John Davidson, founder and managing director of gas-elec, a company that provides gas and electrical safety checks, boiler services, smoke and cos and legionella testing for over 80,000 UK properties, is a mechanical and electrical entrepreneur
When you first thought about starting your own business, did franchising spring to mind? As the top 10 franchises in Europe and the USA are dominated by fast/convenience food companies and you’re reading this magazine, chances are you didn’t.
It’s possible you might have heard ‘franchising’ and ‘heating and ventilation’ mentioned in the same sentence if you watched last year’s The Apprentice. The winner, Joseph Valente, wanted to create a nationwide heating and plumbing franchise, competing with the largest franchisor in the industry, gas-elec, which happens to be my company.
In the end Lord Sugar persuaded him to take a different route, which is a shame, because not only is competition good for every industry, it would have given publicity to an alternative method of making money that plays to every mechanical and electrical and heating and ventilation engineer’s strengths.
As a former M&E engineer, I know that being excellent at what you’re trained to do is only half the story. If you’re a sole trader or small business, you also have to be a great marketer. Larger companies can afford to engage specialist support to keep their brand visible and the new business pipeline filled, which leaves engineers free to do what they do best - design, install and maintain heating systems.
However, as 95 per cent of all UK businesses are micro businesses employing zero-nine people, most M&E and H&V engineers have to do the marketing themselves and that’s usually relegated to whenever there’s some spare time.
So evenings and weekends are often lost to covering the basics, like ensuring an on and offline presence in the relevant directories - and that’s once you’ve taken care of the invoicing, of course.
You may have extraordinarily good testimonials, and word-of-mouth is one of the best marketing tools any company can ever have, but it too needs to be managed if you want to realise its potential. So it’s tough if you’re a busy engineer and even tougher if marketing isn’t your thing.
That’s why, over 20 years ago, I saw the business opportunity in creating a franchising organisation that would minimise marketing headaches, increase opportunities to earn good money with realistic profit margins and make a positive difference to the work/life balance.
For those of you who don’t know about franchising and, specifically, about being a franchisee, here’s how it works in a nutshell - you have all the freedom of self-employment, with the structure and convenience of a ready-made support system, working in an industry where there is a proven track record of success.
While all franchisors have their own way of operating in terms of training, advertising, workwear, sales areas, etc, some, like gas-elec, supply the business leads, issue invoices, collect payment and put in place credit control procedures on your behalf too.
While there’s a scale of income you can expect to achieve with gas-elec, it can be surpassed as there is a direct correlation between what you earn and the energy you invest in your business.
Also, a constrained supply of social housing has led to the exponential growth of the private rented sector, which will continue to provide an opportunity for you to grow your franchise business rapidly.
Franchisees will have to invest around £23,000 initially to cover the franchise, operate the business in a geographical area and costs of training, liveried lease vehicle, uniform, tools and equipment.
New business and work flow is generated through the 15 gas-elec regional offices, while the company bureau takes care of all invoicing, payment collection and credit control from its head office in West Drayton.
From 2018 it will be illegal to let a property that has an EPC rating below E. This increased pressure on compliance will continue to fuel gas-elec’s franchise business.
gas-elec has a team of people supporting its franchisees, including the bureau facility, IT experts, electrical and gas trainers and auditors. In addition, administrators work is provided for the engineers, meaning they are free to use their skills and get on with what they’re good at.