If ever there was a good time to launch a business in the construction industry, now would be it. With the Christchurch rebuild and rising demand for Auckland residential development, the dark days of the GFC are in the past.
But for the directors of quantity surveying firm Cuesko, success wasn’t just a matter of good timing.
Founding directors Vince Baldwin, John Giles and Greg Cutfield started the company less than three years ago out of a small office on Auckland’s North Shore. The trio had previously worked together and their skills and business values were aligned, says Vince. Despite never having been involved in establishing a new consultancy before, they had built strong industry relationships and had combined experience in commercial and civil construction of 44 years.
“We always backed ourselves,” says Vince. “We set short, medium and long-term goals and our business plan outlined how we wanted to operate and be perceived in the industry. That’s been our guide since we started. We took on a few loss-leading projects in the beginning to build some brand awareness and we didn’t draw salaries for a few months.”
Their strategy worked. In its first financial year, Cuesko posted a turnover of $1.3m (this increased by 230% to $3m for the 12 months ended March 2015). Just a year after it launched, Cuesko opened a Christchurch branch, where new director Kean Mitchell manages four staff. Its Auckland office now has 11 staff working out of new premises in Albany, and Cuesko is looking to grow its recently opened Wellington office.
But before any of this could happen, the directors needed accounting advice and approached Hayes Knight Business Advisory Director, Scott Travis, for help.
“We were looking for an accounting practice large enough to provide the services we needed as a start-up but also those we’d need in the future,” explains Vince. “We didn’t just want to be a name or number to them – we wanted a more personal and local relationship. Scott immediately understood us and Hayes Knight has been such a good fit that they’re now also our personal accountants for all the directors.”
Scott and his team runs Cuesko’s monthly accounting, but Scott says advice and assistance around the ownership structure, governance, cashflow management and growth strategy were important additional services the directors required.
Early on, Scott spent time with the directors to understand their individual circumstances and put together an ownership structure that takes into account their personal lives outside Cuesko. This involved the formation of trusts and the ownership of the company by the trusts for asset protection and tax management.
“They’re responsible business owners who take a structured approach to their growth and seek advice when they need it,” says Scott. He attributes Cuesko’s success partly to the amount of time the directors put into planning up front, and then the structure of ongoing checks and balances that enables them to manage and measure their growth on a monthly basis.
Despite being less than three years old, Cuesko is in robust shape with many large clients and long-term projects on its books, including Auckland Airport, Infratil, Auckland Transport, Hobsonville Land Company, IAG, Metlifecare plus several banks and private developers.
“While we had a fairly good idea of how we were going to grow the business, we’re probably two to three years ahead of where we thought we’d be,” admits Vince. “The booming building industry is part of it, but we often work weekends to meet timeframes. We put the effort in, and we proactively look out for our clients’ interests – that’s created a lot of repeat business.”
Cuesko’s heavy investment in IT means staff nationwide can access its centralised software system, and regular video conferences allow management to discuss marketing plans, targeting clients and revenue forecasts.
“We have many processes in place to forecast resources months in advance and identify and circumvent potential challenges. As quantity surveyors, we’re used to doing a lot of forecasting and crystal-ball gazing. We’re also fairly conservative in our approach to the business and our mantra is: driving informed decisions.”
Work-life balance is a critical component of the directors’ business plan, and they’re working towards adding another layer of senior staff to manage future growth. “We haven’t set the business up to work our lives away,” jokes Vince. “Our business plan includes having fun and enjoying activities outside of work. Eventually, we’ll sell down our stake in the business to others and adopt a less hands-on, more advisory role.”
But with quantity surveyors currently on the skills-shortage list in New Zealand, recruitment has been an ongoing challenge for Cuesko.
“With our forecasting, we’re projecting turnover through to 2017 now,” comments Vince. “We have a good idea of what we’ve got on the table and how we’re meeting our revenue targets.”
Vince Baldwin knows the cyclical nature of the construction industry, and when another dip eventually comes, he feels Cuesko’s diversified project portfolio and forward planning will help industry-proof the company.
Cuesko Managing Director Vince Baldwin