Starting A Business Training Consultancy (Mark’s Story)

 

Written by Mark Ogden

Mark & Sue Ogden – M4 Business Training (initially Sole Trader, became Partnership), which evolved into The Learning Combination Ltd (TLC).

After some frugal and occasionally very rocky early years, this small business training consultancy  took on staff and expanded its locations along the M4 corridor to develop into one of the UK’s leading independent learning resource advisers, suppliers and developers of corporate learning centres. TLC also developed a niche in design and delivery of combined performance management and learning programmes to major employers.

Mark and Sue were able to move into ‘semi-retirement’ and do some longed-for global traveling and family visiting after they sold the company to an expanding consultancy just a few days before Mark’s 50th birthday…

The Long Road To Self Employment

M4 Business Training, set up in the spring of 1989, was my third attempt at self-employment. I was 37 and if I was ever going to make a real go of breaking -out on my own, it had better last a bit longer this time!

The First Attempt of Self Employment

Previous experience of ‘being my own boss’ was, the first time, born out of a combination of disappointment and naivety. Not that I see the latter quality as always being a weakness – a certain amount of naivety and willingness to have a go regardless of the potential pitfalls is often more of a strength in the early days.

It was the autumn of 1974, I was a law unto myself and had gainfully spent the summer working as a display advertising exec on Fleet Street for the Daily Express. Without my knowing it at the time, these were the dying days of Beaverbrook as a newspaper publisher and August had been a particularly ‘silly’ season business wise. Full page adds that would normally command five-figure sums from advertisers were being sold for around £400. The management team was becoming increasingly alcoholic under the pressure and many of us, who had joined with high expectations and despite healthy salary deals, were becoming disillusioned and not a little unhealthy in the mind, body and spirit departments.

It was a long commute from my shared flat in Hertfordshire and, as an impatient 23 year-old singleton, there were better ways of spending my time without all the hassle. The allure and opportunity of ‘self-employment’ in the then youthful and booming home improvement industry, working locally in hours almost of my own choosing, was too much to pass up.

The next 18 months encompassed the steepest learning curve of my working life, one of the greatest disappointments for my parents and grandparents who knew Beaverbrook as a wartime business and national champion, and a growing realisation that the hours were really not that good after all – they were mostly unsocial. This was not a career path that would earn me much respect from anyone, least of all myself!

There’s no doubt that the job ‘toughened me up’ as a salesperson, and showed me how it was possible to earn a very high income (from time to time), but being a local commission-only agent for a national company wasn’t building my own business, nor was it likely to go anywhere. On talking to more worldly-wise friends, it became clear that there was a need to get practical experience in business-to-business selling with an established but smaller company, so I could get to grips with a wider range of work skills. Over the next 7 years or so I put my head down, until the old independence thing began to itch again on entering my early 30s….

The Second Attempt at Self Employment

It was now the early ‘80s and I was full of self-confidence with some real front-line selling to industry under my belt, as well as recruitment experience in the computer systems and software world. I fell into conversation with a former manager of mine who was a few years older, and we both thought we knew better than most about selling and sales management, so why not set up a training business together.

We went so far as renting an office right away, as part of demonstrating commitment to each other and to the business, and began to make phone calls to prospective clients. However, although we had both negotiated reduced time with current employers who knew (mostly) what we were up to, neither of us was prepared to take the full-time plunge into self-employment. Both of us had young families and not a lot of capital behind us, and within 6 months we took the decision to wind up before engaging in any contracts.

What now?…. A lucky break, or just more delaying tactics?

Depression could easily have set in at this point, but the MD of a US software company I had been recruiting for approached me to become one of his sales managers. I had decided to pursue some elements of the training business independently, and had run a series of evening programmes on motivation and leadership within his company. He had attended some of the sessions himself and he seemed reasonably impressed at my determination to get ahead despite the setbacks.

These were still the days of high demand for ‘micro-software’ packages for desktops and this was an opportunity to manage a team selling to dealers around the country. The job went well, although I took up an approach within the year to move into a similar and more financially rewarding role with a hardware trading and leasing company nearby.

By the late 80’s the company I worked for, although small in employee numbers, had become Europe’s second largest computer broking and leasing business. We were perceived as an increasing threat to the No 1 company and they decided to go for a takeover. I stayed on for a short time, but working in a bigger organisation no longer provided the job satisfaction of being involved and closer to business decisions that had become interesting in the smaller company.

A good final couple of years, plus some additional income from a matured employee share-ownership scheme as a result of the takeover, gave me breathing space to plan and prepare for the final step to independence. I had to get it right this time – although the house mortgage was a lot lower than the 90 per cent we first borrowed, Sue and I had moved a few times with work and household outgoings were still serious, especially with two young daughters’ future to consider.

Making The Break For Good: Planning To Succeed, With Help, Advice And Mentoring.

Starting up a Business Training Consultancy

One of the many advantages of gaining some management experience over a few years in helping to run someone else’s smaller business – is that you get to learn a lot about making serious mistakes at their expense…yet building so much trust with each other that you and the business still survive!

Perhaps a couple of the biggest lessons I had already picked up were the need to put a realistic business plan together and to do so with the advice and help of people who not only been there and done it themselves, but were also prepared to listen closely to you before giving that advice.

On approaching the then equivalent to the local Business Link (government sponsored business advisory service), I discovered they ran a mentoring scheme for budding entrepreneurs – for free! Although I was impatient to get my idea for a business up and running, the advice was to take up the offer of 4 free mentoring sessions with the nominated mentor.

My mentor was a semi-retired businessman, who had experience from the ground upwards in small and very large businesses. He asked a lot of questions before giving any guidance at all. He wanted to know about my family, our plans and how we saw our lives in the future, what roles Sue and I would play at home and at work over the coming years…all of which helped to clarify my thinking and build trust in him.

Between each session over several weeks we both agreed to do some work. He gave me guidance on what should be in the business plan and then I had to attempt it on my own before the next meeting, when he would give me feedback. In the meantime, he would do some research into the corporate training market and check out some of the factors that could establish if there really was the type of gap I thought there was.

My mentor made introductions to an accountant and a local bank manager, who advised not only on setting up the business account, but also in using the bank’s business planning forms to build my case. The importance of cash flow was stressed.

Turnover is vanity; profit is sanity; cash flow is reality!

Last time I worked as employee, the company was in my experience a small one with just 17 staff in the UK operation. However, annual sales turnover was in the order of £30 million and gross profits around 8-10 per cent of that. Now I was planning a business that my mentor thought might have a turnover in the order of £50k in the first year, with gross profits about a quarter of that….Help! Was all the planning and hard graft he promised ahead really worthwhile?

It really did look painful.

“Scrub out that modest income you’ve put in for the first 3 months”, he said, or words to that effect.

“Can you and your family get by for the first 6 months with no income at all? Do you believe in your plan that much?…You might not make any sales for those first three months, invoice the first one or two at the end of the fourth month and get payment in month 5 or 6 if all goes well!”

Well it turned out that he got my feet so firmly on the ground that the eventual Year 1 turnover of just £40k and gross profits of less than half that were not the shock they might have been. Out of that would come all household and business expenses, so it was a good thing I worked from home for all of that first year.

Focus On Building Relationships

What I really needed to build in the first few months, I was advised, were some key customer / client relationships. “Focus on the relationships, and the results will come.”

A couple of sales did happen in the second quarter, only a small fraction of the income had been received by the end of the third quarter, and the majority of actual receipts were in just the final two months.

However, the build-up was there, and I had developed consistent relationships with a couple of clients who had committed to an on-going programme in Year 2. This gave me the confidence to approach the bank for a Business Development Loan (£10k granted as a lump sum, with monthly repayment spread equally over 4 years) and take on a couple of rooms in an office building a mile from home. Sue had been able to provide admin support part-time in the business from the outset and, now that both our girls were at senior school, she got more involved in the book-keeping and financial management aspects and we began to make a real go of it.

We took on our first full-time member of staff in the middle of that second year, and by the end of it I had begun to dream about real expansion and some bigger premises. The dream was for a country house in a parkland setting….something modest like that!

A few months later, I was meeting with a recently established client who was MD of an agricultural supplies company based a few miles from home. Did he have any spare office capacity, I asked.

“Well, if you don’t mind cleaning out the old library and office above our coach house, you can move in after Christmas,” he said.

The coach house stood across the courtyard from the mansion, set in 37 acres of parkland.

Over the next five years we grew the business steadily, took on eight more staff, became first a formal business Partnership and finally, to involve some of those staff in share-ownership, a limited company.

But all that is going well beyond start-up, and is possibly another story….

 

Read  Starting A Business Training Consultancy (Sue’s Story) for a different perspective on starting this business.

Tagged as: self employment, starting a business