The following is an example of some of the media coverage SMC Solar Ltd has received recently.
Over the past twelve months SMC has gone from a one-man band to a successful firm with clients across the midlands and south of England. Its founder Steve Munday sees no sign of business slowing down.
SMC is located near Faringdon in West Oxfordshire but you will sometimes see vans travelling further afield – as far as Nottinghamshire, East Anglia, across the Home Counties and out to the Welsh borders.
The company was formed fourteen years ago under a completely different guise as a management consultancy working mainly in the railway sector. At that time, Steve Munday built his company from scratch to £2m turnover and fifty employees in three years before the tragic rail accidents at Hatfield and Potters Bar precipitated a complete reshaping of the industry and the demise of small consultancies such as SMC. The company needed a new direction and after a few years of relative inactivity it re-emerged and became an NICEIC Approved Contractor in 2007, working in the domestic, commercial and industrial sectors.
“I chose the NICEIC over the other regulatory bodies because it seemed to be more tuned-in to marketing the importance of using regulated and qualified electricians for all electrical work. It has a reputation for being the most difficult and demanding to gain entry but I saw this as a mark of its quality rather than a barrier to entry,” explains Steve.
However, it was the explosion of the photovoltaic solar panel market, following the government’s introduction of Feed-in-Tariffs in April 2010, which was the catalyst for SMC’s huge business growth.
In many respects, SMC was no different to the hundreds of other electrical contractors who saw the emerging business opportunity and invested in the necessary training and accreditation process to become a MCS accredited solar panel installer. But, it was Steve’s wider management skills that enabled SMC to grow more rapidly than many of its competitors.
Steve was a senior general manager in British Rail back in the 1980’s, moving into a succession of director level appointments in major international consultancies before redundancy led to the formation of his own consultancy company in 1997. He admits this makes him “a little bit different from the average electrical contractor”.
“Running a successful business requires a multitude of skills including sales and marketing, project management, procurement management, supply chain management, business management and most importantly, human resource management. If you haven’t got good people around you and don’t know how to motivate them then you are disadvantaged right from the start,” he admits.
“Some people will tell you that business success is all about sales and marketing, others will say it is quality of customer care and service, and others might say that managing the cash is most important. The truth is that every aspect of running this business is equally important and you have to get it all right all of the time.”
In many respects this new sector is devoid of the risk and problems that kills off so many rapidly growing businesses: managing the cash flow. The majority of this sector has the comfort of working with little or no credit. Suppliers demand cash in advance and customers expect to pay substantial deposits up-front. But Steve says that supply chain management is as important as the quality of work on site. He recalls the adage from his rail-sector days that “it takes ten perfect journeys to make a customer forget one bad journey”.
“SMC has several suppliers of equipment and services and plays them off against each other to keep them on their toes, to ensure good service and prices. If I get poor service, late delivery or any other problems then it is easy to switch suppliers. They need to understand that and raise their game.”
“The most irritating and costly problems arise when deliveries fail and I have already got manpower on site. But more annoying is the discourtesy of some major wholesalers who brush this aside as ‘just one of those things’. This is one of the reasons I now use Krannich for nearly all my supplies of PV panels, inverters and mounting systems. Krannick keeps excellent stock levels, competitive pricing, better-than-average credit facilities and most importantly has good customer care. It is the same with scaffolding. CK Scaffolding of Swindon is currently SMC’s preferred supplier but, as with everything else, they have to keep up the expected quality and at competitive rates to retain SMC’s lucrative contract.”
It is perhaps a consequence of Steve’s time in the public sector that his attitude to staff development and training is slightly unusual for the contracting sector. All his electricians and apprentices spend time in the office doing design, resource planning, and general business management, while all office-based workers get hands-on experience of installation. “It gives me huge flexibility to iron out the peaks and troughs of work. It also enables me to sit back completely at times and empower the employees to get on with running the whole business without me necessarily being there. This is essential if I am to spend time developing the larger business opportunities.”
SMC started small in the PV market like many other new-entrants to the sector but has seen rapid growth. Currently, it has fifteen 50kW farm projects, three schools, five churches and one airport, all in various stages of development. There is, of course, a much longer gestation period for the larger projects with the planning process and G59 application process taking as much as 3-months to complete.
SMC supports its clients throughout, offering turnkey solutions from planning design drawings through to commissioning. SMC also works with a financing partner, Agerenergy Ltd, in arranging funding for farmers and other commercial clients who want the free electricity of a 50kW scheme but do not necessarily have the funds to invest.
With a business in such rapid growth it is difficult to predict the end-of-year turnover. Will the market plateau in the winter? Will it die when the Feed-in-Tariffs decrease from next April? Steve thinks not: “I think it will grow and grow, and I will position SMC to be amongst the best of the installers when it comes to quality of service and value for money. Having said that, I will not turn my back on more routine electrical contracting work. You never know when a quote for a solar job will reveal an overdue inspection and open a door to another opportunity. Nor am I averse to trying to sell solar panels to someone who may have simply called me out to change a light fitting. I’m a businessman and a salesman: I don’t like to miss an opportunity”, he said with a slight glint in his eye.
“For me personally, I get my buzz out of developing a business and delivering exceptionally good value to my clients. As the business grows I will inevitably have to let go of most of the day-to-day tasks and employ others to do them. But I am not the retiring type: I will probably wish to continue as an ambassador (glorified salesman) with whatever job title suits the role at the time.”