Imagine the scenario.
It’s 2008 and the recession has kicked in. MFI the leading furniture retailer – and your biggest client – is a casualty of the global meltdown, creating a massive financial headache for your business.
The UK economy is in freefall. Cash is tight. Credit is impossible to achieve.
What do you do next?
Gloucester based entrepreneur Will Rees and his father Martyn did what many others didn’t do.
They decided to review, refocus and start up all over again. And so began a new journey with a new business model and a new level of success.
We hooked up with Will and asked him to share his experience of these turbulent times and how the lessons from the recession opened up a new opportunity for their family-owned business.
The Winning Formula ‘Journey’ Interview
Q1. What is the Direct Online Services proposition all about?
“Direct Online Services is the limited company behind a well-known range of kitchen furniture brands including Worktop Express®, Solid Wood Kitchen Cabinets, WEX Trade, deTerra and Joseph & Kinsley.
We manufacture and sell high quality worktops, cabinets and whole kitchens made from a variety of timbers including oak, maple and beach from sustainable sources across Europe.
We describe ourselves as a multichannel retailer and we service our customers via a portfolio of ecommerce websites, dedicated sales phone-lines and showrooms.
We operate from a 10,000 sq ft purpose built workshop and we use leading edge technology, craftsmanship and a UK distribution service to provide an unbeatable proposition for our customers.
We currently enjoy an annualised growth performance of over 25% year-on-year.
Q2. What aspects of your background have helped you on the journey?
“First of all, I suppose my DNA profile has played an important part on the journey. My entrepreneurial father had a manufacturing business for over twenty years and his ambition and drive has certainly rubbed off on me.
I always had an eye for business and when studying for my A levels, like many young people I bought and sold products on EBay. I loved the simplicity of the commercial and on-line process. Little did I know that EBay and E-commerce would form an integral part of our business strategy moving forward in the future.
Q3. What was the catalyst to beginning your current journey?
“The events surrounding the recession including the demise of MFI kick started our current journey. We always knew there was another business in us. We had supplied MFI for years and we used our contacts and expertise to buy their bankrupt stock and sell it on using the EBay shopping platform. E-commerce enabled us to showcase the products to a ready-made and home-based consumer audience looking for a bargain. We were able to ‘tap into the climate of the times’ by supplying quality products at affordable prices. The business took off.
More importantly we were able to significantly reduce our financial exposure and risk by receiving payment up front from our customers. We were ambitious though and we invested and kept reinvesting our profits in the business until we were in a position to seriously look at the ‘bigger picture’ opportunity in the marketplace.”
Q4. What did your business plan look like?
“We don’t have one now and we didn’t have one when we started out in 2008. We knew what we wanted to achieve from the outset. Our vision was to promote the beauty of solid wood through a product range supported by the best use of technology, sustainability, quality and affordability. Learning from the MFI experience, our main aim was to grow organically and operate on a day-to-day basis without any borrowings. No mean feat, but I am happy to say we managed it.”
Q5. What have been the main challenges facing you on the journey?
“Managing the growth has been our biggest challenge. Success breeds success and we have had to take some brave decisions along the way to sustain our levels of growth. Product development, innovation, quality, value and service are important factors towards our success to date. Knowing when to invest is a common challenge facing all growing businesses and we have been no different.
Growth is extremely rewarding but operational efficiency is critical to our long-term future. We use ‘best of breed’ software and we are constantly looking at ways in which we can reduce administration and other unnecessary costs.
Keeping our ever increasing employees focused and on track on our journey is a constant and enjoyable challenge.
Q6. What support and help have you received on the journey?
“We started out with six people (including two founders) and we did everything from manning the phone to packing the goods. The first three years were tough and the last four years more manageable. We now have over 100 people working with us.
Teamwork and the empowerment of our staff are important to our success.
Our profile is constantly increasing and we receive a lot of recognition locally and nationally from the awards we enter.”
Q7. What is your vision for Direct Online Services?
“Our vision is to continue the rapid growth of the company by offering other high quality products to our new and existing customer base. We measure the success of the business like many other leaders on turnover and profitability but our brand development and lead generation sources are also important to identifying our progress on the journey. At the moment we have ten ecommerce sites and we envisage more development in the online world in the future.”
Q8. How would you describe the journey?
“I would describe it as challenging, motivating, speedy, rewarding and extremely hard work. No two days are the same.”
Q9. What advice would you give to anyone thinking of embarking on their own journey?
“Opportunities can appear from even the most serious business setback by concentrating on what we do best and identifying what will work in the future.
1. Learn from the lessons from the past and from others in your market
2. Don’t rely on a single customer for the lion’s share of your revenue
3. Look after your people. Every leader says it but it’s vitally important
4. Keep your start-up costs low and use technology as part of your business strategy
5. Grow organically and self-fund your expansion if you can”
Q10. What next on the journey?
“We operate in a very fast moving environment. I hope for continued success for the business of course, increased revenue and profits, new products, new projects and the development of our brands. This year we are on target to achieve a turnover of £14.5million (30% increase on last year) and a doubling of our profits. We already operate in Europe and we see a tremendous opportunity for growth there.”
Summary
The global recession and the aftershock from it have affected every business in every marketplace in the world. The rules of business have changed for ever and many industry sectors have been transformed beyond recognition.
Will and his father Martyn used their entrepreneurial background, knowledge of their marketplace and the new trends emerging from the consumer to create a new business model.
Navigating their changing landscape required ambition, focus and nerve, resulting in a market-leading proposition and a sustainable, growing business for the founders.
Agility is the must-have skill and quality of the 21st century business and Direct Online Services demonstrate what is capable of being achieved when you possess it. Check them out on www.directonlineservices.co.uk
Best wishes on your journey, wherever it may take you.
John