Monday, 28 May 2012

Carwyn and Co could do well ...

... to read how its done in the real world, there are a few hints in the report as to how businesses might be helped by politics ...
Equipped to deliver on its next-day promise for the catering trade ...

Paul McMahon, M.D. Nisbets

Alan Copps ( The Times 28 May 2012 ) (£) reports on how a cookery business has defied the economic gloom...

From a trestle table for a Jubilee street party to a bow tie for an upmarket maître d’, from a spoon to a fridge to a heavy-duty saucepan, if you’ve eaten out anywhere, in the smartest restaurant or even in a prison canteen recently, the chances are high that Nisbets supplied some of the kit behind your meal.

The name may not be familiar outside the catering trade, but this fast-growing company, operating from two giant warehouses in Avonmouth near Bristol, is rapidly becoming the Amazon of the cookery business. “We’re essentially a mail-order business sending out 5,000 parcels a day,” says Paul McMahon, the managing director. “The biggest thing that marks us out from the rest is the attitude, the culture. We’re a ‘next-day’ business.”

Of the 18,000 products in Nisbets’ catalogue in print and online, more than 15,000, ranging from disposable forks and linen napkins to industrial-size fridges, are kept in stock in Bristol ready to be dispatched within a day in response to any order received by 5pm.

“The catering trade tends to be conservative. Before we came along, it was very regional. We were really the first national, mail-order firm for caterers, and we’re now supplying a lot of wholesalers. We aim to deliver on the next-day promise. There are some very large items we can’t keep in stock and we have to get from suppliers, but we always aim to be precise about timing.”

The firm was set up in 1983 by chairman Andrew Nisbet in a corner of his father’s business, which installed kitchens. “He realised there were a lot of catering students around the country who all needed the same things: a pair of shoes, a coat, trousers, a hat and a set of knives. So he went knocking on the door of catering schools selling them — that’s why, if you look at our catalogue now, the clothes still come at the front,” says McMahon. From there, Andrew Nisbet expanded into the restaurant trade, first through family businesses and then by tendering to chains.

By the time McMahon joined the company in 1998, Nisbets was turning over £13 million a year. “My background was in mail order, and that’s the expertise it needed,” he says.

This year, turnover is expected to be around £180 million, 12 per cent up on last year. Net profits are about 15 per cent of sales revenue. Staff numbers have grown from around 90 to nearly 700, and offices have been opened in France, Germany, the Netherlands, Belgium, Spain, Ireland and Australia. Early next month, Nisbets goes live in the US with an office in Baltimore offering next-day deliveries throughout the Eastern Seaboard.

“It’s incredibly exciting. It’s a £4 million investment — £3 million for the stock and £1 million for the systems and people,” says McMahon. If the investment pays off, there are plans to extend the Nisbets service across the United States. The investment in Australia, funded by profits from the British business, has doubled in three years from $A5 million (£3.1 million) to $A10 million.

“It’s a simple business. I always remind staff: ‘We sell saucepans’. It’s the systems and the processes behind them that make us stand out. We’re very successful, but we’re constantly beating ourselves up about how we can do better — how we can make things easier for our customers. For some reason in catering, whenever anyone wants something, they want it the next day, even when it is a big item like a fridge.”

Meeting that demand is a capital-intensive business. “At any one time, we’ve got about £20 million worth of kit in stock. To do that, you have to generate cash flow, so the payment systems have to work really hard,” says McMahon.

He accepts that growth at the current rate cannot last forever. “We’ve just got to keep doing the right things. Restaurants will close or try to make their kit last longer in bad times. But people will still need to eat, so we’ll always have a business,” he says.

Templates for success

Over the past six weeks, Business Blueprint has showcased the success of some of Britain’s medium-sized companies that are bucking the recession. What has emerged is a picture of carefully financed, sustainable growth in diverse markets, much of it export-led.

This mid-sized group of firms, turning over between £10 million and £200 million a year and each employing up to 500 people, forms a crucial part of the country’s employment pattern, often representing a key element in the local economy and an essential prospect for new graduates and school-leavers.

Those we have visited in different regions of the UK operate across the spectrum of business. Some are long-established businesses that have evolved over many decades, others are more recently founded companies that have seized the moment to exploit modern technology. Many have taken up imaginative joint ventures in parts of the world where they had no previous experience.

But, says David Maxwell, board member for clients and markets at Grant Thornton, whose firm has identified our examples, they all have certain attributes in common: “These companies are looking for new business in areas where in the past British companies used to be reactive. They are identifying new markets and developing the techniques to get into those markets.

“They are also being successful at accessing appropriate funding, identifying the best providers, judging just how much funding they need for growth.”

Another common element is the way that these privately owned companies have looked at themselves. “They acknowledge that times are tough. They have stood back and looked hard at their procedures, their costs through the supply chain and their management structures. They seek to stand out in the market and encourage and retain the best talent,” Maxwell says.

The conclusion must be that, while there is no golden recipe for success, there are still plenty of ways to succeed in British business.

... with an idea and thirty years of hard work its possible !

... how does Wales grow these ideas ?

... education, education, education "

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