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20th April 2021
The ideaSpace podcast with Guy Blaskey
30th April 2021
Some entrepreneurs give the impression that turning an idea into a successful business is an easy ride. It almost never is. Guy Blaskey, founder of Pooch & Mutt, one of the fastest-growing dog food companies in the UK, spoke at our first Start- up Stories event. Here he discusses some of the lessons he’s learnt from experiencing the good, the bad and the ugly of building his business.
ONE
Building a Business is Like Training for a Marathon
Guy started his business in 2007 as a side-line. He realised, however, if he was going to make any money out of it, he needed a plan. “When you do a marathon you work out what your end date is. You know what the target is. You have a plan and you strategically build up to it. Unfortunately, a lot of people don’t take the same approach to their business and they should do. A marathon plan and a business plan are the same format. You have to be looking at, ‘what do we need to achieve in the next 3 months, 6 months, year etc.’ as opposed to ‘we want to be a £500 million company in 5 years’. People think they can do the end result without working out the steps along the way.”
Guy applied for a government funded coaching scheme which helped him work out an early business plan. “Most of the coaching revolved around an orbit template – it’s the simplest, quickest and most effective way to make a business plan. And that introduced me to the concept of knowing where you’re heading.”
Your job isn’t to sell to them, your job is to make their job easy.
TWO
Selling into Supermarkets is About Making Buyer's Lives Easy
“The big thing is understanding who your buyer is and what they want. They want you to come to them and say ‘I understand what you do, I understand what you’re looking for and I understand what your job is and I have a product that can help you do it’.
After successfully getting Pooch & Mutt products into big supermarkets, Guy helped his wife approach retailers with a consumer product. “I wrote a one-line email. It said, ‘Hi, please could you let me know what your next range review date is and what kind of products you’re looking for’. That was it. Then they came back and said, ‘We’re reviewing the products on this date and these are the kind of products we’re looking for’. And with that information, you can then go back to them at the right time, with the offer and show them what they want. It shows you’re willing to work with them. Your job isn’t to sell to them, your job is to make their job easy.”
THREE
Cash flow is One of Those Things Everyone Thinks They Understand
After a failed investment process and an unexpected court case, Guy was left without a plan. “I signed up for something called the Business Growth Programme at Cranfield University’s Business School. It’s targeted at entrepreneurs who have got to where they’ve got to with nouse and intelligence but don’t know how to do things properly. And you make your business plan in that course. It’s one of the best things I’ve ever done and easily worth the money.
I went into a cash flow lecture thinking I knew cash flow. And that one lecture changed my life, changed my business and formed the structure I’ve used for my buy out deal just by purely understanding the right levers to pull and how to pull them. Cash flow is one of those things everyone thinks they understand but they don’t really understand as much as they could do. And how powerful it is.” Guy has written blog posts about cash flow here.
FOUR
People Who Think They Know Everything are Always Going to Screw it Up. Find People Who Know More Than You
After another failed investment round, Guy turned his attention to his company structure and his team. “I spent too long with people doing what I told them to do. So I moved from that to hiring people that were better than me in their fields. The best investment that you make is the investment in the people you bring into the company. I have a management team of four now. They all do their individual jobs far better than me.
I bought in a management team and a very experienced non-exec. He showed us how to do our reporting and set up our management structure. As he said, everyone thinks they understand financial reporting and they don’t. And publicly listed companies all work a certain way, so do all large corporations. So if you want to get bought by one of those companies, you have to report how they report. For example, we’d never really had a proper budget – now we live and die by it. We changed our accounting to something called 445 accounting. It’s very simple – instead of having months, you have periods which are 4 weeks, 4 weeks, 5 weeks which add up to 52 weeks. Then you can have a management meeting on a weekly basis, you can have weekly figures and you can also budget and report on a weekly basis. We have a weekly meeting every Tuesday to go through the figures. It helps you make decisions very quickly and spot problems quickly and gets everybody working together”.
I spent too long with people doing what I told them to do. I moved to hiring people that were better than me in their fields - the best investment that you can make is the investment in the people you bring into the company.
FIVE
The Best Investment Deal isn’t Always Based on the Highest Valuation
Guy went looking for investment a third time, and this time it was successful.
“One of the really key things is, if you looked at the top line valuation of the company that I’m selling at, it’s significantly lower than I could get elsewhere in terms of the investment money. However, I’m getting money out which is allowing me to do the things that are important to me. Equally, they are putting in £2 million worth of loans which I’m getting effectively for free. And there’s no dilution in terms of my share. They also want to work with us to increase product sales. For me that’s quite important – they’re going to fund the growth of those products and the growth of the company and it gives me the opportunity to do what I want to do. I’m good at making new products and marketing new products. If I’d have gone with one of the VC funds, I’d end up spending most of my time reporting to a board. That’s not what I want to be doing.
So one of the key things for me is the alignment between the people putting the money in and what I wanted to do. I prioritise my quality of life and my staff’s quality of life over and above everything else. Now we’ve got cash in the bank and a parent company that’s supporting us. The future is looking pretty bright.”
You can find out more about Guy Blaskey here
