Role and company:?
Head of Loafing at?Loaf
Company turnover (and most recent ebitda/most relevant profitability metric):?
Third year of trading April 2011/March 2012: Turnover £5.5m, profit ?697,000
Growth forecast for the next three years:
Projected fourth year of trading April 2012/March 2013: Turnover £10m, profit £1.1m
Projected fifth year of trading April 2013/March 2014: Turnover £18m, profit £2m
Projected sixth year of trading April 2014/March 2015: Turnover £26m, profit £3m
In under 50 words, what makes your business distinctive in its marketplace:
Simplicity. Our ethos is to reduce, reduce, reduce. We offer a select range of beautiful, well made designs and aim to make the customer’s experience as fuss-free as possible: delivering at a convenient time, installing the new piece of furniture, taking away the packaging and even recycling your old furniture for a small fee.
What’s the big vision for your business?
To grow Loaf’s turnover from £15m to £100m over the next five years and eventually to become a £1bn business. We aim to achieve this by continuing to simply do more of what we re currently doing.
Loaf’s rapid growth has been the result of increasing the product range, employing Google advertising to boost web presence, along with ongoing press relations and the launch of a quarterly direct marketing brochure campaign.
We are on our way to becoming a one-stop shop meaning that customers can now “Loaf” all of their home. Since launching in 2009 and originally being the specialist for beds we introduced sofas and bedroomy furniture last year and now we re growing into pretty much all areas of the home.
The goal for the future is to build a “Loaf shack”. The giant 20,000sq/ft out of town retail destination will be totally bespoke, carbon neutral and made from sustainable materials. I believe that the future of the online home industry will see physical spaces running alongside online offerings.
Current level of international business, and future aspirations:?
At the moment our customer base is mainly in the UK however we do ship abroad as we re sometimes asked to. Some of our customers who know and love Loaf have also kitted out their overseas holiday homes with our designs. We would eventually like to move into urban China and Germany mainly due to geographical reasons. These locations would allow for ease of distribution over small areas but with a mass market to sound out the potential for future expansion.
Biggest career setback and what you learned from it:?
Before Loaf, I set up Primal Soup in the late nineties with a business partner. The food manufacturing company became the UK’s number one premium fresh soup producer for the likes of Pret a Manger, Pizza Express, Caffe Nero, Selfridges, Harvey Nichols, Eurostar, Compass Group, Sodexho, Avenance and All Bar One.
The biggest lesson was having a business partner who was also a friend. I learnt not to mix business with pleasure, even though I do think business should be fun! It was hard to make clear, decisive decisions.
When I started Primal Soup I had a lot of energy but less knowledge than I have today. The business was fairly successful but it took a huge amount of hard work and a few mistakes to reach the happy conclusion of the sale in 2005. It was possibly the best learning experience I could have hoped for and it made my objectives for starting Loaf very clear.
Another learning curve has been to define Loaf’s distinct look and to forecast what customers like without following personal tastes to stay true to what the brand is actually about.
What makes you mad in business today?
The short answer is phone and web suppliers. If our phones or internet goes down, which has happened more than once, it can affect our business. Even though we use one of the biggest suppliers it seems to be all about them and not us as their customer. Our focus is on good customer service and we like to deal with companies with a similar ethos.
What will be the biggest change in your market in the next three years?
The biggest change in the next three years will be to the online market. I believe that the future of the online home industry will see physical spaces running alongside web offerings. Instead of the high street versus online as two separate marketplaces these sectors will merge and run simultaneously.
Can businesses in your sector/industry access the finance they need to grow” If not, what can be done to improve things?
I don’t know about other companies but we re in a good position. To enable us to grow, we are continuously reinvesting our cash back into the business. Banks won’t loan to us to buy stock, however we are fortunate in that our cash flow allows us to do this.
How would others describe your leadership style
We are a fairly informal, integrated and creative company. The importance of a solid team is something I recognise to enable quick and effective growth. The employees” (or Loafers?) happiness is key to encouraging productivity and a culture of honesty.
Free Thursday lunches, duvet days, a bike to work scheme, and the friends and family discounts are just a few of the perks to encourage the whole team to feel enthused. A playful widget called the “crap-o-meter” has even been initiated to track and manage the team’s stress levels when dealing with any tricky situations.
Your biggest personal extravagance
I play tennis two to three times a week with a coach. The other main luxury is holidays with my wife and two young children. I work hard to be able to enjoy this side of life. I am guilty of still checking in on my iphone, though.
You’ve got two minutes with the prime minister. Tell him how best to set the UK’s independent, entrepreneurial businesses free to prosper:
Firstly, chuck the kitchen sink and everything else at improving our communication systems in the UK to become a hub for first-rate technology.
Secondly, reduce corporation tax significantly. I don’t mind paying it, however as tax is so steep, with over half of combined corporate and private income going to the government, it adds to the elements of risk/reward for entrepreneurs. This initiative might help to benefit the UK from more overseas investment and less tax avoidance and also keep recent examples such as Google, Amazon and Starbucks” tax income in the UK.
Thirdly, I think that the current structure for business rates is unfair. A three year moratorium on rates for start-ups would encourage growth.
Fourthly, I believe the government should invest heavily in offering subsidies and incentives to companies who embrace recycling and energy efficient, carbon neutral schemes. If there’s the will and backing the UK could become a hub for environmentally-forward business. It’s a missed opportunity!
Finally, I don’t think it’s the prime minister’s responsibility to support startups or that it’s the government’s fault if companies aren?t doing well. Companies need to be quick on their feet and constantly innovate and react to the times. Loaf launched during the economic downturn in response to consumers” demand for high quality, well designed goods at lower prices. We have since become one of the UK’s fastest growing companies.