Business growth is a topic which is high on the agenda for every ambitious entrepreneur, but, how do you achieve it? We were delighted to welcome Barry Park, Founder of OEM Group, an award winning and leading provider of diesel engine servicing and spare parts as the speaker at our recent Masterclass in Glasgow. In the 8 year history of the WeDO Awards, he is the only person to have won our Young Entrepreneur of the Year Award (2016) and then go on to win our High Growth Company of the Year Award the following year in November 2017.
OEM was established in 2012 and over this time, has grown employee numbers to 82 with turnover of £8 million and profit of £ 1 million with projected turnover forecast on track to grow to £12 million in 2018.
Initially, OEM started off trading in spare parts only, working on low margins between 5 & 15% and they have since developed the business to also incorporate the manpower element. The margin on manpower was 65% which Barry recognised would enable OEM to achieve considerable growth by gaining a larger share of the market and open up the business to more customers and regions.
By identifying regions where the engine services they offered were limited, mainly to offshore capability and also taking in to account current market conditions, OEM moved in to the Australian market. Through assisting customers with technical support, spare parts, stock management and supplying skilled service engineers, OEM took a hold of the marine market and developed OEM Australia.
Using the similar business model and approach they have now premises in Sharjah, Dubai and Abu Dhabi in the UAE. They have increased their profit margin through manufacturing systems in-house for the Oil and Gas market which results in a higher return in gross profit.
Recently, OEM Group has diversified and acquired Uniconn Group which consists of three business sectings, Machine Shop, Drilling tools and a state of the art Torque facility.
One of the challenging aspects of the business has been growing it through a downturn, as well as having to deal with customers increased payment terms, both of which have been challenges in terms of managing cashflow.
“The single most important thing we as a business have learnt from when we formed the company in 2012 is “cash is key”, you can’t operate without cash in the system.
We started the business with a £40,000 investment and there have been challenging times due to the limited amount of cash available to fund new projects and growth. However, we have managed to overcome this with lessons learnt now being a big factor when looking at growth and creation of new divisions.” Barry Park
In his usual candid and honest manner, Barry shared with us how he has achieved unprecedented levels of growth for OEM focusing on 7 areas:
- Leadership: building culture in line with your business plan.
- Engagement: what it takes to engage your teams to help deliver your growth plans.
- Decision-making: the art of making good decisions around people, processes and systems.
- Organic growth: reinvesting profits back into your business, identifying new markets – domestically & internationally and introducing new products & services to grow sales channels.
- Route to market strategy: focusing on the right markets, aligning with the behaviours and needs of the customers in those markets. Choosing the correct sales channels, products and value propositions
- Managing cashflow: funding sources, overcoming short-term deficits, building cash in your business.
- Acquisition: identifying your strategy to acquire target businesses.
Key lessons Barry has learnt along the way including recognising that your teams should be treated with the same levels of respect, importance and value as customers. The biggest KPI for OEM is customer service and Barry and his teams have consistently strived to ensure that their customers expectations are not just met, but where possible, exceeded.
Interestingly, rather than recruiting a Board with relevant industry experience, Barry has appointed a strategic Board and believes that this has been a significant factor in their success and growth. He recognises his strengths and areas where he needs extra support and believes that a strong Financial Director is essential, not just to monitor the balance sheet, but also cashflow.
With the onset of the downturn in the oil and gas sector, Barry took the decision to look outwith the UK for opportunities for OEM to shine and identified the Middle East as a key route to market.
Summing up, Barry’s succinct advice to the attendees was:
“If you can grow organically then do it, it can be a short-term headache but reaps considerable long-term gains. Never be at loggerheads with your Board, invest in your staff, take poignant advice when it’s given and always carry our extensive due diligence on investors – whether they’re 1 time or longer term.”
Our thanks to Barry for an excellent Masterclass and giving us so many insights into his and OEM’s success.
As always at our events, there was plenty of opportunity for attendees to ask questions and participate in discussions and lively, interesting conversations ensued. Here’s what attendees had to say about the event:
“This was my first masterclass and I got a lot from it. I was very impressed with the relaxed format but also the attitude of all those present. WeDO is like a family and I am very happy to be involved. These events facilitate the sharing of best practice and learning but also create the opportunity for effective networking and relationship building.”
“What I enjoyed most were the very inspirational stories about overcoming adversity and the natural energy of the speaker. It was great to hear from somebody who’s seen it and done is incredibly inspirational as well as motivational. Well done WeDO!!”
“This was my first attendance at masterclass event. I really enjoyed the informal and format with a small group, it meant you could talk with everyone. I particularly enjoyed hearing the inspirational stories about overcoming adversity and the natural energy of the speaker.”
“A high calibre of event all round – welcoming and inclusive. Lots of events claim to be people-orientated but WeDO Scotland walks that talk from my early experiences! What I enjoyed most was Barry’s candid and insightful account of his journey to date. Not only was it very valuable but relatable too – the ups and downs of being ambitious and determined at what you do.”
Thank you to our Masterclass sponsors Mazars & elev8byMazars for hosting us in their fantastic new Glasgow offices and for looking after us all so well.