Channel 4 News - Made In Britain Feature

 

I was recently interviewed by Sarah Smith of Channel 4 News for their Made In Britain feature which aired last night. Severn Delta came to her attention when she was living in Washington as C4's US correspondent  and friends would send her packs of our Sarah Smith products. 

The film is above. The section on Severn Delta is about 4 minutes in.

I have long been a vocal supporter of British manufacturing. When Severn Delta launched the Sarah Smith brand in 2005 many people were amazed that we were making it ourselves here in Somerset. "Surely that is all made in China these days?" people in stiff collars and pin striped suits would say to us at tedious corporate networking events. Don't be stupid would be my reply.

We could have easily subcontracted production of Sarah Smith off shore but then our liability would have been in a stock filled supply pipeline that stretched around the planet. Instead we make here in the UK and our liability is arguably in the obligation that we have to our employees under UK law. As I say in the film, I see nothing wrong with that and personally I have a problem with the concept of firms moving work off shore to places and factories where workers don't necessarily have the kind of rights that we here in the west take for granted and that generations of our forefathers fought for. 

I support British manufacturing because buying British supports British jobs and contributes to the greater British economy.

Because we manufacture here in Somerset we buy goods and services from other local companies contributing to the local economy. For instance we needed some drainage repaired in the factory yard recently so we hired a local company to make the repair, we hire local electricians, local engineering contractors, we use British transport companies to make our deliveries, and we employ 45 people who live, shop and spend their money here in Britain.

The tickle out effect of buying a British made product instead of one made over seas is enormous. Keep that in mind this Christmas and look at the back of the pack to see where things are made and try to buy more British made goods.

We Have An ERP Suite and We Are Not Afraid To Use It!

My partner in Severn Delta, Martyn Shiner, has written a further back-story post on our ERP project on the MAX Usergroup blog here.

Essentially we wrote our own ERP suite using open source tools because we could not find a right size right cost solution elsewhere for our c. £7m turnover consumer goods manufacturing business which supplies the likes of Tesco, Sainsbury's, Morrison's, Boots & Waitrose (to name a few) with a mixture of private label and our Sarah Smith and PitRok branded goods.

Severn Delta has been fully operating on the system which we have branded uzERP since Jan 1 2009. We have posted two years full accounts from it and and 8 months into our third fiscal year. All without hitch.

At the end of 2010 we spun uzERP out into an LLP with the two guys who with Martyn had done all the heavy creative and code work taking a stake.

We have three other clients using uzERP the largest of which is a c £5m Turnover specialist motorcycle parts manufacturer. These were all brought in via our close local network. So far we have kept pretty low on the radar and have not made any effort to "go live" or start selling.

But we are coming to the crossroad and we need to decide what next. Both Martyn and I are conscious that we will need to dedicate more time to uzERP and having put a solid team in place at Severn Delta who essentially run the company on a day to day basis we are certainly in a position to do that, splitting our time between the two companies.

It is more the how and when that is on my mind. Should we look for some funding to pump it up and go loud and start to build awareness of the uzERP proposition with SME manufacturing businesses? or should we stick with the softly softly slowing building clients model?

Some may say but if it is not "in the cloud" it will never fly. That to me is nonsense. As a manufacturer I am not concerned whether it is on site, in the cloud or on Mars. Which one is right size, right solution, right cost? That is the one for me. The beauty of uzERP is that we can pretty much deliver it any way you prefer and you can control the cost. We will charge you for the time we spend putting it in for you but once you are live if you never need us again well good for you, just tell all your friends what a killer deal we gave you!

Maybe that is a crazy plan but we have confidence that we can build a decent business here. The mission is not to have stratospheric sexy trendy braggable buzzy product that a million people have played with and no one uses. We aim to build a solid, profitable specialist business that delivers the lowest cost ERP system to SME manufacturing.

Lots of questions still to answer, lots of questions still to ask. We will let you know how we get on.

The Hidden Cost Of Flying

Like many people in business I frequently use the so-called "low-cost" airlines for business travel. I am often only away for one night and therefore can travel light and control the cost by not checking in luggage.

At the weekend however when booking a flight with one of the most well known of these "low-cost" airlines I had an odd experience which I thought worth sharing.

I wanted to book flights for 3 people and so worked my way through the usual steps on the web site to pull up the date and time options etc. selected flights from the various options (having noted that only a limited number of seats were allegedly left available at the lowest prices)and got to the "summary before you buy" point. The total cost of the flights at this point was just under £200. So far so good.

At this point I jumped off to hunt for the hotel rooms. Searched around my usual preferences and found that all my top three hotels for that location were booked out for my dates. Then the phone rang and I was diverted dealing with that and by the time I had finished the call and booked the hotel rooms about an hour had passed.

Back to the flights which had timed out of course so I re enter all the info. and arrive back where I had left off at the "summary before you buy" point. Only the price is now just under the £400 mark. Just about double where it had been an hour before.

Being a paranoid animal I smelt a rat.

Noting that I was using Firefox I minimised the browser and opened Chrome. Started again. Same company, same web site, same information entered. Took about 5 minutes to get back to the "summary before you buy" page and discover that... the price was miraculously back at the just under £200 level. Out came the credit card. Job done. Money saved.

I guess the lesson is clear cache and cookies before you buy if you want the best price. Big brother is watching and will charge you for taking your time!

10 New Year Resolutions for SMEs

I have a post up on the Business Heroes blog: 10 Resolutions for SMEs for 2011. Read it here>

Enjoy!

Part Of Learning How To Make Money Is Learning Not To Spend It!

Seems obvious right? Wrong. Most people setting out in business will spend more time in the early phases spending money rather than making it.

I will admit that in the first year of Severn Delta we spent a whole bunch of money we didn't have to. That just made the first year loss even bigger than it would have been if we had exercised a little more restraint. Like most CEO's at the helm for the first time I had to learn this lesson the hard way but learn it I most certainly did!

I visited a company in the Valleys about a year ago. Or rather an ex company as it had gone under. It was beautiful. The cleanest factory I have ever seen. A gleaming state of the art laboratory. A £350k production line with a packing unit on the end that had three times the packing capacity that the line it was bolted to needed, and which cost more that the line feeding it! They had newly decorated offices with the latest Dell's in front of all the staff they had hired. They had spent and spent and spent setting up their company and had burnt all the money they had borrowed to set the company up plus the same amount again in grants from the Welsh Development Agency (or rather from you, me and the rest of the Tax paying millions!). They had been so busy spending money they had forgotten to make any. The factory was completely uncontaminated by production and they had no customers. No customers means no sales. No sales means no income so when the cash pot ran out the game was up.

Repeat after me: You are in business to make money not spend it.

Another thing I did a year ago was hire a Sales Director for the first time in our history. This enabled me to focus on other things. The man in question was astonished at the fanatical cost control and cost attrition that is an everyday staple at Severn Delta. He had worked for bigger companies and for similar sized companies and he quoted examples of whole departments in some places who were little more that spending machines contributing little to the overall drive of the business but lobbying for bigger and bigger budgets every year.

We don't have departments like that. We don't really have departments. We have two open plan offices full of people with different specialties working together towards a common goal and all constantly looking for ways to not spend money or to cut costs wherever possible. It is in the DNA of the company now, but I keep a paranoid close eye on it anyway.

I know we can spend less if we try. We just haven't worked out exactly how yet, but we are working on it.

Know What You Are

It is a common mistake in business. Having a quite different idea of what your business is, to that held by the most important people you deal with: your customers.

Borders failed because they neglected the core reason people walked through their doors: books.

Railtrack lost its way because it thought it was a property company and outsourced what should have been its core competence: managing the rail network to ensure safety and efficiency.

Eurostar has fallen on its face in public because it sees its core purpose as running trains back and forth. Its unhappy customers see it as a way of safely and quickly getting from A to B in comfort.

Over the past few days they would have settled for being put on a coach and then a ferry and conveyed not so quickly from A to B smothered with apologies and information but at least in moderate comfort.

Wouldn't have been so hard to organise were the top brass no so single mindedly obsessed with the damn tricky technical science stuff which is apparently more important that customer service and reputation!

If In Doubt, Act Like A Receiver

The recent demise of Borders UK brought back memories of February 2003 when our once parent Plc. went under and on the morning of Feb 6th a car rolled up the drive and out stepped "The Receiver".

Within a few hours many colleagues were heading in the opposite direction for the last time. The Receiver doesn't mess about.

He gets on with his job. No sentiment. No procrastination. No "well Janis has been with us a long time..." or "we need to get this low margin delivery out on time they are a long standing customer". It is black and white to The Receiver. He deals in quantum and maths.

The clue is in the name. He does not come to give but to receive.

In a time of crisis, turnaround and survival it is worth remembering his role and doing his work before he has to come and do it for you.

Every piece of resource that is not focused 100% on turning inventory and debtors into cash is resource you don't need in a crisis. Harsh but true.

OK. He has the advantage that all contracts are broken so he has more freedom of movement than you but my point is the principle. Stop giving. Stop spending. Focus on generating and receiving cash.

Everything on your premises is inventory. Anything not in current use can be sold. Even things that are in use can be sold. We sold two production lines within 9 months of acquiring what is now Severn Delta. Both had residual levels of business on them. Both unprofitable. Both we exited in a jiffy because the cash win from selling the asset was greater than the cash generation from crewing and running the lines.

Slash all discretionary spending. Stop cash flowing out. And of course get on the phone and hound every pound until it is paid on time or early.

We had one year where we pulled in several hundred thousand pounds early at our year end. Only took one person focusing on it.

This is not just a lesson for hard times. We have had a pretty good 2009 but a focus on cash is to the fore because we are investing in new manufacturing capacity and we want to be sure this does not exert unnecessary pressure on cash flow.

But if times are tough and your business is struggling my message is act like the receiver before once is appointed to do it for you.