The Entrepreneur: Nick Mustoe, Kindred
Nick Mustoe funded a management buyout to create a thriving communications business with 70 staff, government contracts and clients across Europe. How did he do it?
Founder: Nick Mustoe
Company: Kindred LTD
Description in one line: Kindred is a creative communications agency comprised of 70 people across PR, social media, planning, strategy, data analysis, creative, design, digital development and advertising.
Previous companies: Mustoe Merriman Levy; Lowe Howard-Spink
12 month target: £8.6m
Describe your business model and what makes your business unique:
- Integration: We are the only agency to bring together advertising, social and PR expertise in one team of people, so we can offer the most effective communications solutions without being tied to one discipline.
- Behaviour change: We are a leading agency in the field of behaviour change.
- Employee-owned: The company is owned by its employees.
What is your greatest business achievement to date?
In 2008, Kindred was part of Tribal Plc. a holding company comprising over 50 companies all focused on supplying the public sector. After the 2010 election the coalition government set about a radical cost-cutting exercise including suspending all public sector communication expenditure – this lost Kindred 80% of revenue overnight. Tribal did not have the appetite to rebuild the business so I led a management buyout (MBO), taking Kindred independent.
70 ‘Kindredites' left Tribal in December 2010 with their computers, the board room chairs and not a lot else to start the task of rebuilding the company. Today we are of a similar size but more profitable than we were before the 2010 cuts happened.
What numbers do you look at every day in your business?
To what extent does your business trade internationally and what are your plans?
Currently, very little – we are not planning to open offices internationally, but we are increasingly working with our clients on a pan-European basis servicing out of London.
Describe your growth funding path:
I provided the finance for the MBO and have since then managed to run the company with an overdraft and no debt.
What technology has made the biggest difference to your business?
Social media – it is now the most prevalent and ubiquitous medium for those aged under 40.
It has gone from nothing to being factored into everything we do. Advancements in technology have also enabled a lot of production work to take place in-house. We used to outsource all production, but now we have our own studio and a team of makers based in our office.
Where would you like your business to be in three years?
This business has never been about seeing how fast it can grow – we judge our success by healthy growth in turnover, healthy growth in profit, the quality of work produced, and the loyalty of our staff.
For me, success means healthy numbers, satisfied clients, award-winning work, and a place where people like to work.
What is the hardest thing you have ever done in business?
Negotiating the MBO with Tribal group at an acceptable cost to give the company a future.
What was your biggest business mistake?
I didn’t have a clear succession plan when I first started my own company Mustoe Merriman Levy – I didn’t put enough emphasis on sustainable management to take over from the founders.
Piece of Red Tape that hampers growth most?
The additional resourcing that pitching requires now that we live in a world dominated by procurement processes.
What is the most common serious mistake you see entrepreneurs make?
Being too optimistic about the speed at which they will be able to build revenues.
How will your market look in three years?
The relentless march of social media will continue, becoming the most important medium.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
It will take longer and be harder work than you could ever imagine but, if you stick at it, success will come. You have to have staying power – be prepared to work hard and stay with it.
Racing and breeding horses.
Executive education or learn it on the job?
Learn it on the job.
What would make you a better leader?
I should network more.
What one thing do you wish you’d known when you started?
How expensive property would become!
One business app and one personal app you can’t do without:
Business: Stock Exchange. Personal: Racing Post.
I am afraid I have never been one for business books!