Ditching a steady job on the eve of recession: now there's a cunning plan! Why – and how – did he do it? Read the blog and find out…
Mark Kennor had a stable job and an affluent lifestyle but chucked it all in to be his own boss – in the middle of the credit crunch. Here, the co-founder of London-based Pure Fitout, which offers interiors solutions to the hotel, leisure, entertainment, office, retail and education sectors – and member of the Building Gloomwatch panel – explains how (and why) he did it.
January 2008After spending the Christmas holidays reflecting on life, I returned to my job with Vivid Interiors with my new year's resolutions in mind: first, to give up smoking; and, second, to work so hard that my bosses will have to promote me to managing director by the end of the year.
But I was finding it increasingly frustrating having to answer to bosses. It made it impossible to take the company in the direction I believed we should follow.
So work wasn't going as planned. But on the plus side, by the end of January I was strolling around the office bragging that I had not smoked a cigarette for some weeks.
FebruaryMy desire for world domination was becoming acute! I was surrounded by inspirational people who were in control of their destinies – from my boss to our clients. I wanted to be in their shoes, making the decisions.
In an attempt to quell my impatience, I decided to find out where my bosses saw me fitting into their plans. I managed to arrange a meeting in early March with the group managing director – whose job I was incredibly jealous of – between his board meetings, breakfast get-togethers with the chief executive and other high profile commitments…
MarchIn the meeting I told him I was coming to the end of a part-time construction law master's degree and was keen to start an MBA in the autumn. My MD said he'd support me attending one of the top three courses in the country, but only after taking a year off from studying, which meant putting my plans on hold. Offers like this are rare so I accepted with gratitude. But it wasn't ideal.
Unless you are the guy at the top, you have to do what you are told. I tried to accept this but it didn't stop my irritation at having to follow orders when I believed I could do a better job myself. Finally, I couldn't take it any more and I approached a colleague with a proposal: let's set up on our own. We arranged to go away and work on some ideas and then meet a month later.
AprilI spent the early part of April revising for my construction law MSc final exams; a much-needed holiday followed. On vacation I read The Black Swan, which introduced me to the two worlds inhabited by us all, Medriocristan and Extremistan. Those who live in the latter are exposed to random and unforeseen events which can have either catastrophic or highly positive effects, known as “black swans”.
I realised that I had been inhabiting prosaic Medriocristan, where everything remains stable without prospect of significant success. I returned to the UK with the idea of getting a one-way ticket to Extremistan, where I would set up business, shielding myself from bad “black swans” and embracing good “black swans”. I decided that I simply couldn't continue with the frustrations I had experienced from working for others.
MayMy business partner and I had our fateful meeting at the beginning of May, where we hatched a plan to launch our own fit-out business. We thrashed out finance, cash flow, branding, company structure, target markets, legal issues, marketing, long-term aspirations, a micro plan for the first year of trading and a three-year business plan.
We had based our estimate of the work we could win on assumptions. So the next step was to do in-depth market research. This meant contacting potential clients and sizing up the competition. The results showed there was enough opportunity for a successful venture.
Finding a company name to reflect our aspirations came easy, as we knew what we wanted to achieve and were given the name by a friend who understood our vision. We employed a designer to create our logo. Pure Fitout was born.
JuneOver the first part of June, we defined an ethos for the company: We would offer a highly bespoke, personal, passionate and professional service, add value to our clients (Egan et al, 1998) and win repeat business.
We were now ready to appoint our professional advisers. This is a must for any start-up business. The importance of appointing a good accountant, seeking legal advice and finding a good business adviser at a suitable bank cannot be underestimated.
JulyVia an agent we incorporated Pure Fitout, launched our website and began to seeking work. It was an exciting time, but we were becoming increasingly conscious that the global economy was in trouble. Previously we had felt we were below the radar of any credit crunch, as we were debt-free and our overheads were negligible. However, while we did not need to turn over large sums to keep the business going, in the event of a full-blown recession we now feared we might struggle to bring in enough work to take care of even our relatively low overheads.
Then some good news. We started negotiations on a hotel fit-out project that would secure a quarter of our projected year-one turnover. I received a further boost when I was informed that I had passed my exams with good grades.
We were both still in full-time employment and had to spend our evenings and weekends working on tenders, strategy and general administration of the business. I decided to make the jump and handed in my notice, and by the end of the month, I was entirely dependent on Pure to make my living.
AugustLeaving full-time employment after 15 years was both liberating and scary. I was my own boss, but I had no safety net. Accustomed to a relatively comfortable lifestyle, I needed to prepare myself to saying goodbye to that for a while. I embraced the idea of living on salad cream sandwiches, which reminded me of a long summer spent in Spain as a teenager, working in a bar - I had managed to enjoy myself then, so I was confident I would prevail again.
Losing the camaraderie of my workmates, whom I spent a large proportion of my life with, was the hardest thing. I endeavoured to keep in contact while hoping that my business would be successful enough to create a similar enjoyable environment full of team spirit.
We were now fully engrossed in negotiations for our first project. Site visits, frank discussions and information exchanges were in full swing. It was a tense time, as we didn't know whether we'd ultimately land the work.
SeptemberAt last it became obvious we were going to win the job. Phew! But there was no time to rest – we got straight into rustling up more work. It was a bit of a shock when we realised that aside from tendering, planning, operations and general business administration duties we now had to start a marketing campaign... While I had no experience of publicity, I must confess I loved it! It was what I'd always wanted: to make the decisions myself, come up with the ideas and develop the strategy.
Then all of a sudden the media went into a frenzy over the credit crunch. Various financial institutions began to collapse, global stock markets plummeted and that terrifying word “recession” was being bandied about.
OctoberWe had a number of projects under way and were confident that we would win some more soon. If we could survive what was now increasingly looking like a recession, we could go on to great things.
After 10 months smoke-free, I found myself sneaking the odd cigarette, usually when reading the business pages...
NovemberWe were now cracking on with our first project. It was great to be making the decisions on the ground instead of having to report to head office. It meant we could be innovative and react quickly to issues. For instance, we adopted open book accounting and we introduced bonuses for site operatives who put in extra effort.
Bizarrely, there was something very satisfying about working long hours and weekends. It was because we working only for our clients and ourselves, rather than employer.
DecemberOur handover for the first major project was 13 December. This passed without drama and the finished product was great. We had photographs done of the project for the website and embarked on a marketing offensive, meeting potential clients and spreading the word that we were up and running. We agreed that we hated the sales pitch approach. So made a deal to each kick the other under the table if he was making people glaze over.
We had by now turned over approximately one-quarter of our target turnover of £2m for year one of trading. We seemed to be bucking the trend of the rest of the economy. I managed to get a few days in Italy over the festive season, but I wasn't able to relax because I dying to get on with building the business. As sad as it seems, I was looking forward to getting back to work…