The recession was about to put paid to Patty and Mike Barrow’s kitchen fitting business, but they changed their offering and are thriving
Patty and Mike Barrow have been in the kitchen business for over 20 years, but the last three years have seen them change their strategy dramatically.
“Our main business since we started has been fitting kitchens on behalf of companies that sell the products,” says Mike, who trained as a carpenter and has since qualified to be an electrician – and also has the skills for basic plumbing as well as tiling and decorating.
“We worked with half a dozen independent shops in the South East, and also subcontracted from some of the national players when they were very busy. We also worked for some of the building companies on some of their smaller developments. It’s the sort of business that’s never going to make us millionaires, but we’ve always been busy and it’s provided a good career for us.”
Patty, who is responsible for providing quotes for each contract, as well as managing the staffing and accounts, explains that generally the company would have a pipeline of work about three months in advance: “This meant that my main role was ensuring we had the right staffing in place, we would be able to organise the stock and plan our finances well in advance. Single jobs would last about a week, depending on the complexity, while development projects could last up to six months, although we wouldn’t be working on them all the time – we’d do the show house first, and then we’d do each property once it was sold and the new owners had given us their specifications.”
Typically, the firm would employ between two and seven people, depending on the amount of work. At its peak, there were two full time kitchen fitters on the payroll, as well as a part time admin assistant. Then there were subcontractors, normally specialist kitchen fitters, who would be hired either per job or on short term contracts lasting up to six months.
Vehicles were – and are – the biggest non-staff running cost, says Patty. “When we were at our biggest, we had four vans on the road, plus a company car that I would use for site visits. I know that it’s now possible to lease vans, but it was more difficult when we set up the business so we’ve always bought them. The plan was to change each van every three or four years, but as the recession kicked in, we’ve decided to hang on to them for another couple of years – we’ve always taken three-year finance agreements, so we’ve just had to pay off the outstanding balances on the two vans we now have and we own them free and clear.”
Thanks in part to luck, says Patty, but also the skill of their staff, the firm has had no accidents in several years, so insurance premiums are much lower than they may expect. “We pay about £150 a month for all three vehicles, which is a pretty good deal,” says Patty.
The other main expense when it comes to finance is insurance. “Because we’re working in other people’s properties, there’s a real risk we could end up doing some damage,” says Patty. “And it’s not just while we’re there – we’ve got a good record, but we have had a water leak from a badly-plumbed sink that caused nearly £15,000 in damage to the property below the one we were working on.
“We’ve also got to make sure our employees are protected – touch wood there have been no accidents, but we use a lot of power tools so our premiums can be high.”
However, the financial downturn turned the business around. “In about two weeks, we went from a pipeline of work of nearly four months with quite a bit more on the cards, to virtually nothing,” says Patty.
“Work drying up was down to two things: firstly, housebuilders couldn’t get the finance to build any more properties, so we lost that part of the business. But perhaps more importantly, homeowners who feared the recession would cause them difficulties cancelled any home improvements and because the mortgage market was a lot more difficult, they couldn’t remortgage to fund any new kitchens. It was a very tough time.”
Although the company had no debts, it wasn’t able to keep going for long without making some changes. “We had to lay off two of the full time staff and we reduced the hours of our admin person,” says Mike. “It was probably the toughest thing I’ve ever had to do in business. We had some savings, so we were able to do ok for a few months, but it was a very worrying time.”
While the couple knew that business would eventually return, they had no way of knowing how long it would take – and it may not return in the same way, as two of their key clients folded within a year of the recession hitting.
“So we looked at what our key abilities were and where there was still demand in the market,” says Patty. “Mike is a very talented craftsman and we realised there is a very wealthy group of people around us – perhaps they wouldn’t be quite so affected by the recession.”
So the couple completely changed their business and with a new name – Arundel Kitchens – began to offer a new service offering top-quality bespoke kitchens to high end clients. “Patty had some friends who provided services, including concierge services, to wealthy people in Sussex and surrounding areas, so we started marketing Arundel Kitchens to them,” says Mike. We got a couple of jobs based on the fact I would do them at cost for my portfolio – soon orders started coming in.”
While some of the kitchen equipment and fittings that Mike works with is still manufactured by the same firms Mike used to deal with, he’s now responsible for much more of the actual build of the projects than simply fitting units.
“I’m actually using much more of my carpentry skills than ever before,” explains Mike. “The process takes a lot longer – we spend a lot of time with the clients trying to understand exactly what they want and then a lot of my time is spent in my workshop building the units to the specifications required.”
And while the business hasn’t been able to rehire any of its former staff yet, it has been able to subcontract some of the work to local specialists. “The fashion at the moment is to have a lot of stonework in kitchens, slate floors and marble worktops, that sort of thing. So we’re working quite closely with local masons,” he explains.
Because the quality of the work is so much higher, the works take a lot longer and the bills are correspondingly higher. “We used to get contracts that were a few hundred pounds a time,” explains Patty. “Now, we’re talking several thousand pounds – our biggest job has been for over £40,000.”
Arundel Kitchens in its current form has only been running for a couple of years, so the couple say it’s still early days and they’re still building the company. “We’re certainly not out of the woods yet, but this business is proving to be a good strategy for us,” says Patty. “We’re slowly building a reputation, we already have anough work for the rest of the year and we’re getting more enquiries.
“But we’d like to go back to fitting standard kitchens as well and we’ve been pushing that sort of the business – we’d been doing it successfully for many years and having two strings to our bow is going to make our business sturdier and more able to cope with any other issues, Hopefully we’ll be able to hire full time staff again – that would be our recovery!”