Pete Hunt

Name:

Pete Hunt

Business:

Fresh Element Ltd.

Web site:

www.freshelement.co.uk

Years in business:

3

Number of businesses:

2

Entrepreneurs' Forum member

When I left university four years ago I think the biggest commitment I had was a mobile phone contract. I’d never thought about running my own business but the timing seemed perfect. I didn’t have any responsibilities or anyone who depended on me for income. I had the opportunity to put 100% of my energies into the company.

Me and my business partner Andy who graduated with me just said, we’ll give it a year to put a business together. If it doesn’t work out, we’ll just go and get normal jobs. The thing was it all just snowballed from that point.

The initial thought for the start of the business was probably to put off having to make a decision about what I actually wanted to do with my life. At university I’d done an IT degree. I’d also completed a summer placement with a multinational company in their IT department, but didn’t enjoy it at all. It was difficult to see the tangible results of the work I turned out. When I qualified I looked at the kind of jobs that were available and none of them really appealed to me.

There was never a plan to not get a job. You talk to some people, and all their lives they’ve wanted to work for themselves; to be an entrepreneur. But the thought had never crossed my mind. With my generation it’s sort of typical: you go to school, then sixth form, then university, then become employed.

But I knew that I wanted something that would give me a great deal of job satisfaction; something where I could directly see the results of my work. I was talking to a friend of mine recently whose situation is exactly how I think I would have ended up if I hadn’t set up my own business. He was on my IT course and when he graduated he got a job with a big company. He’s very well paid and when he goes home at five o’clock in the evening he’s got nothing to worry about because he doesn’t have that much responsibility within the company.

At the same time though he feels as though what he does doesn’t really make that much of a difference, nor does he really like the people that he works with. He sees his job as being able to afford him a lifestyle where he can do what he wants evenings and weekends.

I’ve got a job that doesn’t afford me too much of a social life at the moment, but that’s because I have a huge amount of responsibility in my company. Also, I go into the office and everybody I work with I actually like as a person. We all work really well together because I work hard on putting together a great team. Whereas when you become employed you get thrown in with whoever you need to be with.

My friend hardly gets any job satisfaction but when something good happens for us we tend to get loads. I’m sometimes a bit envious of people in corporate jobs who’re getting a great wage, especially because I can’t afford to give myself a huge amount at this early stage. But most of the time I think, I’m glad I’m not them.

When you run a business you’ve got a huge amount of potential to do what you want. Working hard and taking a few risks can move you forward dramatically whereas a job in a multimillion pound company, even if you work flat out from the beginning, you’ll progress at a steady rate but it will probably take you quite a while to get high up. With what I’m doing, your work rate is directly proportional to where you take the business.

The idea for my company, Fresh Element, came during one of my business modules at university. I was looking at a food business which was based in London. They produced high quality, freshly prepared meal kits to wealthy professionals and people who didn’t want the hassle of shopping but still wanted to do the enjoyable cooking part.

When we started, we followed that model whilst focusing on using fresh, natural ingredients, sourcing locally in the North East as much as possible.

One of the holes in our business plan, which was undoubtedly the biggest, was that we wanted to start a business in the food industry, but we didn’t have anyone in the company with even the slightest knowledge of the food industry! We needed to have a local chef with loads of experience, and believed in what we were doing because we wouldn’t be able to pay them the salary they would hopefully deserve at this early stage.

We met Richard through a local friend, someone who we met at the Bridge Club. He was the first person we talked to and he came on board straight away. He had a great reputation with over twenty years experience so it was great for us to have him come on board and he brought loads of great things to the company. You work hard to start up a business but every now and then you get a few lucky breaks, and Richard was definitely one of them.

We sold meal kits online through our website and that’s how the business ran for the first six months. The problem was that we had about thirteen items on our menu but our customers tended to be impulsive about when they wanted it. It was often the case that they would order at 2pm and want it by 5pm, and we constantly had to meet that demand.

We had to make enough products but because we use fresh ingredients they have a short shelf life. The wastage was quite high if the demand wasn’t a much as we anticipated. It was quite a horrible situation to be in really. We wanted to give our customers enough choice that they’ll order, but to prevent wastage we needed to limit it.

We didn’t completely change our focus after that; we just decided to become customer- led. We had a group of customers whom were constantly asking us to do things we didn’t have the resources for, like catering for big occasions. People kept asking us, why don’t you do this or why don’t you do that? When we tried it, we actually discovered that we were quite good at the catering thing, and buying stuff to order meant that wastage was virtually zero. Listening to our customers meant that we had a much more profitable business after that.

When we started out, we talked to Newcastle University enterprise centre who put us in touch with Business Link, One North East and the Prince’s Trust. They gave us a lot of practical advice as well as grants which got us up and running. I do wish that we’d been given a wad of cash at the start of our business instead of wasting our time with expansion loans as the business started to grow, but in reality I don’t think anyone would have given it to us. We didn’t have a track record or an experienced management team. But we’ve never really struggled to get finance; help has always been available through various support organisations.

I don’t think there’s any stage of starting a business that’s academically difficult. It’s not like learning algebra or anything; it’s just a case of learning how it works. Practical stuff, really. I don’t think I’m an academic person, but I am quite practical so that suited me to the business well.

The hardest challenge we had to face was managing growth. In the early days, profit wasn’t that important. It was all about growing the business, getting the turnover up, generating sales and building a reputation. We ended up selling ourselves short a bit, like doing special discounts just to get our foot through the door.

But you get to a point where you start to meet your sales targets, and profitability becomes a bit of a concern. What happened with us is that we began to grow very fast. Once word of mouth developed, our order book was growing at a much bigger rate than we even hoped it would. For the past three years we’ve doubled our turnover every year and whilst that’s great, it was very difficult to manage; we didn’t always have the time or resources. For example, when we needed to buy new equipment we didn’t have the time to seek out the best deal.

Growth can be difficult to manage, as we learnt the hard way. But at least you know that you’re heading down the right line and you’re onto a good thing. We also invest a lot of our growth back into the business so we can perform better as a company.

We have a very seasonal business so turnover can fluctuate quite dramatically over the course of the year. But we know when we’re going to be quiet and when we’re going to be busy so we can structure our resources to meet that.

We can’t afford to pay full time chefs in the months when we’re going to be quiet. Our solution was to use agency chefs initially, who did work for a couple of days a week during our busy season. But that proved to be very expensive and we were getting different people every time so it was a struggle for all the chefs to get into a routine and work well together.

Now, we bring in two or three chefs on a four month contract and they work for us throughout the summer. They integrate into the existing team and can get up to speed with what we’re doing and how we work. The pool of talent is especially good in this region so we’ve never really had a problem with getting the people we want to fit into our team.

In business, you don’t tend to make mistakes; you just find more efficient ways of doing things. Every year we look back and we work out a couple of things that could be done more efficiently and implement them the following year.

A personal challenge which I faced was going from the student lifestyle to managing my own business. I went from having virtually no responsibility, acres of free time, barely a care in the world really, to having a huge amount of responsibility and lots of things to worry about. But the advantage was that as a student I never had any money anyway, and when we started the business I wasn’t able to take a very decent salary so that wasn’t too much of a problem.

Also, at that early stage in your life, you don’t tend to think you’re too good to do certain things, be it driving a van, doing the accounts or speaking to customers. You don’t have an over-inflated opinion of yourself which is really important when you start a business because to begin with, you have to do everything yourself.

I don’t know anyone who runs their own business, puts in a mediocre amount of effort, and ends up doing fantastically well. You need to ask yourself if it is something you want to do and are you willing to put the hours in and how it will affect the others around you. Look at it as a lifestyle choice rather than an opportunity to make an obscene amount of money.

Be prepared to be open to people’s advice and criticism, but don’t feel like you have to take it. You don’t have to be drawn by one person’s opinion.

The most important thing is to be good with people. Not just customers, but with people who you employ too. Take an interest in the people who work for you. That will really help you to build a company that you’re proud of and will give you a huge amount of satisfaction.

return to Pete Hunt's profile