Region: West Midlands
Programme: Investment Programme and our other commercial investments
Many business owners simply want to create and maintain a comfortable lifestyle through their own endeavours. But sometimes such modest ambitions are put aside, as staying still may prove to be more hazardous than expanding – and that expansion then needs funding.
When Gary Oliver and his wife Karen first decided to set up their own employment agency in 2000, specialising in the recruitment of HGV drivers, Go-Direct would be one of those tidy, single-office, lifestyle businesses.
Fast forward through a traumatic recession and subsequent recovery, and Wolverhampton-based Go-Direct is a rather larger enterprise than that.
It’s still a recruitment agency for truck drivers. But it’s also running training and support courses for drivers which range from first aid to forklift truck handling. Oh, yes, and it now has a growing fleet of HGVs that will be close to 40 in number before 2016 is out. Transport and distribution companies across the Midlands, let alone drivers, now have Go-Direct on their books as a key supplier. Spread across two sites and employing approximately fifty full-time employees as well as numerous sub-contractors and temporary workers, it’s a healthy, growing business.
The diversification of the original recruitment agency came about as an effort by Gary to keep some of his best and long-standing drivers in work in the difficult period post-2008. The first Go-Direct truck went on the road in late 2011.
Not only was it a steep learning curve – it was a gamble that had to pay off. “We had not run articulated trucks before,” recalls Gary. “They are assets but if they are not in use, they are potential millstones. But we knew that there was always work for HGVs – we just had to find the right work.”
And soon they did, landing a significant contract with logistics giant CHEP. “It was against the odds, but that was the contract that allowed us to expand our transport business,” says Gary.
Building up a transport business is a different proposition from running a recruitment agency. An HGV doesn’t come cheap; even a single-axle second-hand vehicle can cost £40,000. To operate HGVs, applicants are required by the DVSA to demonstrate and maintain “financial standing” – being able to show £7,000 for the first vehicle and £3,900 for each additional vehicle to be authorised. “In the early days we used an overdraft and traditional bank loans but it was expensive and not a comfortable experience to put in place,” recalls Gary.
A better financial route had to be found. Go-Direct met Shire Leasing, a privately-owned finance house that specialises in leasing specifically for business critical equipment in the B2B market place.
Based in Staffordshire, Shire already supports over 66,000 SMEs across the UK. Its finance solutions enable smaller businesses to acquire a wide range of key assets from telephone and catering equipment to software to livestock and small wind turbines.
Shire Leasing is a partner of the government-owned but operationally independent British Business Bank, which helps to support new and alternative lending models for smaller businesses. In 2014, the British Business Bank invested £40m in Shire to match an additional £40m of private sector funding.
This additional firepower enables Shire to provide finance solutions for more assets outside of standard plant and equipment. Go-Direct has installed a new switchboard along with fibre optic cabling and portable cabins in its new business premises . And, most importantly, it is increasing the size and scale of its fleet.
“We have an operating licence for 40 HGVs so we want 40 on the road,” says Oliver. “There are many benefits to our company by leasing the assets as we retain our cash flow and our payments are fixed for the lease so we can accurately budget for the cost. It is also great for our image, as having pristine new trucks really sells our business and gives confidence to our customers.”
It’s been a steep management learning curve. The recruitment and training sides of the business are more predictable, but there are more unknowns in running a transport business. Trucks break down; yards need repair facilities; cash reserves have to built in. However, Oliver is keen to expand this business further. New opportunities continue to emerge. “I used to turn things down,” he laughs, “but now I look at every chance that is offered to me.”