Setting up the Business

Where did you get the funding from to start the business?

I put together a team of 7 people plus one Angel Investor who put their own money into the business, totalling £325,000.  In addition, we were able to secure a NE investment fund loan of £200,000, bank loans from HSBC (£250,000) and various asset finance agreements.  We started the business with about £1m.  I personally had to re-mortgage my house in order to generate the funds for my investment in the business.

What help did you have in starting up the business? 

Our Landlords, the Business & Innovation centre and Sunderland City council were particularly helpful not least in providing us with a rent payment window.  The North East Enterprise Trust gave us the initial encouragement to start up and proposed a possible financial structure for the business.  As a founding group we covered most of the business skills needed so we were fairly independent from the start.

Were there any areas where you required help but were unable to find any? 

There are many organisations and individuals able to help a business start-up although finding them is the usual problem.  We were lucky that our team was sufficiently rounded that we were able to access help when needed.  When we were resource limited at certain stages we sub contracted some activities. For example our SMART award application in 2001 was successfully contracted to an experienced accountant.

How much time and money did it cost to get the business up and running?

I spent the best part of 13 months working to put the business together partly subsidised by some consultancy work.  The business plan went through numerous rounds of revision.  Negotiation with banks, investors, lawyers, accountants and various other specialities took up much of my time.  This could not have been done while I was still fully employed.

What jobs did you do before you started your own business?

After 3 years post-doctoral work, I did some time as a (fungicide) Research Chemist then went into the technical management of a team making 14C labelled compounds. After a period of applied research management I moved into business development, sales & marketing and commercial direction before taking the post of Chief Executive Officer at Onyx Scientific Ltd.  I had previously taken courses in accountancy & finance and half completed a MBA.

Did they help you?

My prior jobs had thoroughly prepared me for the role of an entrepreneur as well as in the transition to a fully fledged Chief Executive Officer.  There are few areas in the company that I do not have experience in, so I have a relatively unique perspective, I guess.

What have been the main problems that you've had to overcome?  How did you manage this?

Growing a business is not easy and requires constant vigilance.  On one occasion we had to secure some additional finance as working capital in order to see us through a low point in our finances.  It was scary starting with £1m and seeing it disappear with only a delayed income coming in to compensate.

In 2004 we nearly lost the business as our insurance brokers screwed up our business insurance.  We nearly reached the point of having no insurance therefore ceasing to trade.  Luckily we were able to find new insurers but only after some anxious weeks.

As I have made the transition from hands on entrepreneur to bona fide Chief Executive Officer, relying on others to do key jobs has been one of the most difficult things.  This is helped by extensive reading and talking to others but this lack of direct control is still one of the most frustrating aspects of my job.

Personally the main problem I have had to overcome is coping with my own accident:  In 2003 I was involved in a cycling accident.  As a triathlete, I was freewheeling on my cycle down a hill when a car pulled out immediately in front of me. Not able to stop, I ploughed into the side of the car and secured 20 broken bones, collapsed lung, brain haemorrhage and a spinal cord injury at T5.  The latter means that I'll never walk again.  During the year that I was in hospital for 4 months the company made a big loss, apart from year 1, the only year we have not shown a healthy profit.  Returning to work was difficult as I was initially only able to do 2 hours per day maximum.  Gradually however as my health improved I was able to take on more and more responsibilities and eventually returned to full control of the business.  Only 18% of people with spinal cord injuries ever return to work so but I am pleased to be in the minority!

Do you think working in industry gave you an advantage when starting up the business? 

Absolutely.  Those with only academic experience are at such a disadvantage.

How has the company grown?

We have grown organically by reinvesting all of our profits.  We have now made capital expenditures in excess of £2.5m. In the first 3 years my business development experience was crucial in generating new customers and I developed about 60 loyal blue-chip customers in this period.  We turned over ~£240k in our first year and have increased it each year ever since.  Currently we expect to turn over £3.75million in our financial year that ends this month.

After the initial services we offered we have met market needs for new services such as larger scale manufacturing and stability studies.  Our growth therefore has been a combination of organic growth in core services plus new add-on services.