Mark Bolitho and Paul Smith have been working together for more than 20 years. They insist there is no magic formula for their success, just an undiluted enthusiasm and an insistence on good customer service. HVR talks to the directors of heating services firm Blue Flame
SERVICE, service, service: it was the theme to which the directors of Blue Flame (Cornwall) constantly returned during my interview with them.
Mark Bolitho and Paul Smith have driven their company for nearly 20 years, initially as partners and latterly as its directors. Moreover, they have managed to remain the best of friends in all that time, too. A rare commodity in today's business life, but they insist there is no magic formula to their successful business model, just good customer service.
Both were service engineers and part of a boiler exchange team with British Gas (BG) before embarking on their own as Blue Flame, way back in 1988. Armed with only £750 each from their BG shares, enthusiasm and the thought of making it big in Thatcher's Britain, the adventure began. Looking back, Bolitho and Smith admit they were naïve.
'We had no formal business background or training, just a huge desire to provide a rival service and to build a business on strong foundations for the long term,' says Bolitho. 'Early on we quickly realised that our forté was on the tools and not administration. Our first invoices were sent without numbers on, and this vital area of business was entrusted to our wives,' admits Smith.
Initially providing an installation and maintenance service to the domestic gas market, they began building a portfolio of regular loyal customers. What the pair realised was, at that time, few companies apart from BG offered domestic boiler maintenance contracts. Installation work is where the immediate money was, but the maintenance work, and especially service contracts, bring long-term
income, providing financial stability and an ongoing tangible asset.
'We simply looked at what BG and others were doing successfully and replicated that with a few added-value items thrown in for good measure,' adds Smith.
'There was a dilemma in the early years as to our liabilities and whether we should perhaps reinsure any losses from our service contracts with a third party. But with a total belief in our abilities and a hard work ethic we felt we could cover any worst-case scenarios, and therefore not give away a profit centre for peace of mind.
'We took a chance and it paid off,' says Bolitho.
Today, the company boasts an impressive client base from both the private and public sectors. It has a portfolio of more than 10,000 properties on its database, the majority of which subscribe to some sort of maintenance contract.
'As our business grew so did our staff. Early on, employing older, qualified engineers had mixed results, and we recognised that trying to replicate ourselves was how we were to develop and go forward into the future.
“Apprenticeships at that time were seen as costly, problematic and risky in solving recruitment problems. But we felt, if administered correctly, it would provide a win-win solution for both us as a company and the individual engineers” says Smith, who now oversees the training and development of all the apprentices within the company.
To date, Blue Flame has taken on and trained to engineer status, and more recently office and administration posts, 22 young people. Although have not all have remained within the company, it has an enviable staff retention rate more than 90%.
“We have clear and defined levels of attainment and pay structures to match, which when achieved are always honoured, ensuring a happy and contented workforce. And with promotional prospects for the long term we hope our staff make Blue Flame their career,” says Smith, smiling.
An apprentice with Blue Flame is now in an enviable position. There are 25-plus applicants each year for the posts, even though Blue Flame does not advertise the vacancies and all prospective candidates hear about the vacancies via word of mouth from its customer base.
The new apprentices are selected by an initial in-house aptitude test, interview and, finally, a work trial which “ensures we recruit the best available” says Smith.
All apprentices attend Plymouth College to complete a three-year, level three NVQ City and Guilds in gas maintenance. College is attended one day a week and the remainder of the time is spent gaining that all-important on-the-job training with an engineer.
The company has a relaxed, confident feel to it, with all staff having an understanding of their roles and customer requirements. The company’s ethos and mission statement – being the “Reassuring Choice” – is born out by their smart practical uniforms, new blue liveried fleet, and impressive new operational control centre in Penryn.
“Image counts for a lot,” says Bolitho. “It gives our customers the reassurance that Blue Flame is structured, disciplined and, above all, well organised,” he adds.
Today there are 38 staff at Blue Fame running a 24-hour, 365-day-a-year operation, which carries out in excess of 40,000 individual jobs each year. This requires an experienced team. As well as the two directors, there are managers, support staff and engineers ensuring customers get the service they require as quickly and efficiently as possible.
One of the company’s largest clients is Coastline Housing, an up-and-coming local social housing provider. Blue Flame provides service, maintenance and installation to its 2,500 properties with gas and solid-fuel heating – solid fuel being a recent addition to its portfolio. The company recently successfully secured the contract for a further 10 years.
As one of Coastline’s strategic partners, the company has delivered a gas service contract that currently sits in the top 2% of the country as a whole. It boasts a 100% access and compliancy record for its landlords gas service and safety (CP12) certification. Both organisations, says Bolitho, are rightly proud of “our ability and expertise in the social housing marketplace”, which is now coming to the fore.
“We are looking to expand our operations in those areas and build upon our success with Coastline Housing with other housing providers and landlords,” says Bolitho.
Today the company has an annual turnover of around £2M, and has a projected target of £3m for 2008. This 50% increase will be generated by further diversification into oil, electrical and the renewable energy sectors.
“All are well in place for a roll-out early in 2008, and with service and maintenance contracts to be provided additionally to these client bases, the future certainly looks rosy,” adds Bolitho.
“We are excited about all these developments, especially the renewable marketplace, which is beginning to develop now as customers become more aware. It fits comfortably into our current operations and will give our customers real choice when renewing their boilers and heating systems, with the peace of mind all our back up services offer as well.”
“It’s all part of the service,” they both say.
Timing pays a big part in Blue Flame’s ethos. The company commits all its staff to two and a half formal training days a year, plus product training in its dedicated training room, which has been sponsored by Glow-worm, also a strategic partner with Coastline Housing.
Former apprentice Duncan Impey runs the installation division. Considering it was a support service, it is now worth 35% of the company’s turnover.
Paul Smith, one of the directors of Blue Flame says: “If customers are happy with the maintenance and service we provide, when the boiler comes to the end of its life, we are invariably asked to quote. More often than not, we are given the job of fitting a replacement boiler system, which is then maintained every year into the future, which is good business.”