Roy Stanley

Name:

Roy Stanley

Business:

Tanfield Group Plc

Web site:

www.tanfieldgroup.com

Years in business:

20

Number of businesses:

My first ever business venture was when my dad won enough money playing cards to buy a television. I was about six at the time and my friends used to sit along the back wall outside our window where they could look in and watch the TV. I used to charge them a penny each and if they didn’t pay the penny I would close the curtains.

It was an environment where we didn’t have much money, but it was very loving, and there was a lot of emphasis on getting a good education.

I was fortunate that I won a scholarship to a good school. After that, I started working in industry and commerce, and then very quickly decided that I wanted to be a school teacher.

I taught for over ten years in a local comprehensive in Newcastle. I think the defining moment for me was the fact that the next step for me would have been to become a head teacher.

I wanted to be a head of a really bad school, and I’d applied for the worst school in Middlesbrough. I didn’t get the job; the reason being that I didn’t have enough leadership experience.

I thought about the best way of getting the amount of leadership experience that would prepare me for a job like that. I thought, I’ve got to be in charge of my own destiny here, so I decided to set up for myself in business.

The original idea was to go back in to education, but I’ve probably come so far away from that, its twenty years later, and there’s no way back.

One of my biggest strengths is that I’m good at working with people. I’ve always believed that if you can control a class of 30 kids, you can do anything. If you can keep them interested, motivated, and get them performing at a higher level, it’s a skill set that’s very similar to running a business.

When I decided I was going to set up in business for myself, I used a mental phrase which was whatever was going to happen here, good or bad, I was going to learn from the experience and I was going to benefit by it.

I had three kids and a mortgage, but I guess I just have a propensity for risk, as long as it’s calculated. When I’m comfortable, I’m uncomfortable.

I don’t know what it is, it’s not what drives me and I’m not a gambler by nature, but I guess I just like testing myself. I like taking myself to edge to find out where it is. In 1988 I started with a desk and a telephone and that was it.

The Tanfield Group, which I started in 1999, has experienced massive growth since then. It started with a turnover of £50,000 and last year turned over £123m. When I started I had 12 people and now there are 1200.

So the day to day involvement with people is not as personal as it once was. I feel a bit like I’m the business’ mother- you like your mother to visit but you don’t want her to stay too long!

I started the Tanfield Group as a sub contract engineering company. I quickly realised that the future for sub contract engineering was not going to be great, particularly because we were focused on the automotive industry.

There was a lot of price pressure, a lot of competition from Eastern Europe, so we devised a strategy to move up the value chain, which meant that we wanted to make our own product. We wanted to be in charge of our own destiny as opposed to being in the hands of our customers.

We identified a couple of potential acquisitions, one of which was Smith Electric vehicles. Smith’s was a milk float manufacturer and there was an opportunity to go and grab a big chunk of the service and maintenance that Smiths was made up of.

So we brought new technology into the manufacturing, and we brought more electric vehicles to the market. When we took Smith’s on it was earning £4m a year. In the space of three years we’ve grown that by a factor of five.

Aerial Access is the third division of Smith’s. I was offered it as a private individual, but as I was too busy at the time I said I knew a good home for it, and brokered a deal to put it into Smith’s Electrical Vehicles.

When we acquired Smith’s I thought it was a great brand. So we re-engineered the product, increased the distribution network, and sales of Aerial Access expanded rapidly.

We got to a point where we needed other products. We went out and acquired a company called Upright for €10.5m. In 2000 we had 23% of the global market which was worth $1bn. Last year the global market was $7.5bn so the market has grown substantially.

Upright was turning over $30m when we acquired it and last year it turned over $130m, so it was a rapid expansion which combined with Aerial Access.

I’ve found that you need to stay in touch with the global market because it’s very dynamic. You’ve got different things around you where you’ve got different price mechanisms, and different inflation levels that can knock onto exchange rate issues.

As a global business, 80% of our supply chain is in the Far East and Eastern Europe so we’ve always got to be conscious of the dynamics of those economies and the price fluctuations that you get within them.

There’s a lot of hard work and endeavour that goes into researching the market. There’s a model that you use- first there’s unconscious incompetence, where you don’t know anything.

Then you get conscious incompetence where you find out what you don’t know. Then you become consciously competent so that you’re able to do things, but you’re always having to think about how to do them.

Finally, you become unconsciously competent, in that you’re very competent in what you do, and you’re not even sure what’s going on or how you get things done, but you get it done.

And within all that, there’s an element of good fortune, that bit of magic dust. In every business, there’s a point in time where there’s a pivotal deal. If you recognise it when it happens, that’s number one. Two is taking the opportunity when it presents itself, and number three is taking full advantage of that opportunity when you’ve taken it up.

I didn’t have a horizon of where I wanted to be, I didn’t set out to say I’m going to retire at 50 and make x millions of pounds. What I wanted to do was exercise my own creative talent. I just didn’t realise how quickly everything was going to move.

Within the first year of having started with a desk and a telephone, I was turning over a million pounds and employing 15 people. That’s when my learning really started in terms of growing and developing the business, the relationship with the banks, and more importantly recruiting people.

When you first start in business, you love living and breathing it with the people around you, and you do get involved not just from a business perspective, but also on a personal level with them. To some extent, this can colour your judgement.

The first person I ever had to make redundant because they weren’t performing- it was like putting a knife through my own heart. That person had left a job to come and work for me, and that experience is something that has stayed with me throughout. Whenever I have to do anything like that, you don’t lose sight of the personal things around it.

I guess one of the worst experiences that you can ever have in life is going home to your wife and saying, “We might lose everything.” It doesn’t get much worse than that.

When that happened, it was about determination. I gave myself a good talking to. There’s always a temptation to blame events, to blame circumstances or to blame other people, but what happened to me was nobody’s fault other than mine.

It took me about 24 hours to stop feeling sorry for myself and I thought, I’ve got responsibilities here, I’ve got to get up and get on and I’ve got to get this situation sorted out. So that’s what I did, and having learned from that experience, it was probably one of the most important times in my life.

If that happened to me now, I probably would have had a different response to that event. Previously I thought that I only had myself to depend on. Many entrepreneurs, and I put myself in this bracket, are paranoid. They believe that the world is out to get them so you put personal protective mechanisms up in order to deal with that.

At the time I guess I didn’t have the incentive to go and seek support. From the people who I did approach, there was a handful, and one person in particular, who never ever backed away from me; they always stayed with me and that’s something I really appreciate.

Over the past 20 years, I don’t think there’s a way that I haven’t funded the business, be it from bank money, debt, a little bit of family money, or credit cards. But what I’ve learned is that you fund your business appropriately, and you always need your umbrella even if the sun’s shining.

When you need funding, and times are tough, if you haven’t put things in place you’ll struggle to get it. Make sure you’ve got enough gas in the tank to make the journey. You may not know where the journey’s going to end, but make sure you’ve got enough to see you through for the foreseeable future.

I’ve had experience with venture capitalists, and those experiences have been good. Putting Tanfield together originally used up loads of development capital; they put up about a million pounds for me to do the deal. Within a space of two years they walked away with over £3m so they were very happy.

I think it’s all about recognising that you’ve got to stay in touch with people; you’ve got to be prepared to go and make contact with them and see them on a regular basis, keep them in touch with the story. For us, there hasn’t been a lot of issues with control; there’s been no interference in the business or anything like that.

I think there’s a misconception that people have about venture capitalists, that view of Big Brother looking over your shoulder making sure the business is operating in certain ways. I’ve found that that isn’t the case at all.

My more recent experience has been to do with raising money through institutions on the London market, either through the Alternative Investment Market or through Plus which is a junior market, and very good for small businesses that need to raise anywhere between half a million and £2m. It’s a good way of getting access to funding, it’s relatively quick and more importantly, relatively cheap.

I think that here in the North East, we need to learn more about breaking the traditional rules when it comes to funding, and we’ve got to help businesses do that if we want to see them grow.

Tanfield was thought about, conceived and developed in the North East, and there’s nowhere else in the world where we could have done what we’ve done. And that’s because of people.

The people here are great, their attitude to work is fantastic and their work ethic is brilliant. You can’t want for anything other than that, and with the right funding and the right support, you’ve got a good chance.

I’ve worked with some outstanding, unbelievable individuals. When you go into a meeting and see how they operate, it’s a bit like watching George Best on the football pitch.

I’ve always had the attitude that you recruit as early as you can the people that you can’t afford. I look for people who aspire for good things in their own lives, and they in turn are prepared to invest in order to get rewarded.

The team here is home grown; they’ve all lived and raised their families in the North East, and they’ve all had a lot more tread on the tyre than the original job they were hired to do. I looked for people who had quite high bandwidth.

A lot of the people who are here now came in when we were £10m turnover business and we were local to the North East. Now, it’s all over the world and we’ve got two facilities in America, one in Kansas and one in California, and we’ve got facilities in Japan, New Zealand and Australia.

These guys are now managing the whole entity- they had big bandwidth when I first hired them, so it was fortunate to get good people.

Walking out onto the shop floor gives me the most satisfaction. You’re relating to the people that you work with and seeing what’s been achieved over a relatively short space of time.

That’s worth getting out of bed for. It’s great, and it’s also profitable. The business is generating cash and it’s also providing security of employment for a lot of people, particularly in the North East of England.

As far as vision is concerned, it starts with you. What is it that you want for you, and what is it you see? Your vision then comes out in your ethics, what is it that people can count on you for, and what is it that if it all goes down in the basket they can count on you as an individual for, and what is it that you will never ever compromise on?

You then develop your business out of that vision. I guess in the context of my life, my vision’s always been bigger than where I was at the time.

About ten years ago, and I don’t know why I did it, but I made a pubic declaration that I would develop a business in the North East of England that employed 1000 people by 2005.

At the time, I didn’t have a clue about what it was going to look like, but the vision I had was what drove me. I wanted to create a business that was of a substantial scale, and employing lots of people doing worthwhile, sustainable jobs. I didn’t get it done until 2007 so I was two years out

People often say that your mistakes are attached to people; recruiting the wrong person. I don’t believe that because I’ve never met a person that I’ve regretted meeting. Every person in your life brings value into your life; it’s just maybe at the time you don’t see it.

I actually think I’m coming into the most creative, energetic, dynamic period of my life. I’ve been through a lot, and now I’m at the stage where what used to take me months and years to make a difference, I can now do in hours and days just because of what I’ve been through.

I have no ambition to retire, but I’m in a fortunate position where I’ve got the base knowledge to broaden what I can and want to do.

I think if you want to start out in business, the one thing I would say is, just do it, and try not to analyse everything to the far end of the proverbial.

It’s not going to be plain sailing. Maybe it’s just me but I’ve never yet seen a business plan that has done what it said it was going to do. Perseverance for me is the key. I always use this quote that my mother always used to say- “Failure is getting knocked down and staying down.”

I think you’ve got to believe that what you’re doing is good for you, good for your family and is worthwhile doing. There’s always room for people who are prepared to come in with a good service offering and a good product offering.

All the opportunities I’ve had in my adult life have sprung out of the North East of England, and a lot of those have been to do with the people who’re here.

I think there’s some immense opportunities for the right people with the right businesses, but you need the courage and conviction to get up and grasp them. There’s a lot of people out there right now who are working hard to make that happen.

You look at the local authorities and the infrastructure that’s available in the North East, it’s fantastic, what’s needed is the foresight to use it.

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