IN this week's SME Focus we hear from a family-owned business that has reaped the rewards of a diversification strategy that has taken it into a remarkable range of activities.
Name: Johann Kenmuir.
What is your business called? Portland Janitorial Products.
Where is it based? Ayr, South Ayrshire.
What does it produce; what services does it offer?
We began as a janitorial wholesale supplier but diversified into sales of barware, crockery, cutlery and food packaging, catering products and equipment. Responding to the demand from public sectors organisations, we have developed a range of services such as specialist industrial cleaning work like graffiti removal and house clearances.
We provide the local authority with a 24-hour-a-day, 365-days-a-year call out service cleaning up after accidents and incidents.
We are also called out to dismantle any bonfires which the police or fire brigade have deemed to be in an unsafe area, for instance, too close to any buildings, garden fences and so on. This has proved to sometimes be a little unnerving as residents may not take too kindly to their hard work being dismantled.
Other contracts won in the past include cleaning of bus shelters and parking ticket machines. (The bird mess doesn't just wash off in the rain.) We have even retrieved a few dead swans which had been reported by members of the public. It all makes for a pretty interesting day at work.
Our latest service is PAT (portable appliance testing) – testing for electrical equipment at commercial premises, schools and public departments.
Whom does it sell to?
Everyone from private individuals to nursing/care homes, hotels, bars, restaurant, leisure facilities, colleges, engineering workshops, contract cleaners, window cleaners, local authorities, offices and factories.
What is its turnover? £900,000.
How many employees? Seven.
When was it formed? 1981.
Why did you take the plunge?
After living in Denmark for five years, my parents Neil and Grace decided to return to Scotland in 1972. My dad was taken on as a freelance sales agent by a chemical manufacturer. After winning many awards for sales, he realised he could do just as well for himself and decided to go into business. He started Portland Industrial Supplies as a janitorial wholesaler supplying cleaning and janitorial products to businesses throughout Scotland, selling from home initially before moving into a warehouse.
Having expanded over the years, in 2007 we bought a 10,000 sq ft warehouse outright without any financing. My mother, Grace, is the company secretary/ director and manages all the administration and financial aspects.
What were you doing before you took the plunge?
In 1988, when I left school at 16 years old, I worked as an assistant to civil engineers for the construction company, Shanks & McEwan. I worked for them for a year-and-a-half until the end of the project and was then offered a job by my father. This was a natural progression for me and very much in step with my father's hopes of making this truly a family business with his children very much involved.
I started out at the bottom rung learning the business and slowly progressed through the company to my current position as sales director. I run the day-to-day management of the business and procure and liaise with new customers with my father overseeing the whole business.
My father originally worked for BMK Carpets in Kilmarnock as a specialised machine operator. He was then offered a job by a Danish carpet manufacturer who had visited the factory in Kilmarnock. He moved with my mother to Jutland in 1967 working in the same capacity. When he returned to Scotland, he started working as a freelance salesman and also did shelving designs for shop fittings.
How did you raise the start-up funding?
My father used his own savings to fund the business and did not give himself a salary until the company became profitable enough to do so.
What was your biggest break?
We were located close to local authority offices and stores and took advantage of this and forged good relationships there.
What was your worst moment?
A year or so ago we lost a large local authority contract after it decided to use a supplier who could supply throughout the UK. After the initial shock and worry about the results of this to the business, we realised this was not such a bad thing after all. We received a large volume of work from this contract but the profit margins were low.
This volume of business meant we did not have time to pursue more lucrative new business. Since losing this contract turnover is down but profitability has increased as we have now pursued and won new contracts from existing and new customers at healthier profit margins.
What do you most enjoy about running the business?
Knowing that we have developed this company to where it is now and still maintained it as a family business. We recently employed the third generation of Kenmuirs, carrying on the family tradition. It is heartening to realise that we are providing financial security for each other and not having to rely on an employer and possible threat of redundancy.
As long as we all work hard and are successful then we will all be well provided for. In all the years we have been trading we have only had one year when the turnover did not increase but we managed to turn that around the next year.
Knowing that I am running a business that pays my parents' salaries as well as my brother, son and two other employees is great motivation for us to drive the business forward and continue this heritage.
What do you least enjoy?
Working weekends if we have industrial cleaning jobs on. This encroaches on family time but I realise these are sacrifices one has to make to run a successful business. Chasing customer payments is another element of the job I don't enjoy.
What are your top priorities?
To develop our e-commerce website and add more ranges; to raise the profile of the company; to complete focused and continuous marketing to develop further sales with existing customers and add new customers; to employ staff to ease my parents into retirement; to train up my son, Harry Kenmuir, who has recently joined as an apprentice, on all aspects of the business.
What could the Westminster and/or Scottish governments do to help?
Require local authorities to have at least 25% of their business supplied to them through local business.
What was the most valuable lesson that you learned?
As tempting as it may seem at the time, do not put all your eggs in one basket, no matter how good a relationship you may have with a customer, as situations change.
How do you relax?
I like to cycle on roads and cross country. I also enjoy swimming and occasional visits to the gym. I have set myself a challenge of competing in a triathlon to see if I can.