Business Advice, staff + expansion

[rjgreen4]

I am in a dilemma at the moment,

I work for an industrial refrigeration/air conditioning company and have worked there for 2.5 years from finishing university (Did an engineering degree – Sheffield), the company is only small (£1.2m turnover ~ 50%GP).
My role within the company is a sales engineer where I have to outsource new business, design industrial chill stores, air conditioning systems and process cooling systems, then arrange for our engineers to install/commission the systems.

I would say that I am quite successful as last year I brought in £280k+ in sales @ 41%GP and prior to that I didn’t have any experience in refrigeration/air conditioning or sales.
I watch all of the tv programmes like dragons den, and making a million, always thinking to myself with hard work its not really that hard as I have effectively made £114k in my first year.
Since I have been here I have developed a website using HTML, Macromedia flash and get around 100 hits per week, prior to that I had never build a website, brought in the sales listed before and created good relationships with some extremely large companies.

The aforementioned high levels of GP are sucked up by the high staffing levels as the company has a soft approach to keeping people on, what I mean is that there are about 3 people on £25k+ who do sod all, due to retire in 3 years but the company is scared of possible tribunals if they make them redundant, I mean these people have their heads in magazines and feet on the desk all day - see what I mean lack of leadership and control.

The slackers don't listen to an inexperienced graduate as they know everything with 40 years in the trade, these people have also in the past attempted to start their own business's up and failed in a big way, so the sympathy card was played and we re-employed them.

Recently I have been coming in to work and sitting infront of my PC and just wanting the day to end, I am so bored it is untrue.
It could be that I have not had a holiday for 5 months and that my holiday entitlement is only 20 days, of which 3 are taken up during the Christmas break and 5 days were taken up in March as paternity leave.

I aspire to run my own company and even though I work for my dad (he is the MD) I have no real desire to run the current company when he retires in 5 years.

I have just applied for an executive MBA that starts in January and I am hoping this will give me the tools to look at utilising the current business model (with different products/services) and hopefully moving the company (a company) forward.

I just don’t want to wait 3 years hoping that the MBA will solve my problems, I am in a real slumb and don’t know how to get out of it.

I am in a real pickle as I feel like just packing up my bags and going but I think this will hurt my dads feelings as I think he wants me to take over.


The main problem I have is that I get frustrated by the lack of leadership from the top and that the lowest people in the organisation (service engineers) seem to be ruling the roost as they know they could walk out at any point and cause trouble as it is very hard to get fridge engineers.


I have a lot of issues and would run the company in such a different way, paying more attention to obviously sales, marketing and lean financing.

There has been no upward shift in sales over the last 10 years, i.e. turned over £1m then and still do the same now and with spiralling operating costs and wages, it has inherently affected the bottom line.

I feel that I have too much to rant and rave about and would probably be better writing everything down at home and see how my suggestion would affect the current business and whether or not they would be beneficial to making the business bigger and better.

Idea 1 – would be to sort out the leadership and the staffing issues, get registered with an agency and have staff available – I know that agencies cost the earth and that there is usually a sting in the tail of you take the person on post term, but we will get a better return on a good engineer than any agency costs.

Idea 2 – Make the old fogies redundant or hound them with work and specific deadlines, seek legal advice on disciplinary procedures with poor performance.
Making them redundant will significantly affect the cash flow – I mean the company will be £75k in salary and NI contributions better off.

Idea 3 – Utilise some of the money from idea 2 to look at marketing and getting our company name out there.

Idea 4 – take on more sales engineers to look at increasing the turnover.


See what I mean, I think it is more than a holiday I need.

[peterjhale]

Hi am welcome to the forums

Sounds as though you have the world on your shoulders so perhaps a holiday is your first port of call

Thing I think you need to decide is do you want to run your fathers business. In the middle of your post you say you don't and then at the end, all your ideas are to turn the company around

It's a difficult decision.

And if you have the business skills (and it sounds as though you do) an MBA is not going to help you that much.

If you were on your own, what biz would you set up?

And then take it from there....

A lot of times, if you can see great potential, it's "better the devil you know"

Additionally, there are employment laws to protect both the worker and the employer and it sounds as though these could work for you

[rjgreen4]

Iam not sure what I want from the company, I think that I would need to implement those changes if I was to take the helm.

The underlying problem is that the industry is fraught with engineering consultants who use the specialist designs from a company like ours, then send the specifications out to tender, hence a waste of our time.
There are also the mechanical contractors who screw you down on price, an original design might have a gp of ~25% and after the mechanical engineers have had their piece, you are down at 10% ish, with retentions and unbelieveable restrictions, oh and the emphasis is on you if the whole job goes wrong, even when the engineering consultant has designed the job.

Not sure what to do, I just hope that I find a business idea in the next couple of years.