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In business, sometimes things may get done back to front. But in FabTek’s case, this was deliberate. John McCrone hears about one way to solve a marketing problem.

Sometimes you just have to rip up the carpet to force yourself to get on with the tiling, reasons business owner Bevan Templeton, tilting back in his chair.

He runs FabTek, a Christchurch metal bender, turning sheetmetal into mounting brackets, cashboxes, trailer frames and other things. He can also do the design and product trouble-shooting for a client.

But anyway, he is at that tricky stage where his two-man business has been ticking along nicely for three years and it is time for a big step-up.

FabTek has been turning over $500,000 a year without sweat. However, it has a classic small business problem. Just two of its customers – one a government department, the other a multinational security firm – provide 70 per cent of its income.

He confesses he only set up his business because of friends at both places.

In his former life, Mr Templeton, 51, had a well-paid management job at AuCom Electronics, a maker of hi-tech controllers for electric motors.

After 10 years, he chucked it in to do a bit of travelling with his wife, Fay. Then while he was toying with what to do next, a few of his business contacts pestered him with small bespoke projects they needed.

Mr Templeton just did the design and got the jobs outsourced. But he had another friend, Geoff Chambers, a top machinist who would make a good business partner.

Mr Templeton says he sort of fell into starting up FabTek as a proper company because it suited everyone.

As often happens even in business life, the chain of events was accidental more than planned. But now what if one of his two key customers decided to move on for any reason? It would only take a change of boss or procurement policy. Every business manual says a first rule of survival is you must spread your customer risk. “You can’t afford to have all your eggs in one basket,” he says.

“In fact in the three-and-a-half years we’ve been dealing with the multinational client, it’s been restructured twice. Now that hasn’t affected our business and that’s great. But there is that awareness it could.”

He admits even the other 30 per cent of his clients are really friends in the trade.

Well, there was one guy wandering around over the break last Christmas, desperate for anyone to knock up a video shop display mounting in a hurry. But otherwise FabTek was operating without any marketing plan to drum up new business.

And the trouble, says Mr Templeton, was things really were just fine. The work was coming in. The bills were being paid.

He knew he was in a cosy rut and to spur change, he would have do something drastic. “It’s like you find at home. A job doesn’t get done and doesn’t get done. So in the end you just have to rip up the carpet. Because you know that once the carpet isn’t there, you’re going to have to get on with things.”

He laughs. This is the reality of small business ownership. He has seen it plenty with others. Knowing what you should do, and doing it, can be two different things.

So he needed more customers? His answer was to expand first as it would force him to find customers to match his increased capacity. Expansion involved bigger premises, extra staff, more machinery.

However, leasing a new industrial unit proved harder than expected. Well, he was insisting on things like a north-facing building. Working with sheetmetal is a cold business. With winter sunshine now flooding his small office, he is glad about that.

Getting machinery was easy though. Too easy. A trip to the auctions and he made an impulse buy of an old guillotine. And a secondhand pressing machine was equally quickly bought. They ended up in storage for months while he searched for premises.

But he was doing a good job of ripping up the carpet. Two part-timers were recruited. There was recabling to pay for, other kit to buy. Before he knew it, mortgage-free had become $100,000 in debt.

So by May, phase one of his plan was complete. He had moved and put himself in a thoroughly uncomfortable position.

“I certainly now have to grow the business. I’ll have to double my turnover frankly, just to get back to where I was in terms of profit.

“The lease alone, once you add on rates, insurance, the power bill – well, you’re talking about an extra $45,000 a year.”

So now what about phase two – the marketing plan? Oh dear.

He says being a business owner is really nothing like what you see on television or in the movies.

Often this is a good thing. For example, he has been bowled over by how helpful rival businesses down his road have been.

One lent him a forklift and flat-bed truck to help him while he moved in.

“It’s amazing. People often seem as concerned about the success of your business as their own.” But step outside your immediate circle and the story can be very different, mainly because you can no longer judge others on gut instinct, he says. It is easy to jump into bed with the wrong people.

And marketing was definitely stepping outside of his comfort zone.

Show him a bit of metalwork and he can judge its quality at a glance. Yet suddenly he was having to spend money on things like logos, signs, advertising, and publicity. He would not know smart advice from dumb.

In the movies, you would just pick up the phone, get a few quotes – problem solved.

However in the real world, business owners soon learn that in any area – whether it is accountants, distributors, technical writers, IT suppliers, whatever – there are the top 20 per cent who are expert at what they do, another 60 per cent who are honest but not outstanding, then the 20 per cent with whom you will burn your fingers.

Mr Templeton says this is the obvious reason so many small business owners avoid the next step – going beyond what they know and beginning to rely on others.

Larger firms can afford to plunge ahead and make mistakes in relationships. They have the size to retrench and start again.

But a small business faces too much risk. It knows that a few months going down the wrong path could put it out of the game.

Interlocking is another problem. A new location demands a new business card. A business card needs a logo. A logo needs a brand – some idea of a business’s core identity or unique selling proposition.

Help!

Mr Templeton got a business card knocked up quickly. He even thought the logo looked okay – suitably industrial with FabTek in silver foil and royal blue.

But others said the look spelt old- fashioned, even amateurish. Quite the wrong marketing message.

Mr Templeton throws up his hands. He never said he was a design guru.

So he had moved premises and was back to full production within a week. Six weeks later, he still could not put up a sign over the front door or book a Yellow Pages advertisement.

Through another friend he heard of a PR outfit which might advise. Its clients were normally hi-tech exporters, and creating a whole company persona was not its regular thing. But luckily it was one of those relationships that clicked and Mr Templeton looks like getting a package deal. It will cost him about $10,000 to find out. But already he has another logo, a better brand identity. Crisp lettering and modern colours convey the image of a smart new business ready to go places.

With this settled, he can get a sign above the door, start to advertise. The marketing plan to bring in real customers, not just friends and contacts, can get started.

FabTek’s story is a long way from concluded. He realises an image is only half the marketing story. He has to look right to get the instant confidence of people. But there also has to be some selling.

He has to create a database of target clients. Or get out and network, creating a wider circle of contacts – new friends that will bring new business.

And if the business gurus think he is doing the right things, but perhaps all back- to-front, then that is just how it often happens in a small firm. It is just a reality of business life.

Philip Lewin, chief executive of business support group Positively Wellington Business, says depending on a few key customers is a common danger for small enterprises. Many small retail outfits or jobbing operations depend on some larger client. If that customer goes, so does their business. And it can happen overnight.

Mr Lewin says a few years back, the Wellington firm Interlock, which had been making locks for windows since 1961, was bought out by a Swedish business. Rationalisation followed. The plant was closed. Several small suppliers were hurt.

However, he says much of the problem is that New Zealand simply does not have the scale for any local firm to have many customers. Unless they become exporters, their markets will always be limited.

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