From bootstrapped survival to fast-growth business
Young Gun Michael Phillips tells how the idea of a broadband price comparison service became an £11m turnover business
When we started out as a broadband comparison service in 2005, we had just two guys in a tiny, borrowed office. We cobbled together just enough shareholder money to pay our IT director. Our marketing director was paid purely on commission, so no profit meant no pay. He stayed in my spare room during the early days to keep him afloat. Then I bit the bullet and took a 70% paycut to work on the business too.
Broadbandchoices.co.uk was a bootstrapped company – with no external help or capital. Getting a funding partner never even crossed my mind back then. We built our business by being smart about the way we got site traffic, by creating a great customer experience and giving providers cost effective customers. Limited funds meant we were, and still are, focused on return on investment and on delivering a balanced business. We couldn’t risk being too reliant on any one source of traffic or advertiser, which makes us more resilient today.
That said, we have had our share of tough times. If it hadn’t been for some shareholder loans in year two, we might not have survived. But we’ve always understood that investors are not just looking for the right growth curves, they are also buying in to the management team, technology and product base.
Today, we’re a different beast. Some key events have led to big organisational improvements:
Tighter processes. In 2007 a small investment from a venture capital firm also brought our COO Jon Ingram on board. Jon was on a mission to drill into us the importance of operations and process. It is the infrastructure upon which the commercial and the marketing sides can grow. Things that originally kept us to a tight budget became false economies as we grew. We only recently hired a full-time HR manager which immediately allowed us to accelerate and improve the recruitment process, saving money and time.
Switching accountancy firms. Working with top accountancy firm BDO, although substantially more expensive than our original auditor, brings a much wider range of expertise. They have given support that will help facilitate our move into Europe and have been proactive in tax planning.
Taking on non-execs. Perhaps the biggest step change was opening our board up to new non-executive directors who can really test our ideas, drive us on in terms of strategy, and fill essential skills gaps – but the personalities involved are also critical. Boards are all about chemistry.
Nick White, is the latest addition to our board. As European shopping MD at Kelkoo, he will bring a wealth of experience and contacts to our own European expansion plans. He’s asking us lots of awkward questions, but that’s a good thing.
We are forecasting a turnover of £11m this year, up from £8m in 2011. As MD, delivering this level of year-on-year growth, especially based on only limited investment to date, is, of course, very satisfying and makes me really wonder what we could do with additional investment. And that’s the journey I’ll be looking to tell in more detail every month on Growing Business. I’ll be sharing my insights as our company goes through the biggest changes in its history and analysing some of the key decisions we took on our way here around issues like advertising, recruitment and sourcing outside investment.
Michael Phillips is managing director at Broadbandchoices.co.uk and in 2010 was named the haysmacintyre Top Gun , meaning he was chosen as the outstanding member of the that year’s Young Guns group. Follow his tweets here: @gustavlemmy