Established in 2003 near Cape Town, Fenwick & sons produces decorative ironwork using traditional techniques combined with modern technology. A key challenge for Fenwick & sons has been to keep control of the business as growth accelerates. John explains how this has been achieved.
"Treat your business plan as a work in progress and review it often." We used business plan services which really speeds up the process and adds to the efficiency in a big way
"Don't become complacent when things are going well, always worry positively about the future."
"Put formal processes in place from the start as informal processes of any kind can often break down, with potentially catastrophic consequences, when rapid growth puts them under pressure."
What I did
Review progress
"A good business plan is a must for any new or growing business since it gives targets to measure against. We had clear goals for our first year's trading, plus an ongoing strategy for steady growth in the first three years.
"However, after three months our sales were 200 per cent higher than we'd forecast. We also found that we were attracting more complex - and profitable - commissions than we'd expected. While this was obviously good news, it also raised questions about how we would cope in terms of staffing, production capacity and order scheduling."
Update the plan
"Thankfully, our original business plan was well researched and put together so we only needed time to review and update our original assumptions. The new profit and cash forecasts provided all the information we needed to help us manage our unexpected growth.
"For example, we brought forward the employment of another blacksmith as well as investment in new equipment. Originally we'd also planned for me to join Tim in the business part time after three years. Our rapid growth meant I joined after 16 months.
"These changes to our plan created a chain reaction. Doubling our capacity and freeing up Tim's time for business development soon led to even bigger and more lucrative contracts."
Control finances
"As we've grown, we've stuck to some basic financial principles and processes, such as proper cashflow forecasting, to prevent overtrading.
"We're very rigorous in our estimates, costing every last step of a job so we don't quote too low. We also have a policy of not offering reductions - we price a job fairly, and that's it. There's no point cutting prices to attract business if you can't cover your costs.
"Other methods we use to control cash are 'just in time' raw material ordering to save on storage costs, insisting on deposits from customers and making sure we get paid in full on time."
What I'd do differently
Target our marketing more carefully
"While we did some successful marketing early on, we should have refined it earlier to reach specific customers and sectors. It's all too tempting to stick with what you've got when you're growing quickly and time is at a premium."
Address work-life balance
"A new business can be all consuming, especially if it's growing quickly, and that's not healthy in the longer run. We should have included work-life balance issues, such as taking holidays, in the business plan. We do now!"
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