Gearing up for success
Despite the recession, cash-flow problems and dyslexia, one young man is making his mark improving off-road vehicles, says
Having trained as a farm manager and worked on the land for several years, he was confident enough with machinery to start tinkering with the vehicle's gearbox. The result was a gearing system with modified ratios that not only increased his cruising speed to 75mph, but also improved fuel consumption and reduced noise levels.
A little research in the close world of Land-Rover enthusiasts convinced him there was a market for what he had produced - and off he set in 1991. It was not, however, to be a smooth ride.
The problem was not shortage of orders, but of cash. Demand for KAM Differentials' product from owners of such models as MGBs and rally versions of the Ford Sierra, as well as Land-Rovers, meant he soon had a turnover of pounds 40,000 from his base in Godalming, Surrey. But that meant he had to order thousands of gears to make his adjustments one at a time and had to take on more staff. All this, combined with the recession, put the young entrepreneur under severe pressure in 1992 and 1993.
Fortunately, he was used to the odd setback. His previous business, a chicken farm, had gone under when the 1987 hurricane struck southern England and blew down his barn.
Now he sought help from the Prince's Youth Business Trust, which helps people under 29 who have been unemployed for a substantial period or who have a disability, in which case the age limit is a year higher. Mr Mason had a double qualification in that he had been out of work and also suffered from the reading disorder dyslexia.
He persuaded the trust that pounds 5,000 would be enough to get him out of trouble. "But it wasn't enough," he says, adding that he then borrowed pounds l0,000 from the Rural Development Commission, while Barclays helped him to obtain a further pounds 15,000 under the Government's loan guarantee scheme. This financing, on top of the negotiation of a 60-day credit period with his suppliers, put him back on the road. Thanks to expansion of the export side from 5 per cent to 25 per cent of the business, and a deal to supply equipment to the Sierra Cosworth motor team, turnover is on target for pounds 200,000 this year and should double in the following 12 months.
Much of this could come from expansion into producing differential locks to assist the performance of off-road vehicles such as Land-Rovers in difficult terrain. Other companies are involved in this field, but Mr Mason is confident that he can beat them on price at the same time as maintaining his reputation for quality.
He also believes he has the management in place to prevent a recurrence of the original troubles. The Prince's Youth Business Trust adviser Eric Sidebotham, who visits the operation about once a month, has provided "a lot of tips on commercial contracts" as well as checking on such matters as cash flow. Although he is looking after the trust's investment, he has become "almost like a personal friend over the three years".
In the meantime, Mr Mason picked up some business knowledge himself through winning a place on a Cranfield School of Management financial course in a ventures competition organised by National Westminster Bank. Though it only lasted three days, it was so intensive and the tuition so helpful that he gained an insight into producing cash-flow forecasts, business presentations and SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. He now attends seminars organised by the trust and reads business books.
Moreover, his staff are also highly motivated. "They're working for low wages now, but they know that they'll be part of a big business in the future," says Mr Mason. And himself? "I'm ambitious and eccentric, and I don't think I would be very happy just bailing and feeding the sheep or chickens."
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