Dean and Stroud get an early shock when the finance director they have lined up says he cannot join them. An internal promotion does not work out and staff are suspicious of Fearnley's new owners. Some leave. But others are promoted and Dean and Stroud encourage their staff by buying housing arm Brackenlea Homes' first new development site for a year. Dean and Stroud previously decided to move Fearnley into social housing to benefit from Labour's election and they appoint local housing expert Roger Holman business development manager. His own company has gone into receivership, but Dean and Stroud want to tap into his "energy and enthusiasm".
Another of Dean and Stroud's aims is to secure a stable workload by getting into building maintenance. Over Christmas 1997, their financial adviser TMG told them that £2.5m-a-year local maintenance firm MBM was for sale.
The pair are interested but they have to go head-to-head with a major contractor that is also looking to develop a presence in the maintenance market. Wary of their rival finding out that they are also in the running, they enter unintelligible signatures in MBM's visitors book whenever they arrive for talks. The larger firm appears to be in the lead but owner Malcolm Gemson plumps for Fearnley. A deal, part-funded by debt financing from NatWest, is struck. Meanwhile, Fearnley wins a major hospital refurbishment.
MBM moves into Fearnley's offices, but integration proves difficult.
Dean says: "Fearnley and MBM are two markedly different companies. MBM is absolutely service-based – which isn't to say Fearnley isn't – but Fearnley people are used to agreeing a fixed price, delivering a building and then leaving it. MBM is based more on long-term relationships.
"Fifty people from MBM took a large space on the ground floor. They had their own kitchen, their own accountant. It took a couple of months for us to realise we had to get people to mix." A company dinner-dance held in March was too early to help ease integration.
The hospital job means Fearnley is in the comfortable position of not having to tender for work, but a fall in enquiries prompts a change in strategy, and the directors decide to become more active salesmen. They attend every event they are invited to under a rota organised by a new marketing co-ordinator from HBG Higgs & Hill, Jean Gandy.
The biggest problem has been achieving by the end of the day what I set out to do at the beginning of it.
Fearnley launches its social housing arm under business development manager Holman. Dean and Stroud hope it will take off quickly, but they have not bargained for the tortuous approvals process for public sector schemes.
"We expected our first scheme to get off the ground more quickly. We had no experience of social housing, and that was a mistake made through ignorance, really," Dean says.
The first half of the year ends with a bang as ex-Barratt housing man Steven Riley completes the sale of the last of 35 units inherited with Brackenlea. Dean and Stroud are delighted: this beats all expectations. A corporate golf day for 100 people costing £2000-3000 threatens to turn into a disaster. A 72-hour downpour nearly washes out the event, but people turn up anyway and enjoy a drink and a chat. A far more serious cloud appears on the horizon. Just three months after completing the MBM acquisition, Dean and Stroud are horrified when its biggest client, BT, announces an embargo on all new maintenance spending.
This is potentially devastating. MBM has a contract to do all BT's maintenance work from the Scottish border to the north Midlands and Fearnley has just extended this to cover an area from Stoke to Worcester.
"It was a tense period because we were losing money while we were contractually bound to provide a level of service to BT.
They still wanted us to meet exacting standards in terms of response times, even though there was no new work," says Stroud.
"We had just bought a business, but no amount of due diligence could have uncovered BT making this sudden decision." On a happier note, Andrew Evans is appointed finance director, and a set of new financial controls are put in place.
The spring marketing drive begins to pay off, and ex-league cricketer Stroud is particularly happy to win a £2.4m hotel commission from Lancashire County Cricket Club. The firm also wins a refurbishment contract at Manchester University and work on an M62 service station from Granada as a result of its "big push".
And a newly created small works unit, staffed by Fearnley and MBM employees, picks up its first commission – a fit-out at Manchester's Trafford Centre.
It's been twice as hard as we expected. My main tip is to anticipate this and set realistic timescales
Dean and Stroud turn their attention to Fearnley's £1m-a-year window replacement and refurbishment business, which they feel needs a boost. It is given a new marketing strategy.
Stroud, in particular, finds himself wrestling with disappointing contracts that he and Dean have inherited. On the up side, the pair negotiate their way out of the BT deal "with kid gloves" after several months of losses. They vow to spread MBM's business to prevent similar crises.
Dean and Stroud announce redundancies as Fearnley and MBM's accountancy operations are merged. There are seven redundancies in the year, although overall staff numbers rise from 130 to 180 with the acquisition of MBM.
Telling people they are losing their jobs is "absolutely the worst aspect of managing", Stroud says.
This month is a high point for marketing supremo Dean. Client the Francis Taylor Foundation is so delighted with its day centre for disabled people that it names the building "Fearnley".
The contractor's site manager helped win the hearts of the charity by taking the nuns who administer the centre on day trips to the Lake District.
Postscript: January 1999