When out-of-towner James Kendall took over ITM Matakana, he managed to keep the locals on side while also growing sales – all with the help of accountancy firm Hayes Knight.
As featured in Idealog Magazine September/October 2012. Download this case study.
When an out-of-towner arrived in Matakana to take over one of the area’s largest employers, there was a little wariness in the community. James Kendall purchased the service-driven ITM Matakana Building Centre which relied mostly on manual procedures.
“Financially James has been able to achieve some spectacular results, particularly in the area of margin and efficiency, inventory management and control, reducing wastage and at the same time improving customer service.”
Two and a half years later, he’s rejuvenated the business through the implementation of modern software and systems, applying his 20 years’ experience in building supply and wholesale to the trade and retail environment. And he has the townsfolk on his side. By combining his expertise with sound emotional intelligence, Kendall was able to manage people through the change, supporting those unsure of letting go of old ways while boosting staff loyalty, engagement and pride in the business.
The business has seen steady growth since Kendall and his wife Nicholle took the helm in late 2009: “It’s a strong trade business, with a lot of repeat business and it’s very service orientated. We don’t spend much on advertising – the bulk of our spend is on our customers. It’s the old saying, ‘people buy from people they know, like and trust’.”
When Kendall was looking to purchase ITM Matakana he enlisted the help of Scott Travis, business advisory director at Hayes Knight. “I believed I could do it, but at a time when the economy was at an all-time low I needed someone I could trust to help me.”
Kendall says Travis’ pragmatic approach and honest conversation has made him and Hayes Knight manager Amanda Billington trusted advisers ever since.
“They ask the right questions – not always the ones I want to hear but they do challenge my thinking.” The Hayes Knight duo gave him advice throughout the acquisition journey, from assessing the viability of the venture to assisting with due diligence and obtaining the necessary funding from the bank.
Because the previous owner had bought the business 13 years ago pretty cheap, debt hadn’t been a problem. “We were effectively buying the opportunity to put in better systems and processes.” The key was to overhaul the manual systems to create a smarter business and Hayes Knight was there to help. The team helped put in place improved accounting systems and software, particularly in the areas of inventory and cash control.
This created a solid foundation to grow the business from the ground up. “The result was increased transparency, knowing where our stock was at, knowing our margins,” says Kendall.
Today Kendall and the team meet monthly, with Travis providing the strategic direction while Billington keeps a finger on the pulse, preparing financial forecasts and cash flows to ensure they stay on the path to sustainable growth. Together they have worked on Kendall’s business plan, business valuation and designed and implemented an ownership structure in order to protect the assets.
Travis says Kendall’s ability to combine his expert knowledge of the industry with an integrity respected by his staff and community is what has set his business apart. “From our first meeting we were impressed with the level of energy James exudes. Along with his optimistic disposition, it’s infectious for everyone working with or around him.”
Travis says when Kendall arrived in Matakana he took a strong approach to building relationships: “James was quite conscious of that environment [of support for established locals], wanting to get people on side – the staff but also the community.
“Financially James has been able to achieve some spectacular results, particularly in the area of margin and efficiency, inventory management and control, reducing wastage and at the same time improving customer service.” With a 15 percent growth in sales volume Kendall is pleased with the results.
“This is substantial in such a depressed market.” He’s also earned the support of the locals, growing business with existing clients and collecting new clients along the way. A few newbies have joined the ITM Matakana team, and no staff members have left in the time Kendall has owned the business, maintaining it as a key employer in the area. He attributes his success to the financial support he has received.
“You can be a person with 100 ideas, but you’ll go bankrupt if you can’t put something on the bottom line.”
Contact us or your Hayes Knight adviser to find out how we can transform your business.