This is about two young people who set up their own high-tech business — and did it their way.
Alex Eyres and Roxanna Barnard set up Sound Technologies Ltd in 2015. The business supplies and installs audio visual equipment for domestic customers and corporate clients — that includes home cinema, also sound systems. Sound Technologies also installs security systems such as intruder alarms and CCTV systems.
Although the business text books talk about the importance of making a business plan, including detail cash flow and profit projections, Alex and Roxanna did none of that.
For a start, they have never required start up finance, therefore no one asked them for a business plan. They did lots of planning, they said, but it was informal, in their heads and by discussion. They feel, in any case, that is far more realistic and useful as it takes on board what’s happening in the real world.
Roxanna says: ‘We plan as we go along, in the light of real events. That’s far more helpful.’
Market research, for example: the best market research, they say, is done when you’re out there, actually doing jobs for clients. It’s also a good way of learning about what competitors are doing.
Their start up Alex calls a ‘soft start up’ or a ‘soft take off’. It was based on Alex’s skills and experience in the field of electronics and sound engineering. They started off doing ‘labour-only’ jobs for friends and contacts, which they used also a learning platform for the other aspects of running a business.
Rather than seek a loan, or try to sell shares, they were able to finance the growth of the business out of profits from jobs. ‘It was slower that way,’ says Roxanna, ‘But far safer. It meant that we were always covered financially. We never spent more than we’d earned. It also meant we weren’t saddled with interest payments, or having to pay dividends to shareholders.’
If their route to success has been somewhat unconventional, it’s worked for them. And the other disciplines of running a successful business still apply, such a strong financial discipline — that means tight credit control and keeping a firm handle on costs.
But what about future expansion?
Alex admits that self-funding may not be always possible, if he wants to continue to grow. In that case we might try to get a loan — in which case we will definitely need a business plan. But the directors are also keen to keep the business within their control, and not to grow too much, at the risk of losing the ‘personal touch’ with customers and compromising quality.
