Small Business Special - Why attention to detail is vital to succeed

 

This year my studio business is celebrating its 40th year. This is an achievement (outside of my personal life), above all others, that I am proud of. This year will be far and away our most successful ever. By every measure we are doing very well. Every week we are getting some of the worlds most famous artists turning up. When we started as a dinghy rehearsal space in a derelict caretakers cottage, in a run down industrial estate in Mill Hill, I never dreamed that we'd achieve anything beyond being a well loved space for a couple of local teenage punk bands. I was 16 at the time, still at school and my primary motivation was to have somewhere for my band the False Dots to rehearse. The year was 1979. It took ten years before I even considered the operation to be a business. At the time I had partners in the venture, but my day job was working in IT. I'd gone into IT as in the 1980's the entry criteria was low and the rewards were good. I was extremely lucky to have a fantastic boss, Mr Peter Sutherby at SPL International, who trusted and empowered me. He passed away a couple of decades ago, but was a true gentleman. His style was to let me get on with it and support me when I needed it. Although my title was the rather grand "Tandem Operations Controller", I was a dogsbody. I did everything to keep the in house systems running. This meant ordering paper, printer ribbons, dehumidifiers, organising backups, maintenance and performing system upgrades and doing some systems programming work. I also cleaned the tea machines when Ted, the maintenance man was off. I loved the place. There was a brilliant social life, every evening, the 20-30 young graduates working for the company would adjourn to a pub close by. The office was in Windmill St, off Tottenham Court Road. If I managed to save some money on a paper order, Peter would buy me a beer or lunch. If there was an emergency, I'd often have to stay till 3 in the morning, but if there wasn't and I wanted to visit Clare at Uni in Manchester, he'd let me knock off at 4pm on a Friday.

In short, I had responsibility and I learned the value of paying attention to detail. I left SPL in 1986, after it was taken over by a far more regimented company. The job had well prepared me for future jobs and also for running my own business. I realised that managing a balance sheet is key to success. But, with regards to my studios, I also realised that we were not a 'normal business' and there were different rules in operation. This became clear in 1986, when we tried to borrow £3,000 to buy a PA system. The bank totally refused to lend the business the money. Then the manager said that as I had a career in IT he'd give me a personal loan, no problem. This has been a recurring pattern. The UK does not understand non mainstream business. Lending is far too conservative. Three times, we've tried to borrow money and three times we've been refused. Every time, the reason is the same, in short because the bank doesn't understand the risk of a music related business. When we wanted to borrow money to build our new block, they were happy to finance the building, but not our plans. The reason given was that our turnover did not demonstrate that we could support the costs of the new block. Of course it couldn't, we were doubling the size of the operation and opening amazing new, purpose built studios instead of ramshackle converted lock ups. I had a stark choice, raise the money myself or give up on my dream. I was lucky that my IT skills meant I could secure lucrative IT contracts. I also managed to conduct a major property deal that gave me the finance in place to complete what we planned.

The new studio block opened May in 2012. It was fully operational by September. Since then, we have grown our turnover every year. The growth has been as follows

Year	Growth
2019	18.7*
2018	8.8
2017	5.1
2016	2.7
2015	16.2
2014	30.7
2013	15.3

* Year to date

For a mature, 40 year old venture to be achieving double digit growth, I would say is pretty impressive. But you may ask, what happened in 2016? The answer is actually quite simple. In January 2016, I had a medical procedure to deal with prostate cancer. This really knocked the wind out of my sails. Interestingly in January 2016, we were showing 24% growth on the previous January. I had six months where I completely lost focus. We have a good team at the business, but the eye was taken off the ball. And when you take your eye off the ball, it can be very hard to get it back.

Last summer, I realised that we had let the business drift. I've always kept sophisticated spreadsheets tracking what we were doing, but I'd stopped analysing them. I locked myself in a dark room and did some serious number crunching. Music, like all businesses, changes constantly. There were several major trends in our business that I'd not made the effort to spot. The most important of these was that our dance studio was booked to capacity, whereas other studios were empty much of the time. So we repurposed one, with the conversion taking place over the Xmas break. Another trend was that our piano studio was also at capacity, so another piano was purchased for another studio. Further analysis also demonstrated that one of our old traditional rock and roll studios was far less utilised than the others. It seemed that people were actively avoiding it. Three years ago, it had been the most popular. What had changed. Some analysis of our website showed that the description was rather off putting. A simple edit was done. We also did a refurbishment of one of the studios that had become tired. As you can see, this has born great rewards.

We also talk to our customers. As a result of this, we've installed a far more robust wifi network in our reception area and new block. This is vital for many of our new generation of customers and is appreciated.

We've also analysed our costs. Many of these we have little control over. Rates go up, utilities go up, wages go up. When we built the new building, we put huge solar arrays on the roof. These actually bring in cash, they also help us realise our green agenda. We identified that there were savings to be made in advertising costs. This has to be managed sensibly and monitored, but we've cut this by around 50% whilst still raising our turnover. We now are being far more tactical in how we manage our advertising. It has paid dividends. We are doing far more 'free' online advertising than we were two years ago. My advice is very much to tinker and see what you can trim, but also to see if you are missing a trick. We have been far more active on Instagram, which seems to be working quite well.

We are now actively planning another round of development. Our new block has allowed us to develop new partnerships. We are reaching the point where in two years we will be effectively at full utilisation. Other businesses want to relocate to our site. Mill Hill is becoming a major arts hub and we need to make the dream a reality. We have planning permission for a new building. The uncertainties around Brexit put a spanner in the works, but we now have some major partners who are keen to push on. In the modern business environment, the successful businesses of the future will be those that collaborate effectively. Concentrate on your core, what you do well, and bring in partners who can add value. The reality is in the numbers. We've seen growth of 244% since 2012, in a business that's been running since 1979. This is not solely down to me, it's down to the great team we've put together, our partners and the loyalty of our customers. The great thing is that I feel as if the challenge is as fresh and exciting today as it's ever been. I think that to succeed in running a business you need three things, a passion for what you do, attention to detail and teambuilding skills. Understand your limitations and your strengths. If you can't do something which is key to the business viability, find someone who can. One of the best lessons Peter Sutherby taught me is that when you find that person, let them get on with it and support them.