How we started a multi-million pound company with nothing but a fax machine
From re-mortgaging their houses to pitching on Dragons' Den, here's how Oly and Toby Richmond turned a love of cars into a national servicing enterprise...
Names: Oly and Toby Richmond
Company: Servicing Stop
Company description: We are the UK’s largest online car servicing provider, offering MOTs, services and repairs. We are transforming the industry to make it convenient, affordable and trustworthy.
Started in: 2009
Describe your start-up barrier:
The biggest challenge we faced early on was taking our business nationwide. Despite having started with just a fax machine in a spare bedroom, we now needed funding, and to contact garages all over the UK and convince them to join our network.
It wasn't hard to get the garages on board once they were in arm's reach, but we invested a lot of time and money into a small team of people who we had recruit the garages, speak to the mechanics, get to know them and undertake a comprehensive review of all of their financial data and insurances. This team is still going strong today as we are on a constant recruitment drive.
The second challenge for us was ensuring that all of our garages complied with our standards, quality assurances and company values so that our vision for the business would come true.
Unlike every dealership out there, we are not a franchise and do not own our garages. We hire the cream of the crop when it comes to government-approved garages and skilled mechanics; this means keeping checks and balances on them is essential.
The last challenge we were faced with was getting our pricing to align with what we wanted the business to be. They say when you buy cheap, you buy twice, but not with us. We wanted to make a premium product affordable, and we are still sticking to that promise today.
What were the practical steps you took to expand your business beyond the spare room?
We have always had entrepreneurial spirit and have trialled and tested other businesses which have and haven’t succeeded – but this business was something we were so passionate about, we were determined to make it our best and our only.
We started with nothing but a fax machine in a spare bedroom and a love of cars. Nonetheless we were fuelled by a vision of transforming the automotive industry to make owning and caring for a car affordable and less of a hassle.
We realised that we needed investment if we wanted this idea to turn into a business that could reach all corners of the UK and change the way British motorists have their cars serviced. So we both re-mortgaged our houses. As we both have partners and children at home, this was a massive decision to make. It gave us £60,000 to play with, which gave us a foot up – but it was far from enough to take us national.
Everything was looking positive, so we decided to pitch our company on BBC 2's Dragons' Den. We received three offers of £100,000 investment from Peter Jones, Deborah Meaden and James Caan, which was amazing.
However, what we really needed was people with experience and a track record in the automotive industry: finding the right investor, not just investment, is crucial for every entrepreneur.
Initially we accepted the offer made by Deborah Meaden, but we were soon approached by a private investor with a perfect industry background who offered us £200,000 investment for less equity. While the Dragons gave us an amazing opportunity for which we will always be grateful, it was a simple decision to make.
What was the outcome?
Working with our partners, we have grown from strength to strength. We have moved to bigger premises, employed more than 100 new members of staff and have since been operating at 100% growth each year for the last three years. We have also quoted more than £425m worth of work to customers since 2009.
What three key questions should other companies ask themselves while planning growth strategies?
- How much equity am I willing to give away in exchange for investment?
- What is your goal for the next five years? Is it to go regional, national, digital? Find a goal and stick to it.
- Is this venture worth re-mortgaging your house for – especially when you have children?
What one piece of advice should entrepreneurs with ambitious plans take on board?
Not every risk pays off, so while following your heart, make sure you do the maths too. Think about everything logically as an outsider looking in, as opposed to from the perspective of the passionate person behind the idea.
Is there anything you would do differently?
When we were rapidly growing in the beginning, we made the decision to hire managers for key departments to ensure everything was standardised and running smoothly.
But when you have invested time, money and essentially your life into a business it is hard to dissolve some of those powers and responsibilities to somebody else. Perhaps we should have made this decision quicker.