Matt Grainger talks to the founder of Sevenoaks Computers, Robbie Herd, about going full circle from services, to retail, and back to services.
How did the company come to be founded?
I was working as a financial controller for ANC, managing and tightening cashflow, and I was using Sage so I was able to keep an eye on way it was being developed. The tradition at that time was for central software to give customers a way to control their business. I thought this would develop well and give a growing opportunity.
So you saw an opportunity?
Yes, originally Sage was a DOS programme and I’d used it for a number of years while I was working at ANC. It was a bit of DOS software that everyone used and then they came out with the first Windows version and I thought: “they’ve got this sorted.”
At that time, software was for perpetuity, there wasn’t a maintenance charge or annual charge as such – certainly in the small business arena – and I think Sage changed the way that worked by going to a subscription model. It had its fingers on the pulse to a certain extent.
So it brought out versions four and five and the way Sage handled the products, the stock, the customers – to me it seemed like the central all-encompassing database for a company – and I thought they’d develop that side of it. So I just thought that would give a good opportunity to take Sage and do the job I was already doing as a stand- alone business.
So you didn’t start out as a retailer?
No, but Sage didn’t deliver on those expectations, in my opinion. I don’t think it took advantage of the opportunity. It didn’t develop as an all- encompassing package for business, and in fact there were a number of companies who produced software that turned Sage into just another product on the shelf.
In the end we found more traction selling and servicing laptops and PCs. We spent a lot of time marketing and pushing Sage and we helped a lot of companies manage their cash flow, but people started coming in to the office looking for hardware. We didn’t expect it, but that’s what happened.
Well we started off dealing with business but we got more retail customers just turning up. They got to hear of us and started asking if they could buy computers.
So how have you grown your business to what it is today?
Well, the biggest help over the last few years has been the Network Group, which has consistently provided great deals. But we got the business growing locally by networking with local businesses and using the Network Group to develop the retail side, which led to us opening the retail shop in Sevenoaks.
Obviously being in a group means that they can negotiate group deals – how valuable is that to an independent?
I think the knowledge that you get from the group as a whole on particular SKUs, and also you get a feel for what the market’s doing by talking to your peers is invaluable.
This is the broadband and managed print services...
Yeah, broadband and managed print but also business contracts, Microsoft Server, Microsoft Office, hosted services, all these things are discussed in the group and obviously we network – it’s the Network Group – and you just get to see what everybody else is doing and it helps bring some things to the fore.
How have the customers changed over the years?
I think we’ve changed more than the customers. Customers have always wanted good prices and great services. We’re all customers. We need products, services, reliability, longevity and good advice. In that respect, I’m no different from any of my customers – they work in one area and I work in a different one.
So the local customers don’t change really. They know what they want, they drive a hard bargain and we try to respond to that. I think margins have got tighter but we’re still able to compete.
So what has been the biggest challenge?
The biggest challenge is probably cash flow and staff management. A lot of people who come into IT love PCs but aren’t necessarily business people as such, so it’s about keeping them focused and trained.
And in terms of cash flow; is this with banks or distribution?
A little bit of both – getting credit lines from suppliers and keeping good terms with the bank. The customers’ buying patterns wax and wane with the suppliers selling patterns so it’s about keeping an eye on the stock, making sure you buy at the right time and maintaining that cash flow.
So what advice would you give to some one starting out?
I think you need to treat the customers as yourself. Often you can make a good decision about what you’d buy and what you wouldn’t buy, what rates to you as good service and what doesn’t. Don’t see them as a separate entity, just try and sell what you’d buy.
Obviously I think networking with your customers and suppliers is essential. If you network with customers – anyone’s customers – it gives an opportunity to find out what they’re doing and what they’re talking about. If you get into networking with suppliers and other dealers, it’s the same thing.
If you see a customer over a till or on-site, it can be a them and us situation, a client relationship, but if you see them before or afterwards in a different environment you can get a feel for how they handle people and deal with various situations. I think that’s invaluable.
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