Always Home Ltd: Mark Smith
Startup profile: Home really is where the heart is for Mark Smith
Mark Smith already has a thriving property company at the age of 29, starting the company after he found it impossible to obtain affordable housing. He talks to Startups.co.uk about how he intends building for the future.
Startup profiles go straight to the hub of the action by speaking to entrepreneurs who have literally just started up. We find out what made them decide to start their own business, how they got it off the ground, the obstacles they've overcome and the barriers they still face. We'll look at their hopes and aspirations for the future, and then, in six months time, we'll go back and find out how they're getting on.
Name: Mark Smith Age: 29 Business: Always Home Ltd Type of business: Property Development Start date: November 2001
When did you first decide you wanting start your own business? Having spent all of my life around people who have run or continue to run businesses on varying scales, it seemed the logical thing to do. These people all seemed to have the one thing that I was seeking which was freedom of choice. From an early age I noticed they were free to make decisions about their future and rightly or wrongly, each day they made choices about their business and their life.
Tell us about your businessAlways Home Ltd is a property development company based in Birmingham, specialising in quality homes for the young professional market, both in the rental and resale sectors. When people are shown around one of our properties, they always make comments about the nice touches we've made. It could be as simple as putting an air freshener in the bathroom or a bunch of flowers on the kitchen table but we've differentiated ourselves from others in the marketplace. Our existing tenants know that nothing is too much trouble for us, so much so, they've become advocates for the company. The benefits have been second to none, as we've found that rather than settling for lesser accommodation, people would rather be placed onto our waiting list, and wait for an Always Home Ltd property to become available.
What gave you the idea for the business? The idea of a property business came from the most unlikely of circumstances. At the time, I was involved in I.T. as a database developer and the work took me away from home and I relocated to Berkshire. Due to the exorbitant house prices, I couldn't afford to purchase anywhere and when I moved back to the Midlands I'd begun researching buying from property auctions. Sitting at my desk one day, I had a eureka moment, if other people can buy and sell houses, why can't I?
What makes you think there's a market for your business? We all read about this property boom that's happening and our properties alone have increased in value by well over 30% in less than 12 months. Also, I think there'd be a lot of unhappy estate agents out there if no market existed.
Once you'd decided to start a business, what did you do first? As I had no formal qualifications, and therefore no pieces of paper to prove I was a capable businessman, people seemed to frown upon my idea. Having to spend two nights a week at college and then further nights studying as well as working full time is a very big commitment.
What research did you do?Initially, I spent a very long time figuring out how the whole operation was going to be financed and it's very interesting to see what financial help is actually out there, such as private investors, The Business Angels Network, and banks. There's a whole heap of ways to finance a business, you just need to do a little investigative work, to uncover the best way for you.
What advice did you seek? I approached Business Link and found their help invaluable. It was also very useful to attend a local business club which had a wide range of information about all business aspects at their fingertips. Some great free advice was obtained just simply by talking to people such as local business owners and bank managers.
Talk us through the process of writing your business plan. I researched the process of writing a business plan by using the internet and reading books. I started writing it towards the end of my HNC as the course itself seemed to be geared towards doing this. The plan itself didn't take too long to write, but I kept fine-tuning it and in the end the process took about three months as I revised it over 100 times. When I was happy with the final product, I arranged a meeting with Business Link who gave me the seal of approval saying it was a model business plan. I felt so proud at his comment.
How useful has your business plan been and do you think you'll stick to it as your business begins to grow? The plan has been extremely helpful in raising funds initial funds and to refer back to. However due to market conditions and competition from other property developers, we have already deviated from it. We took the decision very early on to purchase the higher priced property where competition isn't as steep. This however, has proved financially to be a very good move for us.
How much did it cost to start the business?Initially, very little as there were no real overheads. Obviously, as soon as the first property was purchased, this changed. Without disclosing actual purchase figures, it was around the £100,000 mark.
How did you fund this? To show commitment, each director initially injected £15,000 of their own savings into the business. After a huge amount of legwork and effort between the three of us discussing the opportunity with various financial institutions, investors, bank managers and mortgage lenders, we managed to secure lending facilities of over £1 million.
How are you funding your running costs until the business takes off?As I said before, initially overheads were very low and therefore, running costs were easily covered by the capital injected by the directors. So that we can expand we're building up a substantial reserve fund by aggressively buying, renovating and selling as much property as we can, for a profit of course. We're able to do this as the running costs are absorbed into each project and payback happens once the property is sold.
When did you stop working? I wanted to be 100 per cent committed to this venture and handed my notice in pretty much at the same time as I starting writing the business plan. The transition took a lot longer than I expected, and upon reflection perhaps I should have delayed handing in the notice by a couple of months. Once the business was incorporated, I can't even begin to tell you have elated I was. I felt it was massive goal that I'd accomplished, even though no money was coming in yet. Like any work, there are good days and bad but I really passionate about the business and don't regret leaving full time employment for a single minute.
Are you working from home or from premises? As most of the work is ‘on site' at different projects, and not customer facing, we didn't need an office. It was decided we should use a room in one of our homes. As most of our business is done either on site or in somebody else's office, it's relatively easy to maintain the professional approach. Whenever I do work from home, I treat it like going to the office and tend to put on the shirt and tie. I find it gets me in the right frame of mind.
How are you managing your day and what steps have you taking to ensure you're able to get everything done without working around the clock? As I'm also part way through a business degree, I have to be well organised and have good time management. Last thing at night, I'll make a list of what needs to be done the following day. I also use a page-a-day desk diary. This really helps to plan the day and ensures I don't double book or forget any meetings.
What about staff, is it just you? Luckily, at this point we don't need to employ staff as the day-to-day business is managed between the three directors and we use sub-contractors to carry out building work as and when required. Long-term, as we expand it will be necessary for us to employ staff and part of the overall plan for Always Home Ltd is to establish an estate agency.
Is the amount of red tape that comes with taking on an employee something that concerns you? Taking business courses has educated me as to what is required, and also the pitfalls. At the time of writing the business plan, I knew that we'd need to take on staff at some point so I've already wrote a staff hand book which will cut down on some of the administrative work required.
What marketing and advertising have you done so far?In order to get our name out amongst the property circles, we undertook a direct mail marketing campaign. We targeted specific people who actively invested in property, and it has been highly successful. In addition once we'd start purchasing from the auctions, we quickly became know as active buyers, simply being in the auction room seems to generate interest from those in the know, and they regularly come up to us and ask our opinion or advice about different issues.
Where do you hope to be in 12 months' time? Another rung (or two) up the ladder. Ideally, I'd like to move into the redevelopment of commercial premises. We discussed the idea between ourselves internally, and although we could afford to do this now, we'd rather concentrate on core business activities until the market stabilises.
What are the main obstacles to growth? Finance is a major obstacle because until there are sufficient funds in the coffers, you really can't do much except be patient until there is. At the start, it was difficult to find lenders with a reasonable interest rate or investors, and quite rightly so, as for all they knew, we could have been ‘fly-by-night cowboys', so I can perfectly understand the cautious approach taken. Now that a track record has been established however, we're certainly finding it easier to obtain finance.
Tell us about your website. With today's technology, all businesses need to have a web presence; it gives out a more professional image. It seems the most people these days have access themselves, or can gain access through friends or an internet café. Functionally the site, www.alwayshomeltd.co.uk, serves its purpose well as the information contained within the site saves us both time and money by not having to send out as much unnecessary investment literature in the post.
What are your main ambitions, to make a lot of money or enjoy what you do?Obviously to attain and maintain a certain lifestyle is an ambition, however, it's also an ambition to not only financially secure, but in a position where I could help people, particularly the homeless.
What skills and personal characteristics do you need to start your own business? I think anyone who wants to start a business should have business skills. Those who don't should seriously think about investing in themselves first and undertake some sort of business qualification. To start a business, I would say a person needs to be courageous, passionate intelligent but most of all tenacious.
So what advice would you give to anyone thinking of starting a business? DO IT! Read positive thinking books, attend business seminars, speak to other business owners, research your idea(s). Simply starting to pursue the idea (or dream) has a magical effect and people all around you begin to help.
Thanks a lot and the very best of luck. Will you come back and tell us how you're getting on in six months' time? It's been my pleasure and I'd be delighted to come back.
And finally did you use Startups.co.uk when starting your business? Without the help of Startups.co.uk , advice from magazines and property related websites, Always Home Ltd may not have been formed. The internet is a very useful tool.