How we built a business out of recession - chapter 17 - 33⅓ percent
The story of CitNOW*
This is the 17th chapter about CitNOW, the company started from a kitchen table in Winnersh, Berkshire. If you’d like to read from the beginning, here’s a link to chpt 1. Each chapter is a 5-minute read. It’s an early draft of a book.
CitNOW was founded by Andrew Howells and Donna Barradale in 2005, although the company was only registered in 2008. In February 2018, we sold the company to Tenzing, a UK private equity company. It has been sold again since.
When we sat down for our ownership discussion, Alistair had already asked the obvious questions. How much did we want to sell, and how much would it cost him? He hadn’t expected answers to the questions there and then, but now, sitting in the hotel lobby in Milton Keynes, he certainly did. Could we find a way forward which would work well for everyone and not collapse into fruitless, protracted discussions?
I was already having an ongoing discussion with Donna about the possible expected outcomes. Alistair’s questions could also be turned around - how much money do you have, and how much of the business are you expecting? Easy to see how we could play a cat-and-mouse game, squabbling over relatively little.
I’d already established that Alistair had an education pot put aside for his children. Like us, he was not in a great position, and any potential cash he’d invested there was off-limits, or so he said. Had it already been touched before, given recent history? Surely, the untimely departure from Accident Exchange must have included some sort of negotiated settlement.
I’d smiled ruefully to myself when he’d told me about the off-limits pot. I’d loved to have had a pot too. As it was, we were only just managing to make ends meet. The only reason we’d moved to Wokingham was because of the reputation the state schools had there. And they had a Lidl. It was no different for my kids in Bristol. All our children were being state-educated because there was no other option.
These are our choices, but it’s not always comfortable when the consequences impact your children. I remember the feeling of guilt and inadequacy when my sister’s four children (she’d married a vet) were all enrolled at Bristol Grammar, a fee-paying school with a long history of academic success. What was I doing to safeguard my children’s future?
With tea and coffee on the table, the business catch-up over; it was time to try and agree on a settlement. There was more than enough evidence that having Alistair onboard could only benefit the business. It felt like there was now an opportunity to take a faster track to goal. I’d learnt a lot already trying to persuade reticent dealers on the merits of video. But having two of us in the field, selling full-time was an immediate doubling of effort, and some of those leads would come from Alistair’s existing contacts. Even though he’d left a senior management role, he was a grafter, and I had absolutely no doubt that he would immediately roll his sleeves up and get stuck in. I also enjoyed the opportunity to share experiences and bounce ideas around.
The business was also beginning to see a few easier wins amid all the rejection letters. Wherever we’d got an installation in a group, big or small, I tried to give them more of my attention than any of the independent on-offs. I was already spread thin; this was the fastest way to increase our monthly revenues.
Typically, getting a dealer who said yes to meaningful CitNOW productivity was a hard slog. This was often because I needed to become the part-time training manager, embedding in a new process. It was a process that became that much harder if I didn’t have the support of the Sales Manager, reminding his team at their weekly sales meetings or, better still, making it something they monitored on their office whiteboards along with sales and targets.
This was never a problem for CarShop (now Sytner Select), a big out-of-town car supermarket chain. Their promise and popularity are to provide the customer with competitive pricing, an impressive range to choose from and an easy, no hassle experience.
When I first turned up at their Swindon branch, it reminded me more of my early days as a McDonald’s trainee manager or when I sold Duracell batteries on the high street. Both were businesses led by well-worn processes, and I was delighted to see a similar situation at CarShop; it was engrained in their culture. It was also a hive of activity, lots of shop floor hussle with managers very much part of the sales team.
They asked me to help out with the training, which I was happy to do, especially with the promise of other branches if it went well.
The combination of non-negotiable processes and a low basic salary meant CitNOW was adopted across all their branches. Their sales teams were hungry. Once they saw the tool’s power, there was never any question about using it.
I remember being at Doncaster during its opening first few weeks and being stunned that a salesperson was doing a live CitNOW at 7:00 pm. It was fantastic and exactly what I naively thought would happen everywhere when I first started on this journey.
How about we give you a third of the company, and you don’t pay a penny?
He was stunned and more than a little surprised when I blurted out the offer.
There is no catch Alistair. You know we can’t afford to pay you much of a salary. This way, we respect your importance and contribution to the business. You’re in it on equal footing. If you want more cash, who doesn’t, then help sell us into a position where that can happen?
It was a seminal moment. A huge gamble on my part that I’d judged the situation correctly and made the right choice. I knew the well-trodden path would have been to at least exact some cash for a third of the company. But I wanted Alistair to feel precisely the same way I did. When all the shit appeared, which it would, getting in the way, preventing us from making sales, he would feel the fight was all still worth it.
Refusing to take any cash was not just a reflection of his current predicament but a statement of trust. I believed I now had his undivided attention and total commitment to making CitNOW successful.
The biggest issue I immediately had now was telling Donna what I’d done. I wasn’t looking forward to this conversation.
*CitNOW was our company’s trade name before we sold it in 2018.
This story would make a great MBA story.
Wow! Brave move!