Company founder Kevin Warburton finished his electrical apprenticeship with a local company and decided he wanted a change. He then opened a retail shop in Holywell high street selling electrical goods and carrying out small electrical works. The company grew and moved away from retail to concentrate on the contracting side. The second director David Bamford came on board to look after health and safety, environment and quality systems. Together, they both pushed the company forward taking on bigger contracts and a larger workforce to cope.

Our main challenges when starting the business

The first major challenge for the company was the initial growth. Moving from domestic projects to large scale commercial and industrial ones, although helping grow the company, they also brought financial strains with them. They were suddenly requiring more labour to carry out the works and at the same time going from a 30 day payment cycle to 60 sometimes 90 days. This put serious pressure on the company’s cash flow and was a make or break moment. After fighting through the initial growth and breaking the one million pound turnover barrier, the global recession hit during the banking crisis and this was again another make or break moment for the company. At the time of the start of the downturn, the firm had taken part in a trial of a lighting upgrade framework for all North Wales local authorities. It then tendered for the framework and were successful, winning a four year four million pound contract. The framework success in the economic down turn was solely down to the fact that all of the works being carried out provided a cost saving. The initial energy savings made in a building, after the lighting was upgraded to T5 and LED with lighting controls, was used to pay back the cost of the works over the following five years. Once the cost was recovered the saving were then passed on to the building’s occupants.

Success Factor

The first key factor is the management of cash flow when growing rapidly. The initial jump in work helped grow the company, but the additional staff and payroll needed combined with increased payment terms with new clients, quickly had an impact on cash flow. To counter this, the directors had to manage this as best they could. This included increasing payment terms with suppliers and implementing a monthly pay structure to reduce the costs of running payroll. The second factor was the successful tendering of the lighting upgrade frame work. The work provided from this was key to the growth of the company. The local authority payment terms were back to the thirty days the firm was used to which helped offset the longer terms main contractors were asking for. This and the increased terms it had with its supplier helped make the company cash rich. Finally, the business utilised the cash flow from other contracts to invest in the new mechanical division. This has quickly expanded and is now providing a decent percentage of turnover. The long term plan is to grow this division to match the electrical division and effectively double our current turnover.

The Future

Over the next five years, the Ideal ICR Group is are looking to continue the growth of the electrical contracting and bring the mechanical division in line with it. This will involve expansion of the mechanical division increasing the labour force in key areas to support the growth.