| Holroyd Howe Being a successful entrepreneur is often viewed as an essentially solo experience, with the hard decisions, particularly in the formative days of a business, agonised over by the man or woman at the top. The idea of forming a partnership is often dismissed by budding business owners, sometimes for little more than ego-based reasons. Even those that take the plunge with a co-founder can find that ideas and personalities clash to the point of breakdown. Holroyd Howe is a business that could be used as a living and breathing example of how partnerships can, and do, work. Founders Rick Holroyd and Nick Howe’s eponymous firm is well on its way to becoming the premier independent contract caterer in the Successfully capturing a clutch of blue-chip clients, such as Interbrew, Volvo and Honda, Holroyd Howe has seen turnover nearly treble in the past three years to nearly £30 million. Gross profit stood at £2.13 million in 2004, with 91 contracts currently secured. Since its creation in 1997, the business’ workforce has swelled to 820 people in production sites across the However, there is much more to this business’ success that just its impressive balance sheet. Holroyd freely admits that he probably could not do it without Howe, underlining the joint effort that has gone into building the venture. “I don’t think that either of us would’ve wanted to embark upon this (setting up the business) alone, that’s probably been one of the strengths of the business,” Holroyd explains. “It was always my intention to start with someone else because I probably wasn’t the full ticket in terms of running all aspects of the business. It was important to have someone who complemented me in terms of skills.” Holroyd rejects the idea that compromise has played a vital role in their relationship, insisting that the duo arrive at the best approach after discussion, rather than fudging the issue. “It’s amazing how the vision has been almost identical,” he says. “But the way we see things are at the opposite ends of the spectrum – we’re very different characters. “It’s very important to put your individual views to one side. Every decision we’ve made has been for the good of the business, and not for ourselves individually. “We’ve seen start-ups that have lasted six months or a year and I think it’s because egos get in the way – you can’t afford to let that happen.” Holroyd and Howe met in 1986 while working for another catering firm called Sutcliffe. Holroyd recalls that he was desperate to start up his own business, and found a kindred spirit in his colleague. “I recall sitting in a pub at the end of a day talking about careers and I said to Nick that I’d probably start up myself one day,” he says. “When I said that, Nick turned, fixed his eyes on me and said ‘Blimey, if you do that, don’t forget me will you?’ “I thought I could do better than what was out there. I think any caterer worth their salt always wants to run their own restaurant, because they have a vision of how things should be.” Holroyd then took two strategic career moves clearly designed to help him achieve his entrepreneurial ambitions. He firstly moved to Baxter and Platts, another catering company, to gain experience in sales, before switching to Nelson Hind to understand how a small firm is operated and structured. Finally, in 1997, he saw the opportunity to go it alone. He asked Howe to come on board at, he claims, an ideal time to start a catering firm. “There was a good opportunity in the market,” he explains. “There had been some acquisitions that had taken some good independent people out of the market, so there were hardly any quality independent players left that that time. “We were fortunate with our timing.” Although the pair knew enough about the market in which they were operating to bypass much of the research usually required when starting up, they still put together a meticulously prepared business plan. “I remember in our first month of trading we’d budgeted to lose £7,000 and we actually lost £5,000, so we were delighted, giving each other high fives and everything!” Holroyd recalls. “It was crazy time, looking back, but such is the beauty of the business plan.” Holroyd Howe had a three-year business plan, with a further two years bolted on, although considering the success of the firm, it’s unsurprising that Holroyd reveals they have “pretty much blown apart” their original projections. The duo were put off from borrowing from the banks to fund the business, feeling that all of the risk was placed upon them. So they approached a third party investor, who stumped up the £80,000 needed to get the business up and running. Unusually, the founders decided that they would pay themselves a salary from day one, an outlay that proved the business’ largest initial expense. “At the time we had young families and mortgages,” Holroyd explains. “It was agreed we would pay ourselves – not as much as we’d been earning, but an amount that would get us through the first year.” The entrepreneurs rented an attic office above an estate agents, which they embellished with computers and phones. Holroyd recalls that they painted the interior of the premises, put a carpet down and “begged, borrowed and stole” desks and filing cabinets. “It was quite romantic in a way, as you’d imagine with any start-up,” he says. “One dilemma we had was that we had to buy a binding machine for proposals – one cost £150 and one cost £350. We had a big debate as to which one to buy, as you worry about spending money on anything in those early days. “We got the more expensive one because we thought it would last and do a better quality job. Those are the kinds of things you have to go through as a new business.” To aid an air of professionalism to their work, the duo insisted on wearing suits to the office, right from the start. This approach, allied to their experience and skills, reaped almost immediate results. The business had a healthy supply of contracted clients just six months after formation, allowing the founders to put in place all the processes needed to grow the company. Holroyd Howe was five months old before it employed its first member of staff, to help with accounts. A further month passed before the next employee came on board, to assist operations. The business was helped by the goodwill of those already established. “One thing that amazed me when we started was the whole community of people out there in business who were 100% behind us and supportive,” Holroyd comments. “The relationship now is ‘You’re a business, we’re a business, we like what you do, let’s get on’, but in those days it was warmer, people went out of their way to help us, which was special.” However, although Holroyd feels that starting up a business is seen as a “very positive thing to do”, he admits that red tape and regulation, especially involved with employment, can be a “nightmare”. “It’s crazy – think the rights of people to manage for the benefit of their staff and their business are diminishing,” he says. “I can understand that the rules are there to protect against the unscrupulous employer, but what it actually does is lower the bar and stops good employers being really good.” The duo began pulling in contracts through their contacts in the industry, alongside some telemarketing. Holroyd feels that the initial small size of the business held advantages when attracting clients. “There was a market that specifically wanted to speak to us because we were a start-up,” he explains. “People were very keen because we were new, the reason being that they wanted to be a big fish in a small pond. One of their main buying motives was that they would be our main focus of attention.” The business’ position has drastically changed since those early days. Holroyd Howe, which mainly covers “We are on more of a level playing field now – previously, we had an angle because we were smaller and more desirable to prospective buyers,” Holroyd says. “Now we’re judged on wider, more tangible things.” The growth of the company has outstripped even the high expectations of the founders, who admit to be impatient for success in the fledgling days of the business. Holroyd puts the rapid progress of the firm down to “culture and people.” “We are a £30 million a year turnover company, but out vales are the same as they were eight years ago when we had no turnover,” he states. “That is crucially important – we may have changed the way we communicate those values, but the ethos itself hasn’t changed a jot.” Holroyd Howe has steadily built a solid reputation with the minimum of fanfare. The decision was taken early on to not “shout from the rooftops” about the business – mainly because they would have little to shout about. “More latterly, we’ve the PR up a bit as we’ve had to compete with others on a more equal basis,” Holroyd explains. “Our reputation is one of substance, integrity and delivering promises – that’s come on the basis of evolving a reputation rather than just putting spin out there.” So what would Holroyd’s advice be to someone wanting to following in his footsteps? “Plan it well and go for it – you have to believe in it,” he advises. “If you thrive on freedom and doing things your own way, you really should go for it. “The freedom is wonderful, it’s unbeatable – you can’t imagine going back.” Source: www.startups.co.uk |
Questions
1. What ‘hard decisions’ are likely to be made by an entrepreneur in the formative days of a business?
2. Examine the advantages and disadvantages of forming a partnership.
3. What is ‘gross profit’ – is it the same as ‘net profit’?
4. “Holroyd recalls that he was desperate to start up his own business”. What are the advantages in being self-employed compared to being ‘employed’?
5. “Although the pair knew enough about the market in which they were operating to bypass much of the research usually required when starting up…” Examine what this ‘research’ is likely to have been?
6. What is a business plan and why is it so important?
7. “…red tape and regulation, especially involved with employment,…” Explain what these regulations are likely to be.
8. Explain how the ‘culture and people’ can directly affect a business’s success.
9. There is also a downside to starting your own business- you may go bankrupt. What steps can be taken to minimise the effect on you of the business closing?
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