Survive the economic recession as a small business in the UK

AR Engineering Industries Ltd, based near Dartford in Kent, is an ISO9001:2008 UKAS accredited organisation offering a wide range of engineering, manufacturing and machining services to a wide cross section of industries and business sectors, in addition to end user consumers. Jasper talked with Claire Cooper, Operations director. She recently won the Business Personality of the Year at the Dartford & Gravesham Business Awards 2010. Claire explains how a complete revamp of AR Engineering Industries led to a dramatic growth of business.  

What’s it like to work with your father in a family run business?

AR Engineering precision engineering in Kent was formed by my father 16 years ago. I joined AR after completing a Masters of Mechanical Engineering at the University of Surrey and was commissioned to design and implement a Quality Management System in order for the company to gain ISO 9001 approval.

On successful completion of the project I started to take a more active role in the business management of the company, and now as Operations Director am responsible for overseeing the strategic management of all of the operations within the company. My day to day role involves an endless variety of tasks from sales and marketing, technical engineering, accounts and finance, human resources responsibilities, alongside of course, general administrative duties and making the tea!

This comment alone highlights the issue I find most significant in working within a small company. Unlike large corporations smaller businesses do not have the resources for clear departmentalisation and pigeonholing of roles and responsibilities. Every member of the team in a SME has to be prepared to work in a flexible manner and multitask to ensure the demands of the business and ultimately our clients are met. Good time management and communication are of paramount importance when striving to achieve a professional service and maintaining a slick operation.

Working in any small business requires strong relationships to be developed amongst the team to make certain of success; at AR we are an extremely close unit – bought even closer by the fact that four members of the same family work here. My father, Alan Cooper, and I work together full time. Often this makes ‘leaving work, at work’ difficult, particularly through stressful and difficult times. However, I believe that our unconditional father – daughter bond has added a unique strength to our team. Over time we have learnt that our very different attributes and skills, along with our own individual strengths and weaknesses need not conflict, but can be used to compliment each other. Our close relationship makes way for absolute openness and honesty, this combined with our vested interested in the company guarantees we work in a wholly committed way to deliver longevity and success for AR.

I personally enjoy working in a small business; the strong influence you can have as an individual on the activities and operations within the business creates great challenges, being able to clearly see the results of my work directly impacting the success of the business and driving it forward is a huge motivation.

Your business was hit by the recession. How did you find your way out of recession?

Historically AR Engineering has predominantly worked within the automotive industry, however in recent years the UK (car manufacturing industry has been steadily decreasing). When the recession hit this decline was only accelerated, leaving many of the lower tier suppliers, such as AR, fighting for survival. Like most other similar businesses, AR made cost savings and cut backs. 12 months on we had survived, a huge accomplishment given the severity of the recession and down turn in sales, nevertheless to look to the future something had to change.

I believed that AR, armed with the ISO approval, had the potential to rebuild, grow and conquer the SME precision engineering market, and that I could be the driving force to realise these targets. A complete overhaul of the business was necessary, so on formulating a comprehensive marketing plan and new business strategy, I set to work with a company ‘re-launch’ project.

A dramatic revamp of the business began by incorporating the previous partnership of A&R Engineering into the Limited company we have today. Following the official launch event of the new AR Engineering Industries in February 2010, the company has gone from strength to strength, winning more and more contracts from key clients in the aerospace and defence sectors defence engineering business. Most importantly, AR is gaining recognition as a trusted authority on precision engineering, and working as a prime contractor is now within our grasp.

Although the initial company re-launch has proved a success, the economy is still in recovery and the manufacturing industry within the UK, continues to be a highly competitive and tough industry to operate within. With this in mind AR needs to continue to work dynamically and be proactive and forward thinking.

Marketing was an activity not within our past scope of operations; it has proven to be fundamental to our survival to date and we are continuing to work on developing this function of our business to ensure our aspirations for growth and development come to fruition.

Marketing our company in a wide variety ways with a spread of different methods has ensured that AR are no longer invisible - an issue many SMEs face.

We have been varying our marketing activities to date and are collating information and data to establish which methods are most successful to us. The key elements have included the re-launch event and our new website and company literature. We have been carrying out a telemarketing campaign supported by sending out regular newsletters and company updates. To compliment this we have also embraced the world of social media to reach out to both new and existing clients. We have also embarked on acquiring regular general PR including, articles in trade magazines and other publications, sponsorship of local school projects and charitable events and most recently we reached the finals of the local Dartford & Gravesham Business awards where I received recognition for my work in the company.

As part of the re-launch project we created a new logo design and are trying to use this branding consistently throughout our communications and whereever AR is represented, I envisage the AR brand to become instinctively recognisable within the precision engineering, manufacturing and general engineering industry.

I am now committed to ensure that we continue to actively market our business and that marketing is treated as an intrinsic function of the business and is budgeted for alongside other necessary and regular commitments for example, paying our fuel bills. Without electricity we can not operate as a business – our mind set is now that without marketing we also can not operate.

Was it hard to get the accreditation to the ISO 9001:2008 quality management system?

AR has always been a ‘precision’ engineering company – quality and accuracy are intrinsic to any products we manufacture. We work to close tolerances for components in a range of critical applications. The nature of the main industries we serve – automotive, aerospace and defence means that they demand goods where by quality cannot be compromised due to the implications of a component functioning incorrectly and the resulting effect on not only performance issues but also health and safety.

With an appreciation of this, AR have manufactured high quality components for more than 16 years; the introduction of a formal Quality Management System assisted us with improving the infrastructure and supporting operations within the business to make way for more efficient in-house processes, allowing for an overall better service to be delivered to clients, both current, past and potential.

The major challenge in achieving the standard required for accreditation was in changing the culture of the employees. Initially the introduction of additional paper work and forms was not only daunting but was seen to be an unnecessary increase in work load and as a method of monitoring performance and output. It took careful and thorough training of the staff in order for the system to be accepted and to work. The training however was not simply to give the team an understanding of the system and new instructions to work by, but most importantly to give them an appreciation of why the system is important and must be adhered to, not only as part of the everyday work, providing tangible data and records to use in the business management activities but to enable sustainable and controlled growth of the company.

With all the team behind the project and careful planning and time management, the ISO 9001:2008 implementation project was executed successfully.

Do you think the ISO 9001:2008 and further professionalisation was the answer to grow your business?

AR were awarded the ISO 9001:2008 certified approval for our Quality Management System (QMS) in 2009.

In developing the system I believed that it was not only important to acquire the certificate so that the prestigious and recognisable LRQA logo could be displayed on our website, company stationery etc but to use the processes and procedures mapped out within our Quality Manual would help us all work more efficiently and effectively. As a result of taking the time to implement a comprehensive system throughout all operations within the business, we can now deliver goods and services much more quickly and consistently. The QMS has given us the ability to easily monitor data and our critical KPIs and recall historical records.

At the height of the recession in a fiercely competitive industry obtaining the ISO 9001:2008 approval was significant in the survival of the business. The Quality Standard gives clients the confidence and assurance that we are committed to quality. Historically with introductions to new potential clients, we frequently stumbled at the first hurdle as we could not provide this assurance. Customer demand was the driving force that led us to develop our own QMS system.

As a result of gaining the approval we have won new business. It has proved to be an invaluable marketing tool; however as a stand alone component it would not have produced results. It was through our complete marketing project and company re-launch, and all its respective activities, that the re-stabilisation of AR Engineering Industries began and is now on its way to being a respected player in the SME Precision Engineering sector.

You’re using some marketing techniques not performed by your type of business. Why did you choose to embrace tools such as Twitter, Facebook and other online platforms?

AR Engineering Industries is a family business. Precision engineering encompasses the use of high technological methods of production and manufacturing, however the industry itself is perceived to be fairly old fashioned in its culture. Particularly by comparison to other similar SMEs it is notable that beyond the use of the high-tech manufacturing capabilities we have other functions within the businesses that have tended to remain conventional. This is very much true with the marketing functions in engineering companies.

Like us just a year ago, few of our peers have anything that could be seen to be a marketing function, most work is won on recommendations and word of mouth or as a result of long term business relationships. The industry is becoming ever more competitive, and the expectations of clients are increasing. As a business you need to gain competitive advantage over your peers and in creating our brand recognition and reputation I believe that with the fundamental business activities refined and our approvals update established, we can look to differentiate ourselves by use of information technology.

The evolution of information technology and the influence this has on our working culture and behaviour today is far greater than anyone could have ever imagined. Today it is at the forefront of all of our lives; in our homes, when socialising, at work, and more recently quite literally in the palm of our hands with the development of new internet enabled mobile phones.

Social media including - Facebook, Twitter, online blogging, and LinkedIn are relatively new activities. but the use of them is growing at a phenomenal rate and is wide spread across a complete cross section of societies including not only individuals but also businesses as well. Other than time, currently these are all accessible effectively for zero cost and they have been designed to be user friendly with minimal IT skills required for effective use of them.

As AR have been looking at a variety of marketing tools and techniques we decided to explore the possibilities for and uses of social media. Each different platform offers different specific goals it can help you achieve. For example LinkedIn focuses on meeting and developing relationships and networks with other professionals as individual people, Facebooks allows a company page on which stories, photos and information can be uploaded, fans subscribe to this and can publicly comment on items appearing in your news feed. Online blogging allows you to share stories, news and information with your contacts through email and other electronic media. Twitter is a micro blogging service that allows people to send and read messages of up to 140 characters.

With the growth in use of such tools set to continue, we believe that it can only become of even more value to the ways businesses not only advertise, but also communicate. Communication is the key to the use of social media. It has helped establish a forum whereby the sharing of information and development of relationships is more frequently used rather than focusing on direct sales. Although of course it is our ultimate goal to achieve an increase in sales, it offers an alternative to the faceless advertising campaigns, email shots, cold calls etc we have become all too familiar with. Sharing information, news stories, and details of key events or technological developments is an excellent way to increase the profile and visibility of your business and enforce the brand awareness we are all striving for.

Of course looking at the flip side of this, not only are you sharing information and giving something to the online community but there is a wealth of knowledge and expertise at your fingertips. By carefully selecting your ‘followers’ on Twitter or ‘connections’ on LinkedIn you can choose relevant contacts that not only may be likely to result in sales activity but also may be useful to you in terms of the information they share. Businesses might share key industry updates, news on development of new products, news from your local community etc, which you can then target to aid your own learning and business development.

At AR we cannot recommend experimentation of social media enough; to date we have been working carefully on our social media presence and have seen leads and interest from all sources. Sales have been generated through our use of social media and we have also gained useful knowledge, particularly with regards to marketing activities, and built important relationships through this forum with both existing clients and potential new business associates.

What advice can you give Engineering businesses to grow out of recession?

From our experience, the key advice I would give to SME engineering businesses is that with the introduction and continued development of a marketing function which supports the business’s core activities, a steady and sustainable growth can be found. The word marketing is often perceived to be an ‘expensive’ term associated with costly activities, however ,as we have found out with careful market research and selection of the right activities you can carry out marketing with budgetary constraints. As a return on investment is seen on the marketing activities, budgets can be increased where necessary so that the function can expand with the business. Due to the recession taking its toll on AR, resources and funds for marketing were extremely limited, success has now been founded and we now need to be as committed to our marketing promise as we are to our assurance for high quality, ensuring that the business can move forwards and continue to grow and develop in order to realise our ultimate goal of becoming a leading institution in the SME manufacturing market.