Cracking China is new challenge for SST chief

In the doldrums of 2009, the former naval engineer who had spotted a gap in the market for designing and manufacturing sensors took a major decision.

"We were on a four-day week, our business was 90% in the UK market and I wanted to get out of the UK as much as possible. After 12 to 18 months of really hammering the marketing – publications, direct mail, Google-sponsored links, a lot of time and effort – it paid off enormously."

Customers shot from 70 to 450, turnover from £1 million to £3.7m, and 87% of sales are now international. In the next few weeks, Mr Wight hopes to tie up a major deal in China. "We had to keep the faith and spend a lot of money every month," he recalls. "We were getting a lot inquiries, a lot of interest, but customers were only buying small volumes... they were trialling them."

As the Entrepreneurial Exchange judges put it: "The most successful entrepreneurs know their market, identify a customer need that is not being met, and then fulfil it – Keith has done exactly that."

The North Berwick boy was an engineer from joining the Navy at 16, he went to university at 23, then took a Masters in quality systems development in his stride. After working for two US companies including Ethicon Mr Wight joined Livingston-based safety syringe developer NMT, one of Scotland's great white technology hopes, as operations manager. He recalls: "We had the capacity to produce 150 million syringes a year, and in a year we were producing 40,000 to 50,000 – everything was hingeing on US legislation."

It never came through – but meanwhile, the would-be entrepreneur had spotted his golden gap. "When I was at NMT I went round Scottish suppliers and they were complaining that large companies like Honeywell were changing their strategy... (they moved) to high volume, low variability product lines coming out of low-cost countries, and stopped the customisation service for SMEs. That created an opportunity."

The Falkirk-based manufacturers of mobile street-sweepers, for instance, rely on sensors in their control units for measuring brush speed and tank levels.

"In the past they would plug the sensor in and connect it up, now they were told they had to go out and purchase a sensor themselves. It was very easy business, we would offer to buy the sensor, value-add it, and supply it just in time. I did a lot of research, and many people said as soon as you have got the company established, call us."

Mr Wight quit NMT and spent six months at home. "I wanted to ensure that right from day one it had a very professional website and was fully compliant with ISO9000 before I had even made a sale. We were dealing with large companies and SMEs and we needed at first glance to look like a larger organisation."

After launching in May 2002, it took until the following January to procure the first batch of product, and a private backer helped cover the founder's wages over a tense few months. "Cashflow was supposed to start in August - but when we did get the product we had a very robust supply chain. Within two to three days we had £120,000 of purchase orders coming through the fax machine."

Despite no trading history, SST attracted grants and loans of £70,000 and support from its bank. "Managing to do it without personal guarantees would probably be unheard of now," Mr Wight observes.

After three years, turnover had climbed to £1m. "It was a good cash business, but the company wasn't worth anything other than a good customer base," the founder says. "We were buying third-party products, we had no designs, no IP. I wrote a business plan and presented it to 30 to 50 individuals."

Mr Wight had his eye on an oxygen sensor product which the owners seemed unable to exploit. "It was a flue gas sensor, and they were adamant that it wasn't suitable for other applications."

The pitch in 2006 brought in £500,000 from investors including UK Steel Enterprise, the Scottish Co-investment Fund and a group of private Edinburgh individuals. SST upped its game, employing three research engineers, licensing an optical sensor, and buying the oxygen sensor said to only work in gas flues and selling 4000 units a year.

The engineers have adapted it to a range of other uses and sales have so far hit 40,000.

Mr Wight notes: "Every Boeing and Airbus will have one of our oxygen sensors in its mid-fuselage fuelling tank... for plant-growing in the Netherlands, a low-oxygen environment is needed to propagate growth."

The founder reinvented his sales operation by scrapping it, handing all customer relationships across to his sharp-end engineers ("you just have to watch out not to call an engineer a salesperson because that freaks them out").

Unusually for an SME, the company keeps its customers happy by guaranteeing on-site service anywhere in the world. It has kept its backers happy too. "By the end of this year they will have got their original investment back in dividends," Mr Wight says.

In 2010, SST got a foothold in the Chinese market. "The products are just what they need. The Chinese market is changing very rapidly – there are great opportunities for Western companies at the moment.

"Some of their professional equipment won't be bought by the West unless critical components are produced by the West, and generally if you have a sensor in a product it will determine whether the product is a success or a failure."

The entrepreneur is no risk-taker with his financial model: he keeps four months overhead in the bank, funds all growth from earnings, aims for 50% gross and 20% net margins – and pays suppliers within 30 days.

No wonder Keith Wight has moved with his wife and two children (nine and seven) up to Perthshire, where a spot of fly fishing gives him the chance to slow down now and again on his fast track to growth.