Swift Scaffold was a classic, owner established and owned business, established in the North Midlands by a time served and experienced scaffolder who wanted to “do it for himself”, using his three decades of experience in his industry. From starting as a trainee in the late 1980s, its founder learnt about owning and managing several scaffolding businesses before founding Swift in 2011. He built the business steadily until it was turning over £3M, with a small team of office staff and 30 scaffolders, most of whom were subcontractors.
Despite the outward success though, Swift was facing several critical challenges.
To give this context it’s important to understand the intricacies of the scaffolding industry.
The UK scaffolding services are worth an estimated £2.8bn but, like many trades dependent on skilled labour, the scaffolding industry is built on an unstable platform. That’s caused primarily by the ongoing challenges of recruiting and retaining trained and skilled labour. This is a problem endemic in the construction industry.
Perhaps regarded as unappealing to young people in this country, scaffolding is held in higher regard in mainland Europe, particularly in Germany and Spain where young people are encouraged into traditional trades. Here the construction industry as a whole doesn’t attract young people despite offering plenty of work, in varied locations, and with good rates of pay. Tradesmen, often subcontractors, hop around jobs, sometimes lured away by a few pounds a day more.
Which was one of the issues facing Swift.
In 2016 Swift had reached a plateau. Despite the business growing to £3M in turnover with healthy profits its founder faced a classic dilemma. The founder had built a reputation for quality services and was under pressure to take on more contracts. However, to him that meant more work for him and his family who were involved in every department of the business. Decision making was highly centralised. Holidays were constantly interrupted by questions from the team, needing directions. In addition, it was a constant challenge to keep good staff on-site with competition frequently poaching its team.
Not only that, the business systems were at a point where radical decisions needed to be made. To grow would mean investment in people, IT and possibly even premises. All of those meant added risk if they didn’t work out. As an owner operator dealing with everything from sales and marketing to cash collections, admin and HR not to mention H&S, its founder found himself a victim of his own success.
The owner, although highly competent and passionate about his business, couldn’t see a way to push the business onwards. He couldn’t work any longer or harder. There was no management team to take on some of the load and he needed to take back some control over his life.
The company had become a cash generative “beast”!
Fidelis is proud to be a people business. Our values are all about recognising the potential in people and focused on respecting and nurturing businesses to better health. We instantly saw a profitable business with good people at its helm, but one in need of some purpose and direction plus new energy and investment.
Right from the moment the Fidelis team start to assess a business for sale, through Due Diligence to completion, we actively evaluate the business for its strengths and weaknesses. That means that from the moment we complete a deal we are ready to implement what we call the Fidelis Business System, a blueprint of standards and practices employed across our group. It forms a crucial part of our acquisition strategy which is to acquire, enhance and hold onto our assets. This is the process we used at Swift.
The first stage of this system involves implementing a 90-day plan, an approach which tackles the immediate improvements we can implement quickly and easily.
That evolves into a measured two year programme to train and develop the management team left behind, in order to transform them into a forward thinking leadership team.
Typically, there are three ways to achieve growth in this sector:
We chose to make the people at Swift a priority. We wanted to make sure that we keep the best tradesmen on our sites and that they feel sufficiently motivated to remain with the company by Swift becoming the top scaffolding company to work for.
Seemingly small things can be a game-changer, and the motivational effect of having the best equipment shouldn’t be underestimated. We instantly improved the team’s toolkit, including workwear, vehicles and training and even upgrading computers and equipment which were under-invested in and made everyone’s working day easier and more productive and the results from this positive change were instant. From this improved performance we were able to improve everyone’s pay and bonuses.
Then we took it a step further.
We wanted to make sure that our newly energised workforce stayed that way and stayed with us. So, in late 2018 we formed Swift LLP (a Limited Liability Partnership) and we invited all staff, both office and on-site, to join and become partners.
The new culture created by the formation of the LLP was another game-changer. Now the team had measurable goals and bonus payments dependent on the performance of the company; their company. The team became empowered and motivated by inspirational leadership. They embraced the ‘no blame’ culture, supported by our mantra ‘If everything you do is in the best interest of the company, we’ll back you.’
Swift evolved into a vibrant and inspiring place where people want to work.
Fidelis grew the revenue in its first year of ownership by 36% and in year two that trend continued with a 27% year on year growth. We continued to reinvest profits into people, processes with the team growing to over 85 staff.
Swift was on track to achieve revenues over £5m until Covid19 hit the world! Despite that, because of the strength of its team and reputation with customers, the business has weathered the storm and continues to recover in the face of the Pandemic, winning it’s biggest ever single order in late summer 2020, worth over 7 figures!
So how did the deal work for Swift’s founder? Well, we are proud of the fact that the Fidelis team placed a substantial multi 7 figure sum into his bank account at completion, paid him a substantial 6 figure consultancy figure for a day a month and occasional telephone support, plus a further substantial 6 figure sum as part of the deal structure.
All of that gave him the freedom and money to take back control of his life (not to mention buy his Aston Martin which he’s justifiably proud of!).
For him, that freedom means he can spend his life doing what he wants when he wants and with whom he wants, including investing in property development for himself and his family, a long-cherished dream.
At Fidelis, we are always pleased to hear from business owners who are looking to sell or exit their business. Wherever you are in the process, for a confidential, no-obligation discussion please get in touch.
Telephone: 0161 410 7070
At Fidelis, we are always pleased to hear from business owners who are looking to sell or exit their business. Wherever you are in the process, for a confidential, no obligation discussion please get in touch.Book a consultation
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