“There was a good opportunity in the market,” he explains. “There had been some acquisitions that had taken some good independent people out of the market, so there were hardly any quality independent players left that that time.
“We were fortunate with our timing.”
Although the pair knew enough about the market in which they were operating to bypass much of the research usually required when starting up, they still put together a meticulously prepared business plan.
“I remember in our first month of trading we’d budgeted to lose £7,000 and we actually lost £5,000, so we were delighted, giving each other high fives and everything!” Holroyd recalls. “It was crazy time, looking back, but such is the beauty of the business plan.”
Holroyd Howe had a three-year business plan, with a further two years bolted on, although considering the success of the firm, it’s unsurprising that Holroyd reveals they have “pretty much blown apart” their original projections.
The duo were put off from borrowing from the banks to fund the business, feeling that all of the risk was placed upon them.
So they approached a third party investor, who stumped up the £80,000 needed to get the business up and running. Unusually, the founders decided that they would pay themselves a salary from day one, an outlay that proved the business’ largest initial expense.
“At the time we had young families and mortgages,” Holroyd explains. “It was agreed we would pay ourselves – not as much as we’d been earning, but an amount that would get us through the first year.”
The entrepreneurs rented an attic office above an estate agents, which they embellished with computers and phones. Holroyd recalls that they painted the interior of the premises, put a carpet down and “begged, borrowed and stole” desks and filing cabinets.
“It was quite romantic in a way, as you’d imagine with any startup,” he says. “One dilemma we had was that we had to buy a binding machine for proposals – one cost £150 and one cost £350. We had a big debate as to which one to buy, as you worry about spending money on anything in those early days.
“We got the more expensive one because we thought it would last and do a better quality job. Those are the kinds of things you have to go through as a new business.”
To aid an air of professionalism to their work, the duo insisted on wearing suits to the office, right from the start. This approach, allied to their experience and skills, reaped almost immediate results. The business had a healthy supply of contracted clients just six months after formation, allowing the founders to put in place all the processes needed to grow the company.
Holroyd Howe was five months old before it employed its first member of staff, to help with accounts. A further month passed before the next employee came on board, to assist operations. The business was helped by the goodwill of those already established.
“One thing that amazed me when we started was the whole community of people out there in business who were 100% behind us and supportive,” Holroyd comments. “The relationship now is ‘You’re a business, we’re a business, we like what you do, let’s get on’, but in those days it was warmer, people went out of their way to help us, which was special.”
However, although Holroyd feels that starting up a business is seen as a “very positive thing to do”, he admits that red tape and regulation, especially involved with employment, can be a “nightmare”.
“It’s crazy – think the rights of people to manage for the benefit of their staff and their business are diminishing,” he says. “I can understand that the rules are there to protect against the unscrupulous employer, but what it actually does is lower the bar and stops good employers being really good.”
The duo began pulling in contracts through their contacts in the industry, alongside some telemarketing. Holroyd feels that the initial small size of the business held advantages when attracting clients.
“There was a market that specifically wanted to speak to us because we were a startup,” he explains. “People were very keen because we were new, the reason being that they wanted to be a big fish in a small pond. One of their main buying motives was that they would be our main focus of attention.”
The business’ position has drastically changed since those early days. Holroyd Howe, which mainly covers London and the Home Counties, has two direct competitors alongside a handful of national caterers.
“We are on more of a level playing field now – previously, we had an angle because we were smaller and more desirable to prospective buyers,” Holroyd says. “Now we’re judged on wider, more tangible things.”
The growth of the company has outstripped even the high expectations of the founders, who admit to be impatient for success in the fledgling days of the business. Holroyd puts the rapid progress of the firm down to “culture and people.”
“We are a £30 million a year turnover company, but out vales are the same as they were eight years ago when we had no turnover,” he states. “That is crucially important – we may have changed the way we communicate those values, but the ethos itself hasn’t changed a jot.”
Holroyd Howe has steadily built a solid reputation with the minimum of fanfare. The decision was taken early on to not “shout from the rooftops” about the business – mainly because they would have little to shout about.
“More latterly, we’ve the PR up a bit as we’ve had to compete with others on a more equal basis,” Holroyd explains. “Our reputation is one of substance, integrity and delivering promises – that’s come on the basis of evolving a reputation rather than just putting spin out there.”
So what would Holroyd’s advice be to someone wanting to following in his footsteps?
“Plan it well and go for it – you have to believe in it,” he advises. “If you thrive on freedom and doing things your own way, you really should go for it.
“The freedom is wonderful, it’s unbeatable – you can’t imagine going back.”
www.holroydhowe.co.uk
