THIS week we hear from a motor trade veteran who has acquired costly experience of the challenge businesses have faced dealing with banks amid uncertain economic times.
Name: Murray Wilkinson.
What is the business called?
Where is it based?
Our headquarters are in Auchterarder and we have offices in Edinburgh, Glasgow and Aberdeen.
When was it founded?
What does it produce?
There are two aspects to the business: firstly as an independent source of fleet and private vehicles and finance. The second strand is a full audit service focusing on existing cost centres and identifying savings for organisations where we can.
To whom does it sell?
Our typical customers are SMEs, which run anything from four to 40 vehicles and who do not employ their own fleet manager.
What is its turnover?
£2.7 million, but in the next financial year we are looking to increase turnover by one-third as we expand into the light commercial vehicle sector and spend more time in Aberdeen.
How many employees? 10.
Why did you take the plunge?
There was a stage when many companies started offering employees car allowances rather than cars themselves.
A senior banker came to me saying he simply didn't have time to visit dealerships and also wanted an independent view and guidance about his best options.
With many years in the sector I spotted a gap for a different consultative service not usually associated with the car industry.
What were you doing before you took the plunge?
From a very young age I have been a car fanatic. My first job was washing cars aged 11 at a local garage and I loved being around the dealership. There was only one career for me after that. I then worked in main dealer groups from the age of 20 across Scotland and latterly was based in Ayr running a Jaguar, Volvo and Landrover dealership.
How did you raise the start-up funding?
The sector does have reputational issue with funders and I had to use my own money, about £25,000, to get started. It took five years of successful trading before I got the kind of support I had expected at the outset from banks.
Customers like to deal with people and I think selling cars is all about face to face interaction. I had to be involved in every aspect of the business in the early years, which was hugely time consuming.
The problem of raising finance is not a recent problem and I felt it was disappointing there wasn't more faith shown in me and the business given my track record and experience.
What was your biggest break?
Two things stand out. A client recommended me to a major leasing company, which gave me an account because of my track record. This meant I could offer a choice of financial packages to client companies, particularly those who wanted to design specific types of car schemes. The second break was forging a link with ICAS (Institute of Chartered Accountants of Scotland) to be a preferred supplier to its members. This gave me access to key decision-makers from across the business community. Accountants control the purse strings and we have worked well in partnership with them.
What was your worst moment?
In May 2009 a pre-agreed funding line with my bank disappeared overnight without warning and for reasons completely unrelated to my business – I was a victim of circumstances in the banking sector. This forced me to be put growth plans on hold and our expansion suffered for a couple of years. Contracts had to be given to other businesses so my clients didn't suffer and one of my sales team was made redundant.
I received short-term support from two family members, which helped in the negotiation battle with the bank. After five months of arm-twisting my overdraft facility, which is crucial to a company like mine as we pursue new business, was renewed at half its original level. The irony is that this is again being reviewed because of under-utilisation. It seems I'm now being penalised for running my cash flow efficiently.
I understand that the sector was struggling, but the lack of communication and consultation was a real problem. Banks are only now just beginning to get that right.
The pitch of our business has changed a lot since the economic slowdown started in 2008 and we now focus on helping companies find flexible finance and leasing packages and on saving costs associated with running a fleet of vehicles. This change in emphasis to saving rather than spending money has helped us ride out the storm and we have only now just rebuilt turnover to pre-2008 levels.
What do you enjoy most about running the business?
I'm in a privileged position of having total autonomy and flexibility to push the company in any direction I feel is appropriate. If I spot an opportunity I can go for it and an idea that comes to mind at 9am can be executed by 5pm on the same day – there are no committees or boards to go through and no management structure to slow down the decision making process.
What do you least enjoy?
Inconsistent lending decisions by the main banks make it difficult for us to plan properly. Offering advice about suitable finance packages can be extremely difficult when it feels like the goal posts are constantly changing. In my opinion there has been a worrying lack of consistency and certainty with lenders with criteria changing at frequent intervals.
What are your ambitions for the firm?
Our main ambition is to keep growing and to change the way the business community deals with its fleet management.
What are your top priorities?
Our Aberdeen office opened in July last year and we see huge potential to develop our business in this market. We will also be launching a new mileage-recording dongle which will automatically record business mileage for users. Separating private and business mileage can be a troublesome affair. We are also looking to develop further partnerships with organisations to help their employees who have opted out of car schemes.
What could the Westminster or Scottish Government do that would most help?
Both Governments should focus on helping businesses get access to finance. It is also imperative that we have faster broadband and embrace technology better than we do, if we want to compete on the international stage.
What is the most valuable lesson you learned?
Always have a Plan B, even if Plan A is a huge success.
How do you relax?
I'm just like Paul Lawrie who says his kids are spurring him on to perform better on the golf course. Unlike him though, I don't always win. I work long hours so time at home with my family is really important.