Powerchex: Alexandra Kelly
The Powerchex founder on why redundancy can sometimes be reason to break open the champagne
Redundancy is not often a cause for celebration, but for Alexandra Kelly the news couldn’t have come soon enough. Having already printed business cards, found an office and hired an employee, she was just days away from handing in her notice anyway.
So when the axe came down it certainly wasn’t a bind for Alexandra to start working full-time on her employment-screening firm Powerchex – and the redundancy money came in handy too!
Powerchex screens the histories of new recruits to the finance sector, validating everything from credit and police records to employment references.
Alexandra’s 30-strong team offers a guaranteed five-day turnaround – a promise that impressed the 2007 Startups Awards judges enough to name Powerchex the Service Business of the Year.
Proven business model
Alexandra first identified the opportunity while working in risk management in the City. She’d seen an article on a similar firm in the US that had sold for $7m within three years of starting up.
Reassured that her idea was bankable, she began to investigate the UK competition. Nobody else was focusing on the financial sector so, armed with her niche in a competitive industry, it was full steam ahead.
The savings jar was well and truly raided – £6,000 was spent before Alexandra had even left her job. However, that was small fry compared to the costs to follow.
“We spent £7,000 on our IT network from the very start. It was a major commitment but the business wouldn’t run without it.”
Once the infrastructure was in place, it was time to get some customers on the books, but Alexandra wasn’t willing to offer her services to any old client. Only financial companies were welcome at Powerchex.
“It was hard to turn down people that approached us from outside the financial sector,” she explains. “When you don’t have any clients, turning down money isn’t easy, but it paid off in the end. We’re now asked to bid for contracts as a result of how specialised we are.”
Networking vs cold calling
Alexandra already had a lot of contacts in the very industry she was pitching to. However, it was cold calling that proved most effective in getting the first Powerchex clients on board.
“Even people that were willing to meet for lunch and chat didn’t want to sign up. Yet, some of those same companies became clients through us cold calling junior members of the their team.”
Getting the right customers wasn’t the only challenge during the early months of the business. “Recruitment was hard,” admits Alexandra. “We made a lot of mistakes. At one point I had to get rid of three people in one go. It’s so difficult to look somebody in the eye and tell them they’re not right for the company.”
Despite the recruitment setbacks, both staff and financial growth has continued at a steady rate since Alexandra started the company back in 2005. On track to turnover £1m this year, she’s pleased with the progress of her ‘very profitable’ business, but is starting to get itchy for some serious outside funding.
“We’re at a stage now where we can carry on growing organically or use our proven model to grow by a big step,” she explains. “But to do that we’ll need investment.”
Alexandra may have her eye out for attractive investment offers, but it doesn’t stop her focussing on the nitty-gritty of Powerchex.
“Every now and then I’ll pull a file down and see how it’s been handled,” she says. “I think of myself as the keeper of standards.”