AFTER the UK Government appeared to cool on plans for an energy price cap we hear from the Scots entrepreneur leading a newcomer’s attempts to take on the big six suppliers.

Name:

Paul Richards.

Age:

34.

What is your business called?

Together Energy.

Where is it based?

Clydebank. I’m a Bankie, so wanted to set up the business in my hometown.

What what services does it offer?

We’re a domestic energy supplier. We source energy from green generation, buy it through the wholesale market, and sell it on to our customers.

To whom does it sell?

To about 6,000 households across the UK, at the moment. But, potentially anyone that needs energy supplied to their property.

What is its turnover?

We’re currently at £5.4m, but are aiming to nearly double that in the next few months. We add £1m to the turnover for every twelve hundred customers we onboard.

How many employees?

We have 40 people at the moment and our plan is to increase that to 60 by the end of the year.

When was it formed?

October 2016.

Why did you take the plunge?

My co-founder Geoff Guenther and I were working with a number of state-owned European companies, which were keen to enter the UK market. During that time we identified three segments of entrants – one focused on green, another on tech, and the last on volume. We felt we spotted a gap in the market for a supplier that focused on the basics.

What were you doing before you took the plunge?

I worked with a boutique Irish consultancy called VISION Consulting, a management consultancy which specialises in developing trust and leadership. My five years there allowed me to learn and articulate the standards I’d want from my operational team, and how we’d engage with existing and potential customers.

Prior to that, I was a consultant at Capgemini, a manager at British Gas, and originally came up through the Centrica graduate scheme. Almost all my work has been focussed on the energy and water industry.

How did you raise the start-up funding?

Predominantly through a private investor, who I can’t name. Raising funds is tough – admittedly, we were naïve at the outset. The real challenge was handling the negotiations of the cost of market entry, while still securing funding. There was a lot of brinkmanship, but, in the end, we were much better at negotiating contracts and costs with partners than we were at raising finance. We managed to reduce our entry costs to the level of funding we could raise!

What was your biggest break?

The biggest break in my career was becoming a director at VISION: it gave me exposure to senior executives in utilities and the confidence to feel I was capable of exceeding the achievements of some of the UK’s biggest household brands. That experience has been important coming into the industry as a new player - when partners know that we’re experienced, it’s easier to build good relationships.

Receiving funding from our investor will also always be a proud moment for me – he was a mentor of mine beforehand and watched us for some time. Someone who has worked closely with you trusting you with a large cheque felt great. Although, when he was handing it over he did say: “look after this, I don’t have too many of these!”

What was your worst moment?

We were recruiting and were scheduled to launch in September 2016; but, due to a number of factors out of our control, there was a delay in entering the market. We weren’t going to get our license until December and a three-month set back had the potential to cost us money that we didn’t have. Thankfully, within a fortnight, we managed to partner with another provider to white label our product, which allowed us to launch on time, minimise the cash impact and meet our sales targets. This meant we effectively sub-let a licence from a smaller provider temporarily

What do you most enjoy about running the business?

In a nutshell: our staff. I’ve been very proud of how they’ve grown. We’ve recruited a team and, over the last seven months, we’ve all become great friends.

I also enjoy the speed at which we can move. Geoff and I can have a thought and action it within the same day.

What are your ambitions for the firm?

Firstly, we want to grow to 100,000 customers by 2020 in a sustainable manner that remains true to our values. Secondly, we’re aiming to launch the most innovative green product in the market by January 2018 – it’s currently in development. Our top ambition is to have the most loyal customers of any energy company in the UK.

What are your five top priorities?

Customer service is the top priority: we want less than 20 complaints per 100,000 customers and we’re doing well on that front already. Linked to that is retention: we need to keep the customers we win. We’ve set a target of 90 per cent retention, which is 20 to 30 per cent higher than industry standards for a challenger brand.

The same goes for our staff – we want to keep them at Together Energy. We’ll also need to recruit an additional 80 staff over the next 18 months and, if we can maintain the culture we have developed while trebling the workforce, that would be a huge achievement.

Profitability is another priority – we’re aiming to be profitable by the end of 2017 or early 2018. A crucial part of that is driving sales.

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

It could be much clearer what sort of government funding is available and at what stage. We spent a lot of time and effort trying to get one of the UK Government’s start-up business loans, only to be turned down at the last moment. We invested weeks in putting an application together and then, at the final stage, they decided the business was too risky. We were given a lot of assurances and were banking on that money – it would have been better to know upfront that it wasn’t set up to help companies in complex markets and industries.

What was the most valuable lesson that you learned?

Make sure your personal values are reflected in the values of your business. Without that, authentic leadership is impossible.

How do you relax?

I hate the phrase, but my wife and I are “foodies” - we eat out too much! We also follow Glasgow Warriors and, when I can, I’ll try to turn out for Clydebank Rugby Club 2nd XV - but only if I’ve managed a training session through the week.