Young Guns revisited: Catching up with alumni of 2003-04
In 2003 and 2004, we hailed a number of entrepreneurs as names to watch. So how did they do? Since the 11 featured here have a combined turnover of around £650m, pretty well, actually
We’ve been busy catching up with our Young Guns of 2003 and 2004. The title is not an honour we give out lightly, so have our former stars lived up to our high expectations? On reconnecting, one thing soon became apparent: all have continued to flourish.
Those that left their previous ventures did so only to set up another. Two joked about world domination and between them, the 11 entrepreneurs featured turn over almost £650m. And that’s without the two who did not declare or the one who had just left a £98m turnover firm.
Jeremy Beard, marketing partner at Haysmacintyre, sponsors of Young Guns 2007, believes there is a lot to be learned. “Entrepreneurs tend to think more laterally than accountants. They can help us think differently about the way we run our business.” And if you think some of the businesses here could be you in a couple of years why not visit www.young-guns.co.uk and enter online.
Liz Jackson (2004) Great Guns Marketing Focus: Telemarketing Founded: 1998 Turnover in 2004: £1.5m Turnover: £2.5m
Liz Jackson’s life has certainly changed. While still at the helm of her flourishing business Great Guns Marketing, she’s also found time to write a book titled Startup, become an established conference speaker and, just recently, have a baby. If there was any justice, she would be exhausted. But Jackson, who is blind, bubbles with enthusiasm. “The best thing that’s happened is we’ve started building our corporate client base, so we now work with the likes of Accenture, PWC and Lloyds Bank while being able to retain our SME market too.”
The company now has eight regional offi ces, less than the 16 planned, but expansion through franchising is going well.
Jackson admits that leaving to have her baby was initially daunting, but “if anything the team has grown into the hole I left. I’ve been able to go back working on the business rather than in it.”
Graham Bucknall (2004) Adventi Focus: IT support Founded: 2002 Turnover in 2004: £750,000 Turnover: £15m
“Well, we’re still here!” laughs Graham Bucknall. “The first rule of business is survival, so we’ve ticked that box.” But his five-year-old business, IT support provider Adventi, has done substantially more than that. Soon after Bucknall featured as a 2004 Young Gun, his company bought the signifi cantly bigger and older Scotsys, making it the largest Scottish IP firm.
At the same time, Bucknall avoided the old trap of not delegating that ensnares many founders of fast-growing companies by becoming director of strategy and bringing in a new MD. “I focus on partnerships, acquisitions and growing the value of the business as a whole.” But the huge expansion the acquisition entailed has been far from easy. “It was a very big step up, so for the next 12 months we didn’t really grow.”
Now, though, the business is looking to expand again, helped by £2m of investment from the largest business angel syndicate in Scotland, Archangel. “It’s always been about the exit and we’re still focused on that, but there’s some hard work to do first.”
Chris Fung (2004) Crussh Focus: Smoothie bars Founded: 1998 Turnover in 2004: £2.2m Turnover: £5.3m
Crussh’s founder James Laimont convinced Chris Fung to stay in the UK and run his chain of smoothie bars in 2003. A very wise move. The company has grown from nine stores to 16, three more are planned and growth has been at 60% a year without recourse to external funding, although “we’re in the middle of a funding process at the moment,” Fung reveals.
Growth has been propelled by the shift to healthy eating, Fung says. “Externally, the market is changing and things like Jamie’s School Dinners have lifted the profi le of what we do.”
This has also spawned competitors, but Fung says Crussh is the only chain to have shown staying power. He cites securing retail space, balancing growth and keeping prices competitive as the main challenges, but remains confi dent of opening more than 50 new stores in the next five years.
Martin Jones (2003) Freedom Direct Focus: Travel agency Founded: 1997 Turnover in 2003: £42m Turnover: £60m
What was once a traditional travel agency, Freedom Direct has been transformed into one of the UK’s largest online companies in the sector, says Martin Jones, whose business is now virtually all web-based. “The travel industry has changed, so this was a natural development,” he says. The company now has a call centre in Newcastle after it downsized from 12,000ft2 to 4,000ft2 of offi ce space, and has gone from 165 staff to less than 100. As a result, turnover has rocketed to £60m.
The success of the web strategy recently inspired Jones to set up another online venture, Taxi Transfers, which ferries holidaymakers to and from the airport overseas. “Taxi Transfers was set up two years ago and has really gone from strength to strength. It now has a turnover of £2m.”
Nasa Khan (2003) The Accessory People Focus: Mobile and others Founded: 1995 Turnover in 2003: £450m Turnover: £526m
There’s a lot more to Nasa Khan’s business than mobile phone accessories these days. Diversifi cation has helped the business remain strong in a saturated market. The company, with a £376m turnover in the UK and £150m from its international arm, has moved into media, acquiring four magazines for British Asians. Circulation of its fl agship and market-leading title, the Vogue-style Asian Woman, has risen from 27,000 to 90,000, achieved primarily by forging relationships with new distributors, including top airlines and hotels such as The Ritz.
But that’s by no means been the only new avenue and there have also been moves into exhibitions, multimedia, private equity funding and international property investment.
The company has not abandoned its roots, Khan says, but instead has focused its mobile offering. “We’ve cemented the markets that are more profi table and let go those which aren’t. We’ve diversifi ed into SIM cards, we’re now an offi cial service centre for Nokia and we’re looking at securing a similar deal with Samsung.” The company now employs 116 people in Chessington, has won a string of awards, does a lot of charity work and achieved UK profi ts of £1.8m last year.
However, after consolidating the business, Khan is looking towards signifi cant growth once more. An acquisition of a 185-person, £250m-turnover competitor is imminent and another will follow swiftly. Plans to launch a TV channel and a radio station are also on the cards.
Khan, who has also married and had a baby girl since he last caught up with GB, insists he is not looking to exit any time soon and is in no rush to go public. “I wouldn’t know what to do with myself, I’d get bored.”
Damian Cox (2003) EK Straas / Ocean Outdoor Focus: Giant outdoor advertising Founded: 2002/2004 Turnover in 2003: £1.6m Turnover: £5.85m
Damian Cox sold EK Straas, the giant outdoor ads specialist he set up in 2000, to US giant Clear Channel in July 2003. After staying on for a year under the terms of sale, he left in September 2004 to set up a new outdoor advertising firm, Ocean Outdoor, successfully gaining backing from serial entrepreneur John Story.
Ocean’s USP is in high-profile locations for giant outdoor ads in the UK. “We always look for the best locations and have the number one profi le portfolio in London,” says Cox, who was the first to launch a giant ad in Trafalgar Square. The future is likely to hold international expansion, an IPO or trade sale and launches in other sectors. The 13-strong business scored a turnover of £5.85m last year and an extensive expansion programme is now under way, which should see the business clear £11m this year.
Chirag Shah (2003) Trading Partners Focus: Supply chain management Founded: 2000 Turnover in 2003: £7m Turnover: Undisclosed
Trading Partners has continued to grow steadily since Chirag Shah was spotted four years ago. The e-procurement company, which helps large firms get the best deals from suppliers via e-auctions, now employs more than 100 people in offi ces in the US, China and Europe. VC investment in January 2005 helped fortify the fi rm’s position as UK market leader, accelerate growth and fulfi l ambitions for further international expansion. Around 40% of revenue now comes from outside the UK.
Cracking the US was one of the biggest challenges. “It was a very big decision. It took two or three years of signifi cant investment and it is now starting to bear fruit,” Shah says. The company broke even in the States last year. “It is the largest market in the world for our services, so it was important for us to be there.”
Mark Mills (2003) Cardpoint / Startback Focus: Cash machines / undisclosed Founded: 1999 Turnover in 2003: £25m Turnover: £98m
Mills left AIM-listed Cardpoint, the market leader in independent cash machines, at the end of last year following a disagreement with fellow shareholders. “We received an offer for Cardpoint valuing the business at £1 a share. We floated at 43p. I thought we should take it, but the other shareholders didn’t think it was high enough.” So off Mills went, but he insists he doesn’t have any regrets. “I don’t do them. When I left Cardpoint the company was breaking all records, turning over £98m and making more than £19m profi t. I felt it was a good time to come away.” Since then, Mills has been using his earnings to further his interest in property investment. The Cardpoint offices remain part of his growing portfolio.
However, in January Mills will begin a retail roll-out of a new venture (his sixth) aptly-named Startback, the focus of which remains undisclosed, but he does reveal he’s looking to create a brand. And he’ll be making a beeline back to AIM. “There’s a huge amount of money to be invested by knowledgeable investors and it’s a very welcoming environment for entrepreneurs,” he says.
Mills believes his biggest business achievement over the last few years was buying Moneybox, Cardpoint’s largest competitor, but looking back he wishes he had been a bit more socially responsible. And it’s something he intends to rectify with Startback by donating 1% of profi ts to children’s charities in the UK each year.
Tony Rafferty (2003) Printing.com Focus: Printing Founded: 2002 Turnover in 2003: £8m Turnover: £12.3m
The once-OFEX, now AIM-listed Printing. com has gone from strength to strength since we featured Tony Rafferty four years ago. The printing franchise has grown from 55 outlets to 205 and profi ts have soared from £560,000 to £2.4m. “Since being admitted to AIM, our share price has more than doubled, from 23p in 2003 to 56p this year,” he says. The company recently granted its fi rst international master licence in New Zealand, allowing a printer in that marketplace to use its proprietary software, systems and name in return for royalty payments. “We could never ship directly to New Zealand, so it’s great to see our business model copied there successfully.” The business has just increased the capacity in the Manchester hub from £20-£25m to £40-45m and will begin shipping to France in September. Rafferty is proud to deliver value and return cash to shareholders. “We now pay dividends of 2.5p which has been a major landmark.”
Tony Caldeira (2004) Caldeira Ltd Focus: Soft furnishings Founded: 1991 Turnover in 2003: £6m Turnover: £10m In 2004
Tony Caldeira was forced to look to growth overseas when the soft furnishings market declined rapidly. He lost 40% of his business as a 100-person factory shut down but somehow the north-west-based cushion manufacturer has more than doubled in size since, now selling its products to more than 20 countries. It also posted a £1m pre-tax profit for the first time. How?
In late 2004 Caldeira Ltd formed a joint-venture business in China, and in 2005 Caldeira China embarked on a $3m project to purpose build a 250,000ft2 factory complex, one of the world’s biggest cushion factories. With some of his biggest customers, the volume retailers, trying to source products directly from China (where fabric prices were up to 50% cheaper than the UK) or at least insisting that their supply chain did so, Caldeira had to take a punt.
He says: “The home textile business changed so quickly after China was allowed into the WTO in 2005 that it would have been a much bigger risk not to go. The speed at which the UK home textile supply chain was almost wiped out by globalisation was astonishing.”
The building of the factory and the opening of the Caldeira USA showroom on New York’s Fifth Avenue were featured on the critically acclaimed Channel 4 documentary Brits Get Rich in China. “I made the documentary to increase the profile of the company – and it worked. Our website had more hits on the night of – and the morning after – the film than it normally gets in six months.”
Yasmin Halai-Carter (2003) Ideal Solutions Systems / YHC Holdings Focus: Print cartridges / Green office supplies Founded: 1999/2004 Turnover in 2003: £3m Turnover: Undisclosed
Yasmin Halai-Carter has stayed true to her beliefs – even when that’s meant walking away from business. When her brother and co-founder left Ideal Solutions, she took stock. “I wanted to run a business that made a difference. Anything less is unfulfilling and pointless for me.” YHC Holdings was set up in 2004 under the name First Impressions Last Longer, and it ticks all of Halai-Carter’s boxes. “We are the only carbon-neutral, truly environmental office supplies business in Europe. Almost all of our product line is made in the UK from 100% UK Post Consumer Waste and we only work in the UK.”
She admits it was a hard sell at first. Some printer cartridge companies ship products from Mexico or China that are made using cheap labour and have an environmental impact of a ton of emissions for less than a hundred toners. That YHC could supply more than 2,000 cartridges with a low impact and enhanced performance and capital savings fell on deaf ears. “All buyers could see was unit cost,” Halai-Carter says.
But as businesses become socially aware, so YHC has grown and is now able to supply corporate companies, NGOs and commerce on a contract basis. It has also managed to reduce energy consumption to less than a quarter of what is considered best practice, has been nominated for four sustainable city awards and now offers environmental consultancy too.