IN this week's SME Focus we hear from a drinks trade veteran who spotted an opportunity to develop a niche spirits business in Scotland.

Name: Alex Nicol

Age: 59

What is your business called? Spencerfield Spirit Company and Edinburgh Gin Ltd. We were the Scotland Food and Drink Small Business of the Year winner in 2014.

What does it produce? Original and flavoured Edinburgh Gins, Sheep Dip Malt Whisky, The Feathery Malt Whisky and Pig's Nose Blended Whisky.

Where is it based? A farmhouse in Fife is our main office and Edinburgh has our new gin distillery and visitor centre in Rutland Place. We blend and vat our whiskies at Broxburn. We started producing Edinburgh Gin in June 2010 at Broxburn but are now distilling all of our requirements in Edinburgh.

Who does it sell to? Our customer base in Scotland includes Waitrose, Sainsbury's and Tesco supermarkets. Importantly we have very good distribution and sales in Edinburgh, Aberdeen and Glasgow, even for Edinburgh Gin! We sell in other parts of the UK and export markets (we were awarded Exporter of the Year at the 2011 Scotland Food and Drink Awards).

What is its turnover? Circa £1.7 million.

How many employees? Seven full time (mainly family) and an additional five part time.

When was it formed? July 25 2005.

Why did you take the plunge? It seemed like a good idea at the time and it still seems like a good idea most of the time. We spotted a gap in the market for a small batch Scottish gin and decided to go for it. The problem was finding the best site and then the best still manufacturer. We spent two years and disappeared up a few blind alleyways in Edinburgh looking for the right central site. When we arrived at our chosen location, we had already secured a partnership with Heriot-Watt University school of brewing and distilling and had briefed Carl, the still manufacturers, on what type of stills we wanted.

Having waited about two years to set up and start distilling, unfortunately some competition had already started in a small way, not only in the capital but all over Scotland and the UK. I'm happy we have what we think is a great site and the best possible distilling staff, plus a five-star visitor centre. We have a great set up to move forward with, all at the west end of Princess Street.

What were you doing before you took the plunge? I was the marketing and sales manager for Beefeater and Plymouth Gins before returning to Scotland from London in 1990 to be marketing director at Glenmorangie. I then worked for Scottish & Newcastle, ending up as chief operating officer of Whyte and MacKay.

How did you raise the start-up funding? Through personal savings and a bank loan.

What was your biggest break? Buying Sheep Dip and Pig's Nose from Whyte and MacKay in July 2005 and realising Mrs Nicol would work for nothing.

What was your worst moment? I try and blank these out, as they can get in the way of moving forward.

What do you most enjoy about running the business? Working with my family, particularly realising what a great work ethic our children have.

What do you least enjoy? In the early days we drove a horsebox all over the country, delivering product and selling at events.

The worst part of that was packing up after an event and sometimes driving through the night to get home so that we could reload and start again. More recently, the emergency hand-labelling of bottles. We had to re-label a 500 case order for Australia due to a change of importer, which has to appear on the back label.

What is your biggest bugbear? The cost of banking services to small companies. The large arrangement fees for setting up a loan right down to charging you for counting money you are depositing with them. Banks and the government talk a great game about how much they help and encourage small business in the UK.

What are your ambitions for the firm? To produce the best quality spirit we can for Edinburgh Gin and working with the Heriot-Watt school of brewing and distilling, with whom we have a Knowledge Transfer Partnership, over the next 30 months to really explore the opportunities for the whole Scottish craft gin category. Specifically in the shorter term, we would like to get more visitors to our new distillery and get them interested and involved in the gin making process.

Tourists visiting are important in this development process as they create demand for our brands in their own domestic market through discovering our brands in our home market.

What are your top priorities? Growth through higher sales; better distribution in the UK and export markets; brand innovation; developing relevant management systems internally; taking more time off.

What could the Westminster and/or Scottish governments do that would help? To really get behind exporters with smaller companies. Having said that, I have to say that the Scottish Government has been outstanding in terms of practical help as have Scottish Development International.

What was the most valuable lesson that you learned? Stop trying to do everything yourself, try to stand back from the business occasionally and really trust the people you work with.

How do you relax? National Hunt racing, fly fishing and walking (home from work).