Amid ongoing signs of an economic recovery, many businesses which previously held off from investing in their workplace are now spending once more.
And, fortunately for Alex Adamson, the main beneficiaries are those firms specialising in office and commercial space design and fit out.
His business, AA Office Group, has established itself as a major force in Yorkshire since he launched it as a sole trade 10 years ago.
The Harrogate based business has secured a wildly varied range of clients due to its ability to provide bespoke and creative solutions.
These include a £100,000 refurbishment contract at Bowcliffe Hall (see page 34) in the company’s earliest incarnation through to more recent work for Ski Club of Great Britain and air traffic control at Gatwick airport.
Although the company may be competing against the likes of Ikea, it sees its mark of quality as a true alternative, with more and more growing SMEs beginning to see their office environment as a priority when it comes to cost effective capital expenditure.
And fast emerging as a much better way of impressing clients are decent and comfortable seats in receptions and for staff, than shiny sports cars with personalised number plates parked at the entrance.
Adamson says: “People are starting to see an office as an extension of their home and somewhere that they now want to spend a little bit more time. In the past people wanted cheap chairs, whereas now they are plumping for things like Italian designer leather chairs or ergonomic, high concept design seating.
“Having the right chair can improve productively massively and avoid staff developing bad backs. A lot of bosses are happy to spend £25,000 on a new Merc then get a cheap chair from the high street knowing they will be sitting in it up to nine hours a day.”
Alex has come a long way since launching the business, with the 36-year-old recently included in the top 42 UK entrepreneurs under the age of 42 in a trade publication and just missing out on coming face to face with Alan Sugar on The Apprentice following a gruelling selection process for the show.
He says: “Trying to get on The Apprentice was very difficult. Out of 20,000, I got down to the last 20. I didn’t know how close I’d got until the show came out and out of the 20 all of them were on the show apart from about five, including me. I was a bit gutted, especially as it was the year that the fruit and vegetable seller from Manchester won it.”
Prior to his entrepreneurial success, Adamson’s CV has taken in work in Australia’s telecoms sector, the UK motor trade and the recruitment industry. After building up confidence through some large scale maintenance projects as part of a removals role at Barclay’s call centre, he decided to set up his own removals business and seized the opportunity to grow online at a time when many tradesmen were still relying on printed classifieds.
He said: “People were still using the old Yellow pages door step book, but I was able to get on Yell.com under removals and maintenance and got quite a lot of work from that at a time when all the big firms weren’t really investing in online.
“It was only removals and maintenance at first but then we started being asked whether we could do things like partitioning and fix ceilings. We were like that for about five years.”
His big break came when he began subcontracting more technical refurbishment work out to business contact Marcus Naylor, who was working as a project director for a £3m turnover refit company in Huddersfield.
The firm quickly started to grow its annual sales from around £60,000 to a couple of hundred thousand, with Adamson and Marcus complementing each other’s skill sets.
“I said to Marcus that if he ever wanted to join us the door was open,” he says. “So when the recession hit he rang me and asked whether the offer still stood. He has now been with us for four years and during that time things have really started to take off.”
The firm is aiming to double its turnover to £1m this year, with its already impressive
online sales set to benefit further from a significant investment in its e-commerce systems and website.
The company’s white boards are certainly an indicator of its current health, with lists of contract wins leaving little room to doodle. However, the picture was very different a
year and a half ago. “Those boards are full and busy, but 18 months ago they weren’t like that," says Adamson. “We’re good at what we do and have a lot of good developer clients with a bit of money to spend, but during the recession they weren’t spending because there was no point finishing off a building if you didn’t think you were going to get a tenant. I would really say that in the last six months the market has completely transformed. We are around three times as busy as we were.”
The company survived the recession with a mix of competitive pricing and a solid online presence. And it is now seeing an increase in more luxurious office schemes, which allow its team to be more creative in its approach.
“People are spending a little bit more than they were two years ago, when they were happy with just white walls, cheap carpets and grey desks. Now people are looking at their image, they want to impress the client and one way of doing that is having a nice design led office which creates an environment that motivates your staff.
“A lot of the quirkier contracts seem to come from London, where things like games rooms have become the norm for many businesses. A lot of people are going for pool tables, and a bit of a break out bar area. I’m not saying they are serving lager on tap, but they might have a beer fridge. It is going a little more Americanised and the work place is merging into a bit of a home away from home.”
So what does the near future have in store for the company? In addition to handling more residential contracts, the firm is currently looking to extend its reach to overseas markets as well as take on more work from the education sector.
Adamson says: “A lot of countries overseas still appreciate British made products. For example the Chinese are demanding more access to British fashion from the likes of Burberry. These consumers are happy to spend a lot of money and I think there is an opportunity for us to sell our products within these growth markets. A classic example is Yorkshire Tea sending tea back to China.
“I also see education as another potential area for growth and we are currently making inroads with a number of schools and colleges. The office furniture market is worth £650m a year in the UK alone and I want a bigger chunk of that. Schools are spending all the time and now want to invest in quality rather than have cheap furniture hammered by their students.”
The office furniture market is indeed huge, with figures from analysts at AMA Research showing that in 2012 desking alone was worth an estimated £273m and accounted for 42% of the market, while seating reached £208m or 32% of the market, with sales of storage products totalling £117m or 18% of the market. Furthermore, the figures indicate that in the medium to long term the UK office furniture market is expected to show a recovery from recent declines, with annual growth rates of 3-4% from 2014 onwards.
The market is forecast to reach £760m by 2017, compared to the estimated level of £650m achieved in 2012.
To tap into this growing market, Adamson is sticking to his policy of “quality first” as a cornerstone of the business, which he believes will help to separate it from of the market’s biggest players which he thinks are more concerned with low cost.
“A lot of people won’t learn,” he says. “They get a chair for £30 to £40 then wonder why they have got a bad back.
“People feel like they are wasting money when they buy more expensive chairs, but it’s a false economy.”
With the company now in the throes of a rapid growth spurt, his message seems to be getting through in this region at least - which can only be a good thing for the leaders that form the backbone of the Yorkshire economy.