My interviewee is Michele Gonthier, a successful Penarth business women who runs an impressive portfolio of businesses. Michele is Managing Partner at Strandz Hair and Beauty, Financial Director at Emile’s Penarth Limited, Managing Director at MG Gases (Cardiff) Ltd and Financial Director at MG Properties.
What business(es) do you currently own and run?
The oldest business is MG Gases (Cardiff) Ltd; we started trading in 1984 so it’s a long established business based in Leckwith, Cardiff. The business distributes LP gases and industrial gases. For industrial gases we have a customer base from health authorities to blue chip companies to Mrs Jones who lives round the corner.
MG Properties has been in existence since 1998; we first bought an industrial area in Leckwith and Cardiff and from there the property business itself has escalated and includes the two premises from which we trade in Penarth. Strandz Hair and Beauty and Emile’s.
In 2005 we bought an existing business that had traded for 35 years which was called Alans the hair salon and then Strandz evolved from that.
And we opened our most recent business, Emile’s Café, in December 2011.
I understand you’re a management accountant; when did you study for that qualification?
I took those qualifications in 1985 not long after starting our first business. Having come from a good secretarial background and with four small children it was very hard to go back into full time education. So management accounting suited us for running our business.
What sort of work did you do before you started running your own business(es) and what made you decide to go down that route?
I was a PA for a Director of a very large Cardiff based transport company; I worked there for many years.
I had a varied work background; having brought up four small children I always worked mostly in office based businesses and my mother in law always helped us out with the childcare.
We lived for a while in the Arabian Gulf and I was PA for a flour importer.
How did you start out; get to where you are now?
My husband worked as an officer in the Merchant Navy and we had our fourth child and he wanted to work nearer to home.
My husband knew someone who had a small gas business for sale and he wanted to buy it. He came to me and said he wanted to buy the business but he couldn’t do it without me. Which meant us both giving up full time paid employment.
I don’t like to describe what we did as entrepreneurial. The word entrepreneur doesn’t sit well with me because I’m not a risk taker. I think people who have those tendencies are bigger risk takers.
When we first started we self-financed; we self-financed for the first two years. Until we won a big contract with Ford in Bridgend. The terms of the invoicing agreement with the customer meant we couldn’t self-finance any longer. The first time we went to the bank and asked for an overdraft, my husband sent me; my husband didn’t want to hear the word no from the bank manager. The bank manager sat back in his chair and said “I was wondering when you were going to come to me; I don’t know many people who self-finance”.
We didn’t take a risk and every step was calculated with protection built into it. That’s how our businesses have evolved.
We were tenants on the site in Leckwith for many years until the owner at that time got into difficulties with his bank. The bank offered tenants certain parts of the site. We ended up buying 30 acres and it worked out better for us; we took out a bank mortgage and paid half in monthly mortgage repayments compared to what we had been paying in rent. We took on tenants too. So that was a very good move. Very worrying at the time; a lot of money to borrow for a family with small children. It’s worked out very well.
What are the particular challenges people who’ve trained as finance professionals face in running a business; (ie are they too risk averse)?
I think some can be too risk averse. I think today there’s far more help and guidance so therefore you can bounce off ideas with people. When we started there wasn’t really anyone. You had your bank manager you actually sat face to face with and you engaged an accountant.
Our tax affairs and submissions are all done by a firm in Cardiff recommended to us by our bank manager. You need more professional advice; our businesses grew fast and the businesses are all diverse so they can’t be used as a benchmark for each other as they are all completely different. It’s nice to have someone more professional who can analyse the management accounts and give you an overview.
What’s been the biggest challenge in your career?
Keeping abreast of legislation and changes because that happens all the time.
Employing people is quite often a minefield and come every April the laws change and you’ve got to keep up with them. From my point of view human resources, man management is the most challenging bit.
What’s the biggest day to day challenge you face?
Getting out of bed in the morning!
I don’t think we’ve got great day to day challenges because we’ve got nice people working for us; everybody knows what they should be doing and when it should be done.
We don’t really have challenges like that at this moment in time.
What do you think is the key to running a sustainable business?
I know a lot of people who like me have one or two businesses but they’ve over traded; it’s easy to overtrade and think I’ll have that bit of business and that bit; not analysing the margins and the logistics of things.
Especially with the distribution business; we don’t want to go all the way to Carmarthen when we could make two deliveries in Cardiff and the revenue would be greater.
Those sort of things take time analysing; the costs, overheads and revenues.
How do you balance off offering flexibility and satisfaction to employees wanting work life balance whilst keeping an eye on the bottom line?
From my point of view, having been a working mother, I’m probably more understanding than most of the needs especially of working mums and young dads; they’ve got to get home and you can’t expect them to work late.
I work late on paperwork at home till 10 – 11 o’clock at night; I wouldn’t expect anybody who works for me to do that.
You’ve got to be able to talk; communication is important. If somebody isn’t coming into work, why aren’t they coming into work. It might be childcare; for example, the mother in law might not have the children till midday. So we could look at shifting things around so it can work.
Pay has to be right; you have to pay employees according to employees’ rights. I think that’s another thing about people like me and self-employment; they don’t always understand the rights of the employee. There is a minimum wage, there are statutory holidays; these are the minimum you can give people. I think that’s where you can get into difficulties.
I think you’ve got to have an open door style of management; if there’s something an employee needs to ask or has a problem, they’ll come to speak to me because they know I’ll listen.
What advice would you give to someone wanting to set up a business today; how should they go about making it happen?
I’d recommend that they go to somebody in management accounting first; put their ideas on paper. I don’t think just doing a cash flow forecast is any good; by the time you’ve achieved some sales, everything is historical. You really need to do your homework.
One key belief I’ve had is that the money that comes into the business comes into the business; my husband and I don’t ever look at it as our personal earnings. We’ve always taken set salaries and we live within that. A business needs to be propped up and if you look at it the wrong way, which a lot of people do, before you know it you’re in debt. So plan and take proper advice.
It’s worth taking time out each week to do your paper work; even if you’re a one man band.
I’m the first to say I’m a bad payer; I leave it to the last minute. In that way you control your money.
What’s your favourite business book and why?
My favourite business book is one I read many years ago; Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher, William Ury and and Bruce Patton. It’s about being in business, being face to face with the customer, communicating with them and getting to yes.
What’s the best training you’ve ever done and what was good about it?
Barclays SME business workshops where you meet like-minded people from start-ups, small and large businesses; you can bounce ideas off of each other and practice role plays. You can talk about problems and what’s worked for each other.
Do you have and how do you maintain work life balance?
Get up every morning and go to work. I don’t work at all at weekends.
My husband and I shared an office for 20 years. For many years at work some of our customers and clients didn’t ever realise we were husband and wife. We kept it mostly business and when we got home in the evening just shut off from work. We might discuss several things over the first cup of tea but after that it’s cut off.
And even with the invention of texts, if a text comes through and it’s business, I’ll ignore it till the morning. I just feel you have to for your sanity.
I never take a problem to bed with me; it either gets resolved or gets put out of the way.
We can all be too blinkered then into thinking we have to do this or that and you’ve driven yourself into an early grave. Working for yourself is rewarding and can be very stressful.
Having four children was one of the best things for us; when I got home and walked through the door at tea time I was mum again.
You must turn off and take holidays.
What are the key challenges you think people have in working in the UK today?
I think we have huge challenges. One of the downfalls in this country at the moment is that small businesses are being ignored. We’re losing small businesses off our high street. People are a little bit reluctant to go into business on their own; there’s not a great deal of support. Small businesses are more accountable than large businesses to some extent; small businesses can’t rebrand every couple of years because it’s a tax dodge. Small businesses need the money to keep the business surviving.
I think the taxation system on companies is wrong; the PAYE system is wrong. Small employers should have a tiered system. VAT is too high; there’s 20% on a cup of tea which is ludicrous.
What’s been the best piece of business / career advice you’ve ever been given?
Keep good accurate records from the word go whether you’re VAT registered or not; traceability is the most important thing.
For example with the MG Gases (Cardiff) Ltd business in about 2003 we had a scheduled VAT visit and two inspectors came (you always worry when there are two inspectors) and they went through all our records and they couldn’t get the purchases to balance with our figures from Sage. They said they’d go away and let me think about it; I went home and was wracking my brains and I suddenly realised it was credit notes that hadn’t been included. One inspector came back for me to explain and they said they were very happy with our systems and would use us as a benchmark for similar companies in the UK. My experiences with HMRC have always been good.