IN this week's SME Focus two technology entrepreneurs who have succeeded amid challenging conditions say the Government has to help reduce the risks involved in employing graduates if small and medium sized enterprises are to create the kind of high-skilled jobs that Scotland needs.

Name: Susan Chadwick and Brian Ferrie

Age: 50 and 36

What is your business called? Edge Testing Solutions

Where is it based? Eurocentral in Lanarkshire.

What services does it offer? We test software. We don’t write the software or support it – we are paid to find bugs in software hopefully before it is put live and found by the users. There are four parts to the business. We help customers with how they test. We train customers how to test more effectively. We test software on behalf of customers. We provide supporting tools and technology to test software and we are partners with the leading vendor in this space, HP.

To whom does it sell?

We have quite a mix of clients, from Blue Chip to niche software development companies, and across the private and public sectors. The list includes Heineken, Ignis Asset Management and Historic Scotland in the UK. Some of our clients outsource their development and then employ us to do testing. We’re also involved in some partnerships with developers – we’ll test the software before it ever goes to their clients, to iron out any problems.

What is its turnover?

Last year was £1.2 million – and we’re aiming for £2.5m this year.

How many employees?

Twelve, plus around 10 consultants.

When was it formed?

September 2007 – just as the credit crunch hit. Great timing!

Why did you take the plunge?

We had worked together for seven years. We were both in senior roles and our jobs were changing to be broader management roles – and for both of us, our passion is in testing, that’s what we wanted to do. So we just thought: we can do this, and we know how we’ll do it. It was the fresh challenge, really, and the chance to make our own decisions. It’s all about following your own vision, making your own choices.

What were you doing before you took the plunge? Working in testing for Newell & Budge, a large IT services company.

How did you raise the start-up-funding? A mixture of self-funding, plus a loan from what was called the Small Firms Loan Guarantee Scheme (now the Enterprise Finance Guarantee Scheme), a loan scheme that was underwritten by the government at the time.

That was a real boon – we were one of the last companies to get it. It was a good scheme: you had to prove you were winning business as you went along, they didn’t just give you the money, but they also didn’t demand personal guarantees on directors. Neither of us was happy to give a personal guarantee and put our families’ futures at risk – we were happy to put our savings in, but to risk losing everything is a big step. It’s not that we wouldn’t have gone into business without it, but we’d have had to keep working and saving for longer before we took that step.

What was your biggest break? About a year and a half in, when we got a big tranche of work signed up – we’d been pitching for it and it came in just in time. We had to walk round to the bank with the purchase orders, just in time to secure our last funding payment through the loan scheme.

We won that business based on our reputation as individuals – Edge Testing was still relatively new then, and just a name, so it was our personal reputations that helped us win it. That’s the moment when you feel, yes, this really can work.

What was your worst moment? The week before that! We really needed to win that business. Northern Rock collapsed shortly after we launched and all the banks had started to have problems.

Things looked bad everywhere and all the scare-mongering in the press had a direct impact on IT spending budgets across the board and inevitably affected us too.

On the plus side, though, it was easier for us than for established businesses that already had large staff numbers and premises to pay for – we just kept things small and manageable, and we still do today.

What do you most enjoy about running the business?

The challenge, the autonomy to make decisions, employing people, winning new work and also the learning experience of everything from setting up the company to having to deal with accounts – that might sound quite boring, but it’s not. Every day is a school day, it’s one big learning experience.

One year, at the staff Christmas party, we sat looking round at them and just thought, ‘my goodness… we created this!’ There’s stress, too, you’re responsible for all these livelihoods and careers, but it is a good feeling.

What do you least enjoy?

All the paper work and admin you have to do as an SME. It is very time consuming and we would rather focus our attention elsewhere, on something more creative.

What’s your ambition for the business? #

To be the recognised, go-to testing company – and to keep growing, year-on-year. We also want to be known as a good place to work.

What are your top priorities? Our families; growing the business; providing excellent service to clients; developing new products and services and looking after our staff.

What could the Westminster or Scottish governments do that would most help?

Incentivise small businesses to employ people. Some sort of reduction or change to employers’ National Insurance contributions or tax incentives would help. And we need some way to help companies employ graduates. We’re passionate about giving graduates an opportunity and yet there isn’t anything we have come across that’s being done to encourage businesses to take them on.

The difficulty for companies like ourselves is that clients buy our services because we have experience. And graduates don’t have that experience – so they’re a kind of no-go for us. But if there was a period of time where the graduate’s salary was funded, and we were able to provide a mixture of classroom and on the job training to give them some initial experience for three or six months … you would reduce the number of graduates claiming benefit, and we could train them and then give them a job.

There’s a lot of talk from Government about helping, about how SMEs are going to pull the country out of recession, but it’s very hard to actually get grants or loans to get started or to grow.

What was the most valuable lesson you’ve learned?

To ensure that your underlying cost base is kept as low as possible, so that in lean times you don’t have massive overheads to cope with. That’s helped us survive despite the recession.

Also learning to use what we call the “disaster scale” when things go wrong. How much does this really matter, on a scale of one to 10? Will we still care about this in a year? In two weeks, even? You learn to recognise that people are generally doing their best and that problems are an inevitable part of running a business.

How do you relax?

Susan: spending time with my son. Reading books – I love reading Stephen King. I can’t watch the films, they terrify me, but I love the books. And I’ve just signed up with a personal trainer, though I’m not sure how relaxing that’s going to be…

Brian: Likewise, spending time with my wife and four kids, enjoying the outdoors with them. We recently moved to the country and that’s made a huge difference. I coach a kids’ football team – that keeps me busy.