“The biggest challenge at the moment is trying to give the customer value for money without dipping too much into your margin. The market is very price-driven, so you’ve got to get the balance right.”
Janet Waters makes no secret of the main issue facing catering equipment services businesses these days, but if you think she isn’t bullish about what the future holds then you’re very much mistaken. This, after all, is the year that the Coventry-based company she founded and runs with her husband Michael — Newco Catering Equipment — celebrates its 10th anniversary.
Having started the business with just the two of them, the pair now employ 20 engineers, hold maintenance contracts with customers throughout the public and private sector, and run their own catering equipment training centre. Their two sons even work in the business now, making it a real family affair.
Both Michael and Janet worked for equipment manufacturer Hobart for a number of years — in fact it’s where they first met — so they have a long association with the catering equipment field. With Michael’s background as a catering equipment engineer, and Janet’s administrative and managerial skills, it was inevitable that when they decided to form their own business it would be focused on kitchen repair services.
“We saw there was a niche in the market for a local service provider,” explains Michael. “That was the key for us. When we started up 10 years ago there was very little choice and people would often just go to a large national company. Our vision was to provide a high level of local service and I think that is something that has always shone through for us.
"It is more than just fixing equipment. Yes, of course, you have got to be able to do that, but it’s offering that little bit extra to your customer to make sure they come back. There always is that little bit of scepticism when a repair man turns up, but I think that trying to be open and honest has helped us get where we are today.”
One thing that hasn’t changed over the past decade is the Waters’ policy to focus purely on the Midlands area. Michael says the aim from day one was to “saturate” the Midlands with a good quality service company specialising in all aspects of a commercial kitchen.
And, as far as the pair is concerned, there is still no reason to deviate from that. Says Janet: “For us, it has always been about having a condensed and manageable area. It means the engineers can still feel part of the company; they all call in at least twice a week to the office, so they are not out there on a limb. There is also the carbon footprint, and travelling is not pleasurable these days — the motorways are notorious.
“We are respectful that everybody has got family life, ourselves included, and so you don’t want to be travelling two or three hours just to get to your first job. Every service company promises to offer fantastic service, but we can genuinely give it to them because we are not in Carlisle one minute and down in Southampton the next, which is the norm in most companies. Everybody works within a 50-mile radius of their home.”
But surely with the client base it has built up over the past 10 years it must come under pressure to relax its geographic rules, particularly from those that want sites they operate outside of the Midlands serviced?
“It happens a lot with the hotels, but we just resist it,” insists Michael. “What you find is that their terminology of Central England goes over to Ipswich or all the way down to the borders of the M25. We just politely say, ‘thank you for the offer, but no thanks’. We can’t come away from our core model because that is when it just starts fragmenting. It doesn’t normally matter to them — they tend to just find a northern or southern supplier instead.”
Janet adds: “It goes in circles anyway. There’ll be a big switch towards national service companies and then it will swing back around to regional supply. At the moment the trend is very much with regional, which is great for us, but give it a couple of years and it’ll change again.”
One of the most significant decisions Newco has ever taken came two years ago when it opened its own training centre on site. Concerned that a shortage of engineers could stunt the company’s growth and frustrated by the lack of manufacturer-led courses available, the company created a demo facility at its Coventry HQ. The centre is now used to train new and existing engineers on both a theoretical and practical level.
“We’ve got two apprentices and have also brought in some maintenance engineers from other sectors, so it has allowed us to bring them on as catering engineers and put them through the gas portfolios as well. Yesterday, for example, we spent a day on a pressure steamer, which is a unique piece of equipment that you need training on. It is not something that you can just go and work on because it can be dangerous.”
Click on page 2 below to continue reading. [[page-break]]
Janet says the training school also gives Newco the opportunity to educate engineers on non-technical issues, such as company etiquette and customer care. Team meetings are held every 12 weeks, too, with staff encouraged to communicate any issues or suggestions.
“When you have got service engineers predominantly out there on their own it is important to communicate and ensure that they feel part of the team,” says Michael. “That camaraderie is what makes us a little bit different, I think. We even spend a lot of money on things like uniforms so that the guys look smart, and our vans are always clean. It is a big thing for us because we realise that we are almost like the grim reaper when we turn up. If the customer is spending so much money an hour they don’t want somebody scruffy in their kitchen. They are working in a kitchen environment and you need to be respectful of that, and the image is all part of that.”
The one drawback of this investment in staff skills is that it would appear to make its engineers more endearing to the competition. “We had a couple go last year to a local competitor that targeted them,” says Michael. “The way they did it was a bit underhand, but you are always going to have that. We feel there are still that many pluses for it that it hasn’t deterred us from doing it that way.”
And who can blame them? After all, Newco is budgeting to return to double-digit growth this year after using the last 12 months to reorganise the business.
“Even though we have been in a recession since 2008 we have seen a steady growth of a minimum of 15% every year,” says Janet. “Last year was a plateau year where we invested a lot in the training side and we had a little bit of a clearout, a restructure of the business, to make sure that everybody was in the right position ready for 2013. And it is working. This year we are on target for 22% growth.”
Arguably the most important investment Newco made last year was the £60,000 it spent overhauling its IT systems by implementing SAP Business One software. Major technology replacement projects are notorius for putting a strain on businesses and Janet admits Newco was no exception.
“We have done it before so we knew that it was going to be painful — and it was. But we knew we needed to do it and now that we have come out of it the other side we can think ‘right, we won’t have to do that again’. Our old system was very creaky, it was written on the old Access system which is no longer supported by Microsoft, and it was meant for just five users, so we had to take the plunge.
"The new set-up is a full asset management system and will allow us to manage a lot of customer information. If a customer is on contract then they’ll be given a unique Newco asset number so if they phone up we’ll be able to tell them exactly what they have spent on a piece of equipment or what parts have been changed on it.”
10 years on, Newco Catering Equipment looks a very different beast to the one that the Waters set up from home in 2003. But they are determined to retain the core values and principles they have always held from the start.
“The strapline for our 10 years is ‘Proud of our past and positive about our future’, because that is how we feel,” says Janet. “We are immensely proud of what we have achieved in 10 years, to develop this outfit and gain the reputation that we have got out there in the industry.”
Keeping kitchens in working order is serious business, but nobody will begrudge the Newco team from raising a glass to a decade of growth when the company celebrates that landmark milestone in September this year.
Click on page 3 below to continue reading. [[page-break]]
Newco on track to shift £1m worth of new kit this year
Although it was founded as a services company and remains best known for its repair and maintenance activities, Newco has ventured into new equipment sales in recent years.
Led by sales manager Dean Johnson, that element of the business remains a growing part of the operation and is on track to generate revenues of £1m this year.
“We are a service company and we don’t want to detract from that because that is what we enjoy, but certainly over the last three years the organic growth in new equipment has become something that we can’t turn away from,” explains company director Janet Waters. “We’ve gone from nothing to where it is now, which is quite an achievement. We’ll sell and install a piece of equipment, and we hold our own warranty, which is one of our USPs that our customers like.”
The new equipment sales that Newco does are largely on a standalone basis, as well as from its involvement in small schemes. 2013 will see the company attempt to strengthen its portfolio further by moving into light equipment.
“That should be up and running by June, and we’ll initially be looking to sell to existing customers,” reveals Janet. “It is about being able to give the customer everything, so that they won’t just think of us every time a piece of equipment breaks down — but rather whenever they need anything replacing.”
Laying down the law
Most operators have enough on their plates without having to worry about keeping track of new legislation that might affect the way they work. That’s exactly why Newco Catering Equipment believes that acting responsibly as a chosen service provider involves updating customers on any pertinent changes to rules and regulations.
“We’re pretty hot on the legislation that they need to keep up with and while we don’t aim to scare them we will keep them informed,” insists company director Michael Waters. “You’ve got things like gas interlocks and refrigeration F-Gas. From 1 January 1 2015 you can no longer work on any appliances that contain R22 gas.
"You can’t even attempt to fix them, and that is a big thing that people are only semi-aware of. It doesn’t mean they have to throw everything away on 1 January; it means that if it breaks down we can’t even attempt to repair it. We have got to let them know that is looming, so we draft newsletters for our customers and things like that,” he adds.
Compulsory CO2 emission testing is another area that Newco has had to accommodate in its services offering. “As organisations such as Gas Safe bring in legislations they quite rightly ease them in. Gas interlocks have been in 10 years-plus, but it’s only in the past eight years that they have started getting heavy on it,” says Waters.
“Now everyone is well aware of it they are enforce the regulation, which is great. It is now the same with the CO2 emissions. That has been in for around five years, but now everyone has to do it. They have brought it in slowly, which is fair, but we have to let the customers know that this is happening.”