Home Fresh Air. Anywhere. Airflo Envirorental Ltd Bank Street Doncaster South Yorkshire DN1 3RB Sitemap Terms & Conditions Privacy Policy Tel. 01302 730000 Email hiredesk@airflorental.co.uk Registered in England and Wales No 10684950 Registered office: Prospect House, 4 Old Station Close, Shepshed, Loughborough, Leicestershire LE12 9NJ Copyright ©  2018 Airflo Envirorental Ltd
Home About Particulate Matter Products Contact
Supplier ID: 5834 Registration Number: 51086 Registration Number: 245289 business plan business plan

BUSINESS PLAN

FOR

AIRFLO ENVIRORENTAL LTD

February 2017


Fresh Air. Anywhwere.

Protecting workers’ health and improving productivity

with on-demand air quality solutions



EXECUTIVE SUMMARY

The purpose of this business plan is to identify key strengths in a weakening business with a view to consolidating resource, redefining the business model and driving it to good and growing health.

Since 1972, the business has been operating in the climate control market, working with specific industries to protect workers and increase productivity in unhealthy working environments.

Fuelled by current legislation and an increasing awareness of responsibilities towards occupational health and hygiene in a litigious age, we are re-igniting a vision in a growing market.

Our strength is our market experience and our expertise in product application, which means that we offer simple and economical solutions that meet the current needs.

Airflo is a strong brand; for many years, Airflo was one of the innovators and leaders in the climate control market and our opportunity to grow the business and regain market share is now.

Our whole object and motivation is summed up in our strapline: "Fresh Air. Anywhere."


KEY METRICS

Last year the company produced GP 84% and NP 26%

So far this year we are running at GP 72% and NP 28%

 

CONTENTS

WHO WE ARE

VISION AND VALUES

WHERE WE'VE COME FROM

THE SITUATION TODAY

LOOKING AHEAD

STRATEGIC PRIORITIES

MAKING IT HAPPEN

NEXT STEPS

PROFIT & LOSS STATEMENTS

CASHFLOW FORECASTS

HIRE FLEET UTILISATION FORECAST


WHO WE ARE

Airflo Envirorental is a rental service provider whose focus is on protecting workers' health and improving productivity in the workplace.

We specialise in mobile equipment for ventilation, dust and fume extraction and filtration, climate control and moisture control. We serve a diverse customer base across a wide range of industries.


WHAT WE DO BEST

We add value to projects by providing rental solutions to our customers, taking away the burden of investment and maintenance and enabling them to focus on what they do best.


VISION

No 1 vision is to excel in customer service. It is the complete customer experience; not something we can say, only what our customers can tell us.

No 2 vision is to position ourselves as an authority in our field, to be known, liked and trusted as a valued contributor to industry, working in line with current regulations to promote and maintain workers' health and productivity in the workplace.


VALUES

We are governed by four simple core values which embrace and endorse our fundamental guiding principles of honesty, integrity, openness and teamwork.

  1. Show respect
  2. Listen to understand
  3. Go the extra mile
  4. Love life


WHERE WE'VE COME FROM

HISTORY AND DEVELOPMENT

Airflo Envirorental is a specialist division of a larger equipment rental company established in 1972, specialising in industrial ventilation, dust & fume extraction and filtration, temporary climate control and moisture control equipment to a diverse customer base across a wide range of industries. The parent company was sold in 2012, leaving this reduced and somewhat neglected division to be picked up and developed.

The years have seen shifts according to market trends and government regulations. For example, the early years concentrated heavily on building drying, especially in and around central London. Then a shift away from mechanical to natural drying meant we were challenged to find a new market.

We had a sustained period where small mobile air conditioner hire was the back-bone of the business. We were heavily dependent on companies like Royal Mail who hired large quantities of air conditioners each year (200-300) for many floors of many offices around London. Consolidation and investment in facilities and improvement in air conditioning, combined with the introduction of cheap imported goods has eroded this market almost entirely.

We have had success with large package air conditioners, especially in food production where high temperatures have affected the manufacturing process. Also in high temperature maintenance situations, for example working alongside kilns and furnaces. This continues to be a source of revenue with scope for expansion in line with our non-seasonal strategy.

We have always offered heating equipment, largely oil and gas fired equipment when we had a maintenance team qualified to repair and maintain them. There is still scope here in the events market and to some extent in industry, but we haven't got the infrastructure to service it at the moment. Electric heating has been a good source of revenue in both seasonal and non-seasonal application and continues to provide scope for growth.

Ventilation and extraction fans have been a growth area over the years, largely for dust and fume extraction and for ventilating tunnels and confined spaces. Some of the applications have been seasonal but the tightening health and safety regulations in industry and the increasing awareness of the dangers of airborne dusts and irritants indicate this is potentially a continuing growth area.

Other products have developed alongside our core range, for example, refrigerant recovery pumps. Demand for these grew as regulations for CFC refrigerant gases tightened and replacement deadlines were set. The market was flooded with small and cheap units but we held on to the business for the high volume liquid pumps which were out of reach to all but the largest contractors. Demand is now reduced but they are low maintenance and lucrative.

At one time, we had a large fleet of heavy duty, high capacity vacuum cleaners but demand dwindled over time as contractors and maintenance departments equipped themselves with machines. Many years later, we are now seeing increasing demand for vacuum cleaners on construction sites as sweeping restrictions are put into place due to health and safety regulations.



TYPICAL PROJECTS - CURRENT AND HISTORIC

Doosan Babcock, Eggborough Power Station, Selby

Package air conditioning and ventilation fans to cool maintenance crews working near furnaces

Kingsbury Press, Doncaster

Package air conditioner to help maintain ink stability during summer

Totley Tunnel, Dore

Tunnel ventilation package comprising high capacity centrifugal fans with generators to power them, mounted on rail wagons

Elizabeth Tower (Big Ben), Westminster

Heating equipment on each scaffolding level for worker comfort during external building maintenance

Windsor Castle fire damage restoration, Windsor

Ventilation fans to assist the dry-out process of old timbers and materials following fire damage

Glaxo SmithKline research centre, Welwyn

Heating equipment for worker comfort during construction

Animal research centre, Milton Keynes

Package heating unit to maintain required temperature range during internal fit-out

Mercury Communications, Borehamwood

Package air conditioning unit to cool head office building during summer

Bass Brewers, Burton

Package air conditioners cooling central server suite during M&E maintenance programme

Fox's Biscuits, Batley

Package air conditioners mounted on roof providing chilled air to stabilise chocolate biscuit production line

Siemens Gas Turbine Power Station, Immingham

 Package heating equipment

Eggborough Power Station, Selby

 Large ventilation solution for dead-space ventilation

British Steel, Scunthorpe

 Heavy duty vacuum cleaning equipment and oil-fired heaters


THE SITUATION TODAY

MARKET ACTIVITY AND PROJECTIONS

  1. Recent acquisitions are boosting market confidence.
  2. UK plant hire market grew 5% in 2015, 3% in 2016 and further growth of 9% is forecast up to 2020.
  3. Total equipment rental market is currently valued at £5.8bn of which construction accounts for 60%.
  4. 4,000 hire businesses employing 34,000 people.
  5. Many hire companies investing in their fleets due to recovery in hire demand throughout 2014/15.
  6. The event rental equipment market is worth £560million and forecast to grow 23% over the next 5 years.
  7. Office construction across central London is at an 8 year high and is now turning towards refurbishment rather than new build.


OUR CUSTOMERS

Our customers work in environments that are potentially detrimental to productivity and health. This can be due to dust and/or fumes above OEL, excessive temperatures or oxygen deprivation.

Typically, our customers work in construction, engineering, food processing and healthcare. However, any working environment where either human or process productivity is at risk becomes our opportunity.

Non-competitive hire companies, typically the smaller independent companies, also draw on our service and expertise to add value to their own service. This is beneficial to us as it is a ready-made avenue into industry and although it is reduced margin it can be a reduced risk.


OUR COMPETITORS

Our competitors are typically the national hire groups, for example, A Plant, HSS, Speedy, as they tend to have a diversity of equipment that encompasses what we specialise in. Recently we have seen a number of acquisitions of smaller, more specialist companies which are now being operated as specialist divisions of these larger groups.

No single hire company has a significant market share - A Plant is the largest UK hire group and only has 6% market share, even following acquisitions over recent months.

There are a number of specialist independent ventilation equipment rental companies which also work to our advantage as they are demonstrating the need for specialist attention being paid to important health & safety issues.

We also see the larger industrial equipment groups as competition, for example, Cromwell Tools, as they are providing affordable imported equipment into industry, some of which overlaps with the equipment we hire.


OUR SUPPLIERS

We have two tiers of suppliers:

  1. New equipment suppliers
  1. Firstly, we buy established brands from the manufacturers
  2. Secondly, we buy established brands from distributors
  3. Thirdly, we buy non-established brands from distributors
  1. Cross-hire partners
  1. We hire equipment from other hire companies to re-hire to our customers, which means that we have a scalable hire fleet to match demand


SWOT ANALYSIS

STRENGTHS

  1. Expertise in product application
  2. Heavily underutilised assets
  3. Established brand

WEAKNESSES

  1. Low turnover
  2. No capital
  3. Ageing hire fleet

OPPORTUNITIES

  1. Fleet renewal
  2. Changing health & safety regulations and training programmes
  3. Brexit
  4. Shift to refurbishment in construction

THREATS

  1. Changes in government regulations
  2. Shift in pollutant classifications
  3. Bad debts


STAFFING AND OPERATIONS

The current owner works full time and draws in part-time labour as required to maintain the equipment and support the business effort.

Deliveries are usually made by carriers or transport contractors.


FACILITIES

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxx



LOOKING AHEAD

INNOVATION AND PROGRESS

We are constantly on the lookout for new equipment, new ideas and new ways of doing things. At the same time, we remain alert as to changes in industry practices and changes in health & safety and other regulations to ensure that we are providing sharp-end and sustainable solutions. This is largely through industry-related media, trade shows, word of mouth and by connecting with professionals from trade associations.

Complementary products, such as generators, are a consideration for future development.

We are working towards reaching the situation where our knowledge of the changing requirements of the market means that we have the products and the infrastructure in place to service the demand ahead of time.


EQUIPMENT SALES

We are also looking to re-establish sales of new equipment and develop a sought-after brand of equipment in the marketplace. Promoting sales alongside hire gives us an opportunity to increase revenue without the heavy capital investment of a hire fleet. Sales gives scope for quicker capital turnover, producing equivalent if not greater ROI than hire.


EQUIPMENT

The hire fleet of equipment will remain in the ownership of the current partnership, Cheswold Logistics, for the time being and will be available exclusively for cross-hire to Airflo on demand.

This includes ventilation fans, dust and fume extraction fans, air filter units, exhaust filters, vacuum cleaners, mobile and package air conditioning, cooling equipment, mobile heating equipment and refrigerant recovery pumps.

We have a vision to operate a hire fleet of new and young equipment to give us maximum reliability and minimum maintenance. New and reliable equipment reflects investment and boosts consumer confidence. Hirers will select new equipment given the option.

However, this initial growth period is going to be dependent on utilising the existing hire fleet which largely consists of old equipment due to a long period of relative inactivity and poor utilisation.

In line with our goals, we have a fleet renewal strategy as follows:

  1. To maintain to a high standard what equipment we have, as far as is economical, without resorting to replacement unless absolutely necessary for at least the first 12 months.
  2. During this 12 month period, analyse and rebuild a fleet plan, establish suppliers and pricing in readiness for renewal.
  3. First equipment to be replaced will be the oldest of the equipment we have identified as the highest demand items, working through the fleet according to age and demand.
  4. If we identify a demand for equipment that we haven't already got in the fleet this may take first priority in the renewal plan.
  5. If we receive an order for equipment currently not in the fleet, we have the option of cross-hire or if it can be justified, new equipment may be purchased.
  6. The goal is to have a hire fleet under 5 years old and consistency of style and type within each sector of the range.
  7. Old equipment will be sold off and revenue put straight back into the renewal budget.


COSTS AND PRICING

1. Price Programme

a. We set a weekly rate for each piece of equipment which is constant throughout the hire, unless we agree a discount after a period of time.

b. Standard discounts apply if a hirer agrees to a specified contract period

i. 10% for 4 weeks

ii. 15% for 8 weeks

iii. 20% for 12 weeks

2. Whilst there is an agreement in place between Cheswold and Airflo for a cross-hire charge, it is agreed that this will be waived for at least the first 12 months. Cost of maintenance will be the responsibility of Airflo.

3. We will track the costs and revenues and depreciation of each piece of equipment which will enable us to

a. establish break-even revenue for each piece of equipment

b. identify an optimum time to renew the equipment

c. keep hire rates realistic and competitive

d. set a realistic selling price and return a realistic profit on disposal

4. We will establish average break-even revenue for each hire transaction which will enable us to

a. ensure we are returning a profit on every hire

b. keep us competitive

5. Hire equipment will automatically come up for renewal at 5 years which will normally carry through unless there is a specific reason why we need to either retain it or replace/dispose of it earlier.


STRATEGIC PRIORITIES

1. A platform for growth

The initial strategy for growth has got to be to optimise utilisation of the existing hire fleet. Utilisation has been very poor at around 3-4 weeks, where we would expect most of our fleet items to be on hire for at least 15-20 weeks each.

We are constantly looking at development opportunities but our concentration will be to build on what we have in order to start bringing in revenue for growth, whilst continuing to study the market closely to maintain a clear roadmap for expansion.

Our growth will be largely structural, based on the increasing awareness of workers' health and the drive towards occupational hygiene. Government and independent health and safety programmes are driving demand for better working environments and clean air. The work of occupational hygienists and health and safety organisations is only increasing the scope for temporary ventilation solutions on sites.

If we have to make any investment in repairs and maintenance or additions to the fleet we will prioritise the high ROI equipment, in line with our goal for growth.

2. Financial and operational flexibility

This means that we have the strength and capacity to steer the business through the economic cycle, reacting to market changes and opportunities that arise in order to grow.

We are currently 6 years into the current cycle and whilst we have gone beyond the anticipated average 5 year period of expansion, it is reckoned we have about another 12-18 months to peak. During this slowing down period and over the peak into recession, we have opportunity to grow as the construction industry turns away from new build towards refurbishment.

As recession progresses, it is the strength of our structural growth that will give us the flexibility to maintain our market share and enable us to continue to grow

ROI is a key measure for a rental company and the best medium-term indicator of the strength of the business. We will have a mechanism to track ROI to ensure we are delivering on expectations.

3. Operational excellence

Our business is built on customer service and is going to continue to grow on customer service if we are to build a stable and sustainable market share.

I believe that operational excellence drives financial performance and that if we are to grow we first have to excel in all departments. This will mean a focus on efficiencies and synergies throughout the organisation including fleet utilisation and the quality of the fleet.

Whilst the current fleet is old we have sufficient equipment of good and serviceable nature to demonstrate operational excellence in the intervening time until the fleet renewal strategy comes into play.


INVOICING AND CREDIT

In order to improve cash flow, invoices will be issued every 4 weeks, rather than monthly throughout the hire period and as soon as the hire ceases.

Credit is given for approved accounts and we take advantage of card payments as much as possible.

We are aiming for a zero bad-debt target. This will be set at 60 days from end of invoice month. Payment will become overdue at 30 days from invoice date although we accept that 30 days from end of invoice month is usual in the industry.


MAKING IT HAPPEN

1. Our prime marketing strategy is to win the confidence of the market, offering ourselves as a valued and trusted advisor and service provider rather than just a supplier of equipment.

2. At the same time as trying to get away from seasonal dependency, we still have to take advantage of the seasons and the pending summer will feature heavily in our initial marketing drive.

3. We have adopted zero-time selling, which is a system of responsiveness where every enquiry is urgent; the time-frame for every sales action is now. It means we have the knowledge at our fingertips as customers want answers now. Above all, it is unconditional customer service.

4. We already have a website which we are keeping regularly updated and relevant. We are aware of a need to start a blog and to have more industry-related information downloads and videos available to attract viewing.

5. From day one, we will

  1. drive traffic to the website in all marketing activity and media
  2. utilise content marketing on social media to best advantage, building trust with category of persons we identify as our customers
  3. have a structured email marketing programme
  4. have a structured telemarketing programme
  5. aim to get face-to-face appointments
  6. largely use PDF and electronic media, with limited printing as necessary

6. EXISTING CUSTOMERS - PRIORITY FIRST

  1. Contact all recent customers
  2. Get appointment to see them
  3. What more can we do to help them?
  4. What other products can we supply them with?
  5. Draft plan of suggestions for each one - eg ventilation to Doosan
  6. What projects are coming up?
  7. Ask for referrals - people in same company and other companies
  8. Get them into conversation about things they are doing and need, even if not related - we might be able to give them a referral
  9. Keep constant lookout for similar companies

7. NEW PROSPECTS - PRIORITY SECOND

  1. Contact all referrals from 1 and 2 above, quoting the referees
  2. Get appointment to see them
  3. Do they use products like their referrers?
  4. What projects are coming up?
  5. Ask for referrals - people in same company and other companies
  6. Get them into conversation about things they are doing and need, even if not related - we might be able to give them a referral
  7. Keep constant lookout for similar companies

8. OLD CUSTOMERS - PRIORITY THIRD

  1. Contact all old customers
  2. Get appointment to see them
  3. Are they still using products like we used to supply them with?
  4. What can we help them with now?
  5. Have their needs or processes changed?
  6. What projects are coming up?
  7. Ask for referrals - people in same company and other companies
  8. Get them into conversation about things they are doing and need, even if not related - we might be able to give them a referral
  9. Keep constant lookout for similar companies

9. SPECIFIC MARKETS/PROJECTS

  1. Power stations - managing/maintenance contractors - eg Doosan Babcock, Cape
  2. Construction - eg Kier, Willmott Dixon - see Top 100 Companies list
  3. Off-shore contractors - test the water for supply of desiccant driers
  4. Food manufacturers/bakeries - eg Greencore
  5. Metal producers - eg British Steel
  6. Rail
  1. HS2 - get details of Tier 1, 2 and 3 contractors
  2. Crossrail
  1. Thames Tideway Tunnel
  2. Work with complimentary companies to get new contacts and leads - eg Bradgate, Beaufort, BPH
  1. Get appointments to see them
  2. Send case study leaflet (not yet prepared)

10. CURRENT ACTIVITY

  1. Contacting H&S, Project and Plant Managers of construction companies
  2. Scouring trade news for
  1. contracts coming up and work commenced
  2. flood/fire damaged buildings
  1. Contacting trade associations for referrals, advice on routes to market and to keep updated on specific industries or issues
  2. Analysing recent jobs and identifying similar situations across different industries

11. MARKETING COLLATERAL

  1. Prepare brochures for rest of fleet equipment and put together into a booklet
  2. Prepare industry-related case study style documents
  3. Prepare a series of relevant articles for social media and get endorsements
  4. Develop website and make responsive

12. PLANS & TARGETS

  1. Specific equipment-related targets are a bit hypothetical at the moment but, over time and with fresh market experience, we should be able to set these accurately. For the time being, they will be a necessary guide

13. GENERAL

  1. Look companies up on the internet for extra intelligence before ringing- ask about specific projects or events
  2. Never stop asking for referrals
  3. Never stop looking out for similar companies
  4. Follow up tirelessly
  5. Always be closing

14. DAILY ACTIVITIES

  1. Telemarketing and sales time 0900-1200 and 1400-1600 every day
  1. This may include sales operations eg getting equipment out, delivery etc
  1. Repairs and maintenance 0630-0900
  2. Accounts and admin between 1200-1400
  3. Prep tasks and reports 1600-1645

15. RESOURCES (not exhaustive)

" http://www.theconstructionindex.co.uk/market-data/top-100-construction-companies/2016

" http://www.kier.co.uk/press-office/press-release/2017.aspx

" http://www.doosanbabcock.com/en/media/news/news_list.do

" http://www.willmottdixon.co.uk/news/sectors/all/4

" http://www.balfourbeatty.com/media/news-releases/

" https://www.gov.uk/government/organisations/high-speed-two-limited

" http://www.crossrail.co.uk/news/articles/?category=press-releases&year=0

" https://www.tideway.london/news/

" https://www.carillionplc.com/news-and-media/

" http://www.mitie.com/news-centre/news/2017

" http://www.jackson-civils.co.uk/news

" http://www.sir-robert-mcalpine.com/news/

" https://www.eonenergy.com/About-eon/our-company/locations-summary

" https://www.edfenergy.com/energy

" http://sse.com/newsandviews/allarticles/categories/power-stations/

" http://www.drax.com/media/#press-releases


NEXT STEPS

1. BUSINESS STRUCTURE

A new entity will be formed to carry Airflo forward in the ownership of Stephen and Nancy Smith. The hire fleet of equipment will remain in the ownership of the current partnership, Cheswold Logistics, for the time being and will be exclusively cross-hired to the new entity on demand. The partners of Cheswold Logistics will not be remunerated by Airflo for the time being.

A support team and/or non-executive directors will be a valuable and vital part of the success of the company.

2. MARKETING RESOURCE

We have internal resource for graphic design, web design and expertise in social media which can be utilised outside trading hours to keep costs to a minimum.

We will not print literature or stationery unless absolutely necessary, using current provider of economic, short-run digital printing when needs arise.

3. REPORTING

Regular reporting on - at least monthly if not weekly.

- Sales

- Purchases

- Overheads

- Prospects

- Drawings

- Bank

4. BUSINESS SYSTEMS

There are business systems designed specifically for the hire industry, one being 'Syrinx', which we have in mind as a future development, due to cost - around £5K. In the meantime, we are using Sage for the accounts. As this won't talk to the CRM we are using, it is in mind to use a product like Quickbooks instead of Sage.

5. BUSINESS PARTNERS

I am identifying complementary companies, those who supply different products to the same market, who would have an interest in promoting Airflo products and services as part of their own solutions portfolio.

6. MARKET RESEARCH

We are keeping in touch with trade associations and professional bodies, especially those specialising in occupational health and hygiene and related topics. Whilst this isn't a route to market in itself, it gives us valuable resource to take to market, adding value to the service we offer. Potentially there could be opportunity for referrals. At the same time, we are keeping abreast of the changing marketplace.

7. TIMING

In view of taking greatest advantage of the summer period, we need to start marketing seriously from 1st March.