Partner Article

Taking the leap from employee to employer

When Alan Roberts was told the engineering company he had worked at for 24 years faced closure, he took a drastic step. He bought the company name, re-launched it and took eight of his colleagues with him.

More than a year on, the new C & A Pumps and Engineering has exceeded its first year revenue target, expanded its client base and diversified into new industries.

Here, Alan Roberts advises on the pitfalls, opportunities and challenges of transforming from employee to employer.

After 24 years in the same business, Alan Roberts never expected to be thrust from employee to employer.

But that is what happened in the summer of 2012, when the company he joined as an electrician in 1988 announced it was selling up with the loss of 45 jobs.

Alan faced a stark choice, join the dole queue or take a gamble by acquiring the rights to the company name and re-launching in a new town.

It was a decision that appears to be paying off with Hartlepool-based C & A Pumps and Engineering on course to turnover more than £1.2million next year.

Alan explained: “The parent company decided C & A Pumps no longer fit with their business strategy so decided to sell up. It was a shock, but I knew there was a core of clients that didn’t really have anyone to go to for the specialisations we were known for.

“I registered the C & A Pumps and Engineering name but was a bit naïve because the parent company quickly got wind of the idea and wanted to know what I was up to. The C & A name would just have died if I hadn’t continued along with all the reputation that had built up, so I purchased the name and away we went as a new company.”

Hit the ground running

A year on, C & A Pumps is holding its own providing electrical and mechanical installation services for commercial and industrial companies including Cleveland Fire Brigade, UK Steel Enterprise, Hartlepool Water, the Prison Service and Sedgefield Racecourse.

It has also diversified into new areas including setting up a successful training division in partnership with Teesside University while making in-roads into new sectors, particularly within the chemical industry.

Alan explained that confidence, clarity and an enviable track record at the previous C & A Pumps ensured the ‘new’ business was able to hit the ground running.

He said: “It was very important from day one to be able to take the existing industry accreditations with us. That proved we had the skills and experience already in place. That was extremely important especially when we are establishing ourselves as a specialist in our sector.

“I was also able to negotiate deals for various assets from the original company such as engineering equipment, computers and furniture. That meant we had all the equipment, accreditations and most importantly the clients in from day one and could hit the ground running.

“So we weren’t a typical brand new business. We had contracts in place and in essence, we were just moving the business from Durham to Hartlepool. It’s an incredible achievement but we managed to bring 75% of the old clients with us.”

Pitfalls

But hitting the ground running has also had its pitfalls. Alan suddenly found himself as an employer with the livelihoods of eight staff as his responsibility.

That meant bills had to be paid, contracts completed and payments received from clients to ensure cash was flowing through the business from day one.

Alan said: “One of the bits of advice I used to hear was to not employ anyone until you have everything in place. But I took eight staff with me – a really strong workforce but I now had that responsibility that I had never experienced before. That was a real eye-opener.

“Cash-flow can be a rollercoaster ride, especially when clients don’t pay their bills on time but I always have to make sure I have enough cash to pay the staff and suppliers.”

He added: “People ask me what the biggest surprise has been and for me, it was the buy in I got from suppliers. They believed and understood in what I was doing and if I could pass on advice, it would be to get your suppliers on side and make sure they understood your drive and ambition.

“You are constantly told that suppliers will not deal with new businesses because payments need to be in place. That’s a message I kept getting, especially from the banks. But I have been able to secure decent payment terms which meant we were able to start work immediately.

“It appears that they understood my explanation of what I was trying to do and bought into it. They understand that they will benefit as the business grows and expands.”

That expansion has seen C & A Pumps not only retain the vast majority of its previous client base but also penetrate new markets. The business has also boosted its workforce to 15 with a strong emphasis on apprenticeships and training.

Alan expects that to continue with recent contracts secured with the likes of Bellway Homes and chemical firm Huntsman.

He said: “It’s important for any re-launched company to know where its key strengths are and to capitalise on them. We have diversified into new areas and it has paid dividends.

“We now have much broader skillsets and specialisations, whereas previously the business was pretty much known as a pumps company. Now it’s more a multi-skilled package such as maintenance and electrical installation. For clients such as Sedgefield Racecourse, we have been able to expand our services while some of the chemical firms are knocking at our door because we can provide a broad range of specialised skills.

“As for the future, C & A Pumps and Engineering will continue to grow. When you first approach the banks with the business plan, a lot of it is finger in the air stuff. But we’ve met and exceeded targets and that’s great.”

This was posted in Bdaily's Members' News section by Alan Roberts .