on weekday afternoons, live lounge-style music on Thursday and Friday evenings, this room can also lend itself to press conferences, launch parties, corporate receptions and private celebrations.

For Hotel Indigo guests who like to work out or relax in the morning or during the day, theclubandspa on level 6 of The Cube offers a full suite of state-of-the-art gym and spa facilities, with beauty and body treatments also available.

Sales Manager for Hotel Indigo Birmingham, Kelly Talbot, said: “Hotel Indigo prides itself on its unique offering. Not many hotels can boast uninterrupted city views from its rooms, a rooftop restaurant named under a prestigious celebrity

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chef with a Times top 30 listed rooftop terrace.

“It’s not just the design, food and drink offering and superb views that make this a great place to stay and entertain however. The hotel and associated restaurant, bars and theclubandspa which is located on level 6 of The Cube, all aim to offer a complete experience for every type of guest.

“The Marco Pierre White Steakhouse, Bar and Grill focuses itself on offering affordable glamour.

It’s about good food, cooked well and in stylish and impressive surroundings and this ethos runs right down from this rooftop restaurant and bar, through the hotel and into theclubandspa.

“Service is key and our team members in every area of the business work hard to deliver the highest of standards. This means that from first contact through to the end of their visit our guests

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will receive consistently good, polite and efficient service. For businesses who choose us to entertain or simply provide accommodation for their clients and key personnel, this ensures they can feel confident in the services we are providing.”

Kelly continues: “All of this contributes to good business, and right now business is doing well!

Come December we will have been open for three years and in the last two years food and drink sales have increased by 20% and our hotel and corporate packages prove ever popular.”

CURRENT OFFERS IN MARCO PIERRE WHITE STEAKHOUSE, BAR AND GRILL Lunch: enjoy two courses for £20 or three courses for £25 off our lunch menu.

Private Dining Room: Day delegate rate, which includes lunch at £55 per person.

HIGH SOCIETY Weekend guests who wish to let their hair down of a Saturday evening can enjoy a meal in the main restaurant before soaking up the atmosphere of the bar in to the early hours during our High Society live music night. From 11pm, sip cocktails, champagne or another favourite tipple with friends under the stars and above the twinkling city lights whilst listening to lively electroswing. That’s High Society at Marco Pierre White Steakhouse, Bar and Grill.

Hotel reservations: 0121 643 2010 Marco Pierre White Steakhouse, Bar and Grill: 0121 634 3433 theclubandspa: 0121 643 2200 info@hotelindigobirmingham.com Hotel Indigo, 200 Wharfside Street, The Cube, Birmingham B1 1PR

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INTERVIEW

AUTUMN 14

SUPPORT INITIATIVE HAS ‘MAS’ APPEAL Ian Halstead talks to Lorraine Holmes, area director for the Manufacturing Advisory Service (MAS) in the West Midlands, and two very different clients; precision stampings specialist Brandauer and data experts Disklabs Over the years, myriad government initiatives offering support to the SMEs which drive our economy have come and gone, but few mourn their passing.

Most were weighed down by bureaucracy, lacked strategic direction, and the skill-sets of their advisers rarely dovetailed with the requirements of their clients, so when MAS was conceived by the Department of Business, Innovation & Skills, the omens didn’t look good.

However, its 80-plus team of specialist advisers, based across England, has since been hugely impressive in coaxing, guiding and mentoring SMEs to devise and deliver growth strategies, across 14 major business sectors.

“There are many ways we can do ‘valueadded’ work with clients, but essentially we try to be both proactive and reactive to improve a company’s ability to compete and develop the tools for growth,” says Holmes.

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“If we looked back 10 years, the West Midlands had a long tail of under-performing companies in sector supply chains, but now the picture is much brighter, and one reason is the work MAS has done to help identify business opportunities for SMEs, but also to help remove their challenges and hurdles.

“Our advisers might make companies aware of new and emerging sectors. We are delivering a specialist programme GROW:OffshoreWind, for example, which offers up to £500,000 of funding to help companies gear up to supply that sector.

“Sometimes, we help firms through their new product cycle, perhaps by introducing them to universities which have particular expertise in innovation or R&D in their sector, or by pointing them towards the Catapult network.

“There’s been a lot of talk about reshoring, but it’s now become a definite trend, and is another area where MAS can make a

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difference. We calculate that about 10% of manufacturing production has been brought back to the UK, because companies are looking to de-risk their supply chains.

“As more companies realise manufacturing is about the total landed cost, rather than just unit costs, we’ll see more work returning.

Not just in automotive and engineering either, we’re seeing textile products coming back because retailers can’t satisfy customer demand with supply chains half-way round the world.

“We can help SMEs looking to benefit from the reshoring trend, perhaps via retooling or through developing new products.”

It’s also clear that MAS advisers are not the cautious civil service clones, who wrapped companies up in red tape on previous support initiatives.

“They’re a quirky bunch, they all know their sectors, they understand business, and >>

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INTERVIEW

Rowan Crozier, MD of Brandaeur

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Lorraine Holmes, area director for MAS

Matt Jones, director for Disklabs

they also know how to inspire management teams, who are seeing challenges instead of opportunities,” admits Holmes.

“One element of the way MAS operates, which I know is much appreciated, is that although an SME might only be working with one adviser, they’ll get the benefit of the experience and nous of the whole MAS network. ”Most of the companies we deal with were started by someone with a big idea. However, they often don’t see the need to refresh their products, so a key area of activity for us is making them realise that diversification is a great way to take risk out of their business model.

“We appreciate that, especially during recession, entrepreneurs have been working in the ‘here and now’, and haven’t had time to consider fine-tuning their strategy, so our people go in and ask questions to get them thinking.

“We also try to develop long-term relationships with clients, so we might work on one project, but then go back in a few months or a year on another project. We’ve worked with some firms when they were start-ups, and are still working with them now, when they employ maybe 80 or 100 people.”

It’s a long time since the Birmingham-based

precision stampings specialist Brandaeur was a start up, as it celebrated its 150th anniversary in 2012, but it certainly has become a repeat user of MAS services, as chief executive Rowan Crozier readily admits.

He only stepped up from sales and marketing director at the end of August, but had been planning the company’s future growth strategy for some time, knowing MD David Spears was about to step aside.

“We turn over roughly £7m a year in components, and another £500,000 in highspeed precision tooling. We employ 54 people now, but have plans to lift that to 65 during the current financial year,” says Crozier.

“We’re trying to take on the skills challenge too. We have three apprentices, but by the end of 2016, I’m hoping 20% of the workforce will be apprentices. We have challenging targets for new markets, new

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regions and new products, and MAS is helping us in all those areas.

“We’ve also had funding from them, through our adviser Martin McKeever, for sales and marketing activity, such as attending trade shows and rebranding. They helped us develop a bespoke customer service structure and also brought the Great 200 Leaders programme to my attention.”

Crozier went on the latter initiative; a twostage process involving intensive presentations by high-profile speakers and one-off training sessions, followed by company visits.

“I found it very interesting and very powerful.

It’s designed to make you think, and it really does. The first sessions were very demanding, and later the coach visits you to help address the challenges you’ve raised,” he recalls.

“I got so much out of the programme, I decided some of the Brandaeur management team should sign up for it, but without MAS, I’d never have known it existed which sums up what a great relationship we have with them.

“Martin pops in one day a month, not always with a specific agenda, but just to keep us up to speed with what’s happening, regionally or nationally. The offshore wind project was very interesting, and we’re looking to explore possible opportunities in that sector. ”What I like about MAS is that it is manufacturer-focused and it’s targeted just at firms like us, who are looking to grow and to diversify, but just don’t have the time or the resources to identify all the ways in which those goals might be achieved.

“We’re looking to move into more addedvalue production of precision components, and in much lower volumes – perhaps in batches of 5,000 or 10,000, rather than in the millions as we are at the moment – and I’m sure Martin and his colleagues from MAS will be working with us again as that strategy evolves.”

About 10% of manufacturing production has been brought back to the UK – companies are looking to de-risk their supply chains

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Across the region in Tamworth is another contented MAS client, Disklabs, which has established an international reputation for its sophisticated expertise in data recovery, digital forensics and data erasure.

“We started in 1997 in the hard drive arena, and then moved into data recovery,” says director Matt Jones. “Our most successful product is the Faraday Bag, which protects data stored on electronic devices by preventing external signals from reaching them, so the information can’t be wiped, hacked or bugged.

“Law enforcement professionals are our biggest customers, but this bag is also popular with military personnel, intelligence agencies, the police, even trading standards officers. It’s for anyone really who needs to guarantee the integrity of devices they are using, or which they have seized or confiscated.

”We’re not spooks, but we do make products which they like, and as terrorists become more sophisticated in their use of digital technology, people working in counter-terrorism need to protect the data they are collecting.”

However, although the technological nous which went into the Faraday Bag’s design was all Disklabs, its commercial success has increased dramatically thanks to support from MAS, through the company’s adviser, Maxine Chapman.

“We’ve got years of experience in working for ourselves, but none of us had experience in manufacturing or marketing,” says Jones.

“Maxine and her colleagues suggested we shorten our supply chain by bringing production back from China to this region.

“Once everything was manufactured locally, we had much greater control, production costs were cut, and the quality was improved. MAS

INTERVIEW

also helped us redesign the bag, so it now looks much better.”

Like Brandauer’s Crozier, Jones is now a committed advocate of the service.

“It does take time and effort to get involved with them, but it’s absolutely worth it. I don’t suffer fools gladly, but I liked the approach of MAS, which can be quite brutal. They’ll help you if they can, but if they can’t, they’ll tell you.

“Through MAS, we got in touch with the defence security arm of UKTI, and their overseas markets people are helping us identify and explore the potential of new territories.

“Our turnover for the current year will be around £1.6m, and the work MAS has done has been responsible for a significant uplift in our trading. I couldn’t say enough about them.” n

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SPECIAL REPORT | AUTUMN 14

INSIGHT

AUTUMN 14

BOLD PLAN HELPS FIRMS AIM HIGHER Santander’s innovative £200m Breakthrough programme aims to identify the next generation of entrepreneurs and give them the tools they need to prosper. Ian Halstead finds out more There’s long been much to admire about Germany’s export-led economic model, but not until the country was lifted from recession by its fast-growing SMEs, was the merit of a powerful Mittlestand noted and envied world-wide.

As other nations sought to replicate its recovery, the UK Government’s faith was placed in Project Merlin, aiming to stimulate a new wave of business lending, via an agreement with four of the High Street banks.

However, although Santander accepted that the old methods weren’t delivering the resources Britain’s SMEs required, it decided to devise and deliver its own initiative.

Breakthrough was launched in 2011, and Tim Pezzack – then working for a rival lender, but now Santander’s divisional MD for the Midlands and Wales – admits he found its multi-layered approach very appealing.

“It was one of the main reasons I moved from my old ‘shop’, where I’d been for 24 years, because I’d never seen an initiative targeted at SMEs adopt such an innovative strategy,” he recalls.

“Our industry has seen so many lending programmes fail, because they were solely about providing finance, but Breakthrough was the first time a bank recognised there were many non-financial aspects to stimulating business growth.

“When the bank was meeting management teams at SMEs, they were raising issues such as marketing, technology, supply chains and new export markets, so elements to

SPECIAL REPORT | AUTUMN 14

address those challenges were factored into the Breakthrough model.

“Right from the start, it has been about much more than simply providing growth finance, it’s about making sure companies have all the tools they need to achieve their ambitions.

“We’ve set up Masterclasses, where executives can learn directly from global brands how they overcome particular hurdles, so we brought Innocent Drinks in to talk about supply chains, McLaren to explain the benefits and dangers of using advanced technology, and Saatchi Masius to discuss corporate branding.

“The Masterclass concept has been very well received, and we’re working with an ever-increasing number of entrepreneurs and companies who want to deliver these sessions in the future.

“Another frequent challenge for fast-growing businesses is access to talent – the difficulty in recruiting the right people with the correct blend of skills – so we set up a national internship programme, enabling talented

graduates to access paid work placements with SMEs. “We placed 500 people last year, and expect to treble that figure during 2014. SMEs get the youth, the energy and the different mindset of someone looking to forge a career in their industry, and the interns get a tremendous range of experience, and are paid for their efforts and commitment.

“Feedback from the companies indicates that they are very pleased with how the initiative is working, and we’re already seeing interns kept on in full-time jobs, and sometimes in senior roles.”

Assisting companies that wish to consider overseas markets, identifying potential customers in the new territories, and organising trade missions is another ambitious, and much appreciated, element of the programme.

“One very direct way Santander can add value is by using its contacts and knowledge in the international markets that SMEs are looking

Another frequent challenge for fastgrowing businesses is access to talent – recruiting the right people with the correct blend of skills – so we set up a national internship programme

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AUTUMN 14

Left: Santander’s divisional MD for the Midlands and Wales Tim Pezzack. Right: Santander’s head of growth capital Darren Hart to enter, Brazil, New York, and Abu Dhabi, for example,” says Tim. “We’ll identify growing companies in their target sectors, carry out market research using our people on the ground and, essentially, line up the right contacts for them to meet while they’re in town. It really suits companies on the brink of exporting, looking for contacts, buyers and potential partners overseas.

“Someone who had been on one of our missions called it ‘speed dating for SMEs’, and whilst I’d never used that expression before, it does sum up all the background work and research we do for customers, before their first meeting.”

Breakthrough’s final element focuses on driving sustainability into the culture and business model of companies – delivered via a partnership between Santander and Business in the Community.

“We start by benchmarking each SME, so their management can see how they stack up against their peers, then it’s about suggesting how they can impact on their communities in responsible and sustainable ways,” says Tim. “It is a very sophisticated approach to adopt towards business growth, but I find it very appealing. You can see the difference it makes to have a real cultural and physical investment in these companies.”

BUSINESS GROWTH

Breakthrough is intended for established SMEs with real potential to create future value, as Darren Hart, Santander’s Head of Growth Capital – whose team is responsible for delivering the funding streams within the £200m programme – explains.

“It wasn’t devised for start-ups, but for SMEs which have proven themselves in their sector, and are now looking for a phase of further significant growth,” he says.

“Growth Capital, aimed at businesses with turnover between £500,000 and £25 million, is the finance pillar of Breakthrough, and was developed because the bank recognised that standard solutions don’t always work for growing businesses.

“Interestingly, it is often the businesses with the potential to grow rapidly that find it the most difficult to obtain the funding they

INSIGHT

require. They need finance in order to invest, but want to retain control of their business and not give up valuable equity.

“It is a difficult situation for any ambitious entrepreneur, which is where Santander Growth Capital comes in. To be eligible for it, businesses must be able to demonstrate strong growth in turnover, profits or employment over the previous three years.

The Breakthrough programme has evolved steadily itself in its first three years, and Darren says the model will continue to develop, reflecting the differing requirements of the UK’s SME community.

“During the recession, many companies just focused on surviving, taking an understandably cautious approach to borrowing, but now the economic environment is improving, their competitors are investing and the challenges they face are changing.

“The Growth Capital team, who focus purely on coming up with the right debt structure for each SME’s requirements, is not just based in London but is represented around the regions and so dovetails very well indeed into the work of the relationship directors and the divisional MDs, such as Tim. “We have a great team in place tasked with growing this initiative, and now Santander is thinking of rolling the programme out globally, which I think is a very tangible recognition of Breakthrough’s success and the number of companies it has helped.

“It would be very satisfying for everyone involved with Breakthrough to see it being delivered in other countries, but most rewarding is knowing we are making a real difference to our customers, enabling entrepreneurs to fulfil their potential and create new jobs along the way.” n

It is often the businesses with the potential to grow rapidly that find it the most difficult to obtain the funding they require

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SPECIAL REPORT | AUTUMN 14

INTERVIEW

AUTUMN 14

HOW I CAME TO A SOUND DECISION Autins Group CEO, Jim Griffin, has just handed his corporate ‘baby’ to another … but it wasn’t easy, as he tells Ian Halstead Jim Griffin is every inch the modern entrepreneur; as he muses about controlling operations via KPIs, whilst settling into a spanking-new HQ on the outskirts of Rugby, and debating the merits of new territories for his company which – as its website says so elegantly – provides ‘sound solutions’.

The group, which designs and manufactures systems to reduce noise and heat for customers in the automotive, commercial vehicles, industrial and marine sectors, is on course for £30m turnover in 2015, from operations in the UK, Germany and Sweden.

However, Griffin admits that his arrival at the company – then called Automotive Insulation, and often referred to in the trade as AI – didn’t hint at such success.

“I came for a job as a managerial assistant.

Most of the time though, I was just pushing paper around, and got very bored. In my first fortnight, I caused the workforce to walk out after saying something undiplomatic.

“Our only real customer was Rover. We were filling a 40ft trailer three times a day, so probably a million items a year, and most were going to Longbridge, Solihull and Cowley. ”Labour relations weren’t great, partly because employment was so high and companies had to hang on to everyone, and even our staff were quite volatile. I was ordering all the materials, so I started trying to source them for more competitive prices.

“I was going through phone directories, sending out enquiries and trying to get costs down, but it was tough. We lost some contracts, so I started working in the morning, then going out selling in the afternoon.”

SPECIAL REPORT | AUTUMN 14

Griffin’s efforts paid off, turnover increased steadily as the years passed from £1m to within sight of £4m, and likewise, he rose to become general manager.

Suddenly though, MG Rover collapsed – and just as recession took hold.

“Unfortunately, the spirit had gone from the business,” he admits. “The two directors who’d been here for years had just been battered by all the troubles. I was really

on price and losing out in margins,” he says.

“Our IP (intellectual property) portfolio has been vital. Around 85% of what we sell now has a patent covering the design, the process or the tooling and we protect our IP very carefully.

“We recently moved into a £6m head office and factory. It wasn’t purpose-built, but we had the floor upgraded, all the power systems are ours, as is the low-energy lighting. The

I came for a job as a managerial assistant. Most of the time I was pushing paper around and got bored. In my first fortnight I caused the workforce to walk out after saying something undiplomatic worried; for my future, my mortgage, my wife and my family.

“There was a lot of distress for everyone, but eventually, three of us did a buy-out. Although Rover had gone, we had a relationship with a very large accoustics supplier in automotive, so there was potential.”

Griffin’s determination to diversify, and make innovation a core driver of growth finally paid off - with the first order for heat-shields.

“We couldn’t afford the new tooling immediately, so we made the components by hand at first, and we’ve still got that customer today. You always need to offer something different. Nothing good comes from being a ‘Me Too’ business, because you end up selling

44

old place was from 1970, and looked like a Dickensian shed, so it was time we moved.

“We’re doing more than two million parts a month now, and that’s just from the UK. We’re also supplying lots of OEMs including JLR, Aston Martin, Bentley, VW, BMW, Toyota and Nissan.”

The group’s international interests have also expanded apace; with subsidiaries already trading in Sweden and Germany, and India next up.

“We make our raw materials in Sweden, and heard about a company for sale in Gothenburg. We looked at it, and decided to run it as a 50:50 Joint Venture (JV). It’s into profit, and doing about £2m a year, which we

BUSINESS GROWTH

AUTUMN 14

can see reaching £5m in the medium-term.

“The German factory was in profit last December, six months earlier than expected.

It’s the ideal market to be in. Even in recession, new car sales are three times the UK. Our growth is now ahead of schedule because we hired some really good people.

“We have a great biochemist, a really good ‘meister engineer’ and a fantastic MD, who we poached from a competitor. Across the group, not counting India, we’ll do £30m next year. At Rugby, we’ll be employing around 150 by mid-2015, and 200 by the end of the year.”

The requirement for skilled engineers is so significant that Griffin has hired a special ‘talent manager’, but he doesn’t accept the

BUSINESS GROWTH

oft-heard view about skills shortages.

“It’s not hard finding qualified people. It is hard affording them. Even then, the big companies can afford to pay another £5k for them,” he admits. “We’re trying to create a better culture here, where everyone is multi-skilled.

“We’re working with MAS, Chambers of Commerce, LEPs and the colleges to develop our own programmes, and eventually hope to offer places on our courses to people from other manufacturers.

“Pay levels for the very best engineers are being driven up sharply though. Someone we could have brought in for £40k two years back will now cost closer to £60k.”

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INTERVIEW

However, the most dramatic change came in August, when Griffin handed day-to-day control over to Paul Walker, a former chief program engineer at JLR, and now operations director.

“I love my business, but it was time to refresh it, so I could influence it in a different way.

Stepping aside wasn’t easy. I found myself thinking: ‘Do I want to give up my baby?’”

It’s a decision faced by all successful entrepreneurs, when it’s time to focus on toplevel strategy. But Griffin’s wife is also his PA – and within earshot – so sounds of derision can be heard after his ‘baby’ comment.

It’s clearly time to leave Griffin to domestic matters. n

SPECIAL REPORT | AUTUMN 14

FROM JAM AND BREAD TO SOME SERIOUS DOUGH Worcester-based address data specialist Postcode Anywhere processes millions of transactions every day – and for some of the world’s largest brands, as co-founder Guy Mucklow explains >>

SPECIAL REPORT | AUTUMN 14

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BUSINESS GROWTH

BUSINESS GROWTH

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ENTREPRENEUR Usually when I meet people, they say they haven’t heard of our business, but I reply that they have probably had experience of our technology, but without realising.

When someone living in the UK uses a postcode to find an address, for shopping online, buying theatre tickets, ordering white goods or booking their holiday, then six times out of ten they’ll be using our systems.

Some of our customers are international brands; Tesco, Pizza Hut, Dowjones and LoveFilm for example. Some are charities who must be very efficient in their fund-raising campaigns, such as Oxfam, and others, like Graze, have a very dynamic business model with a heavy technology focus.

Using a postcode engine to bring up a precise address might not seem a great saving, if you’re only typing it once, but for the major logistics providers, such as Yodel or Canada Post, there are real business benefits.

If you type in post-codes repeatedly, particularly in Britain, we can save between 60% and 80% of your time.

Many British addresses are quite quirky, rather long and sometimes, especially in rural areas, they go right down to a specific house name, so it’s a significant saving. If you’re not using address validation, it is also very easy to get just one digit wrong and then the package or letter will go astray.

Around 5,000 updates also come through our data-bases each day, so customers are very confident they’re accessing the latest information.

The trend for online shopping has also helped drive revenue growth, and we’re seeing

AUTUMN 14

increases of around 25% year-on-year. This year, we expect revenues to be around £10m, and pre-tax margins are running consistently at 30%.

It’s hard to imagine, even for Jamie (Turner) and myself – who founded the business in 2000 – that it has become such a success, but we managed to survive the difficult early years, and now we’re established, have been able to maintain our competitive edge.

When we set up Postcode Anywhere, addresses tended to be checked via CDs which were posted out to customers, so we were confident that an internet-based service would really differentiate us in the market.

We lost money at the start ...we had so few customers, and so little cash flowing in, that if we went to a trade show to promote ourselves, we’d stop in the cheapest place we could find, and live on jam sandwiches and free coffee for two days

SPECIAL REPORT | AUTUMN 14

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Bizarre though it will seem today, when we began, many people took a lot of convincing that the internet was here to stay – probably because of the dot.com crash – and 28k modems were the norm.

We lost money at the start, and we were still not making a profit after four years, but we remained convinced we had a model which would succeed, although at one point I was paying out £15,000 a month just to keep the business afloat.

We had so few customers, and so little cash flowing in, that if we went to a trade show to promote ourselves, we’d stop in the cheapest place we could find, and live on jam sandwiches and free coffee for two days.

They really were hard times, not least because when problems arose with the business, we didn’t have the resources to throw at them.

Those first years also made us very sensitive about how much we were paying for work, and very pragmatic about how we solved our problems.

However, it did mean that right from the start, we focused on profits and margins rather than on revenue, and we still have the same mindset today.

Now though, we have a fantastic base for growth, and our focus is where to take the business and how. We’re both ambitious, >>

BUSINESS GROWTH

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ENTREPRENEUR

and determined to develop Postcode into something really significant in the technology world.

We’ve done several things to scale the business up from a big UK brand to one which is recognised internationally. We’ve spent about £2m on people and kit at the head office (at Inglis Marina) over the last 18 months, and still have space for future growth.

We’ve also strengthened the senior management team, so Jamie and myself can take a step back from the day-to-day business.

We’re conscious that founder-led companies can suffer because the founder keeps interfering, so we’re focusing on building the brand.

We’ve spent the last six months researching the potential for a ‘big data’ project which will be called www.trigger.com. Essentially, it will allow companies to expose more of their internal processes to customers, so they can serve themselves more efficiently.

A recurring problem for online retailing is that people get stuck in a process, so they abandon their attempts to purchase something and go off to a competing site.

Retailers need a new type of software to help identify such problems, and give customers a better experience. The Trigger

SPECIAL REPORT | AUTUMN 14

AUTUMN 14

concept is that it’s possible to put in place a series of interventions to keep people on the original site, and we’re at the beta-testing stage now.

Several companies, including Graze, are testing it for us, and then we’ll be looking to ramp things up for a launch toward the end of the year.

Postcode generates significant profit, so we’re looking to manage down those profits so we can re-invest into Trigger. There are now five people in the senior team, so all the business needs from Jamie and myself is the occasional light touch.

We’re putting an enterprise management

scheme in place, and have set aside an initial 5% of equity to fund it, which will rise to 10%, if certain targets are met, and will apply to everyone in the company.

Jamie and myself are also trying to combat the talent shortage in software coding, by setting up the Code Club to get youngsters interested, and are visiting local schools to promote the idea.

I’ve always believed that successful entrepreneurs should give something back to the people in their business, and also think about the long-term future of the industry they’re in, so it’s fantastic to now be in a position where we can do both. n

I’ve always believed that successful entrepreneurs should give something back to the people in their business, and also think about the long-term future of the industry they’re in, so it’s fantastic to now be in a position where we can do both

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BUSINESS GROWTH

MIDLANDS CONSTRUCTION SUMMIT

27 November 2014 National Motorcycle Museum BIRMINGHAM

DEVELOPING REGIONAL RESOURCES TO MAXIMISE NATIONAL OPPORTUNITIES The Midlands Construction Summit will bring together the Midlands construction industry and its supply chain to lead the way in

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Industrial Strategy for a leading world class UK construction sector – Construction 2025.

Government Chief Construction Advisor Other speakers include Major Contractors, National Housebuilders and key supply-chain material/system providers.

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Tickets cost £95 +VAT Exclusive 10% BQ reader discount Use promo code: BQDIS10 when booking online

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B US

“We ardently believe that our products can improve cycling performance. Our dream was to partner up with Team Sky so we could prove it on the world stage, accelerating our expansion into the road bike market.

Santander shared our passion right from the off, quickly securing us Growth Capital through their Breakthrough programme. Thanks to this, we’re now Team Sky’s Official Supplier of Bike Care Products for 2014.”

IT

Alex Trimnell MD, Muc-Off

N THE B

AC

Find out how the Breakthrough programme could help support your business. santanderbreakthrough.co.uk Or contact James Cooksey on 07590 265148 or email james.cooksey@santander.co.uk Simple Personal Fair What a bank should be Lending is subject to status.

The Breakthrough programme is available for businesses with a turnover between £500,000 and £25 million and strong, demonstrable growth in turnover, profitability and/or employment over the last three years.

Santander Corporate & Commercial is a brand name of Santander UK plc, Abbey National Treasury Services plc (which also uses the brand name Santander Global Banking and Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset Finance plc) authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register numbers are 106054 and 146003 respectively.

In Jersey, Santander UK plc is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991. Registered office: 2 Triton Square, Regent’s Place, London NW1 3AN. Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England. Santander and the flame logo are registered trademarks.

Santander UK plc is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website (www.gov.je/dcs) or on request.

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