AIRFLO ENVIRORENTAL LTD
Fresh Air. Anywhwere.
Protecting workers’ health and improving productivity
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-
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."
Last year the company produced GP 84% and NP 26%
So far this year we are running at GP 72% and NP 28%
WHO WE ARE
VISION AND VALUES
WHERE WE'VE COME FROM
THE SITUATION TODAY
MAKING IT HAPPEN
PROFIT & LOSS STATEMENTS
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.
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.
We are governed by four simple core values which embrace and endorse our fundamental guiding principles of honesty, integrity, openness and teamwork.
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-
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-
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-
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 -
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-
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-
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-
British Steel, Scunthorpe
Heavy duty vacuum cleaning equipment and oil-
THE SITUATION TODAY
MARKET ACTIVITY AND PROJECTIONS
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.
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 -
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.
We have two tiers of suppliers:
STAFFING AND OPERATIONS
The current owner works full time and draws in part-
Deliveries are usually made by carriers or transport contractors.
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-
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.
We are also looking to re-
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-
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:
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-
3. We will track the costs and revenues and depreciation of each piece of equipment which will enable us to
a. establish break-
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-
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.
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-
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-
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-
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-
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-
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-
5. From day one, we will
6. EXISTING CUSTOMERS -
7. NEW PROSPECTS -
8. OLD CUSTOMERS -
9. SPECIFIC MARKETS/PROJECTS
10. CURRENT ACTIVITY
11. MARKETING COLLATERAL
12. PLANS & TARGETS
14. DAILY ACTIVITIES
15. RESOURCES (not exhaustive)
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-
A support team and/or non-
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-
Regular reporting on -
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 -
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.
In view of taking greatest advantage of the summer period, we need to start marketing seriously from 1st March.
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