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Recession pressures no obstacle to Rylatt's launch

Establishing your first dealership in the middle of the worst recession for a generation and literally building it from the ground up on a trading estate at the edge of an East Anglian market town seems a combination to chill the ambition of the most determined entrepreneur.

But just a year after the doors opened at the family run dealership in Spalding, James Rylatt can already speak with some confidence about his plans to open a second outlet in the area.

The 32-year-old began discussions with Ford to run the franchise in 2007.

The ice was broken in the local Morrisons’ supermarket café between the Rylatts and the manufacturer’s dealer development team.

There had been a long-established Ford presence in Spalding in the EMG, formerly Edmondsons, business.

A parting of the ways between EMG and Ford that year had left an opening for the franchise in the town that Rylatt was keen to capitalise on.

“When we started talking to Ford, the world hadn’t yet fallen off a cliff. When the recession came, we adopted the mindset that well-run businesses do survive and with the right product in Ford at the right price people will still spend,” Rylatt said.

“And the business was like a supertanker on the move – once it starts it’s very difficult to stop.”

He admits he couldn’t have picked a worse time to establish a business from a funding perspective

“The taps were turned off.”

The Ford dealer development team was “incredibly supportive” of Rylatt’s plan, but he candidly admits the fund-ing problems were overcome by “shouting at Ford Credit”.

“Ford Credit came through at the 11th hour,” he said.

A lack of vacant sites in the town meant the showroom would have to be a new build on a greenfield site. Building work started in September 2008 and was signed off on March 13, 2009.

Operated on a five-year rolling lease, the 6,000sq-ft business consists of a showroom for four cars and a workshop with four bays, plus an MoT testing point, and space for up to 25 cars in stock.

The Rylatt business plan forecast 75 new car sales in the first year.

In nine months the total was 100, aided by the fact it was the first time in the area customers could see the full range of Ford cars for some years.

This year Rylatt expects to sell more than 150 new cars. The projected turnover is between £2.2 million and £2.5 million.

While absorbing start-up costs, Rylatt is satisfied the business is profitable month-on-month.

And while the workshop is running at 50% capacity now, he is confident it can fully absorb the overheads of the business in the next 12 months.

The support from Ford is being reciprocated: all Rylatt retail business goes through Ford Credit and all warranties through Ford Protect.

The approach to used cars has been more tentative, but no less focused. Rylatt won’t sell any non-Ford used car if it can be avoided.

New cars had been an attractive sell in the area. Fourteen new Fiestas were sold over the summer from stock. Rylatt didn’t have room for used stock.

“We also sold more than 30 units on scrappage so there were no part-exchanges. We’ve also been quite fortunate in bringing people to Ford from local Volkswagen and Vauxhall dealerships,” Rylatt said.

Rylatt gained his experience working with automotive clients in his previous role as chartered accountant at KPMG. During his university years he worked for a dealer group Wilsons in Epsom and Dees in Croydon and Wimbledon.

The trade is in his blood.

His father John spent 30 years in the motor trade as a director of Wilsons in Epsom, ran the Autocheck import centre for Mazda when it was MCL and was a Datsun service manager in the 1970s. The 65-year-old has come out of retirement to support his son.

And while both directors, Rylatt junior is very much in charge and, despite his relative youth, he has a grounding on the benefits of family experience and a personal business style.

He said: “Wilsons is a very successful firm. And while the boss Ian Wilson wasn’t onsite everyday he would approach each visit as if it was the first time and brought to the business an incredible eye for detail.

“It wouldn’t make any sense if I didn’t approach this business in the same way.”

As a result Rylatt is putting in, on his own admission, an unsustainable 70 hours a week, required initially to get Rylatt Ford established.

The business is deliberately lean with five staff: three technicians, an apprentice and a salesman.

“Working at KPMG for automotive clients and a variety of companies, the most successful ones were where staff were empowered to make decisions,” Rylatt said.

“So, my salesman Paul Bemrose, knows the financial parameters he has to work on. The same responsibility rests with my master technician Daryl King – he knows he can negotiate on price as long as the customers keep coming back and we are profitable.”

Bemrose worked for EMG for five years and King had 20 years’ experience with EMG and Edmondsons.

“I don’t believe in the nonsense that sales and aftersales should be separate,” Rylatt said.

“Paul sells cars to service customers and Daryl will go out on a used car test drive. I cannot afford to have the business run any other way. It costs a lot of money to get people into my building, so it’s critical to sell to every visitor.”

As a new business, Rylatt Ford had to start from scratch with its customer database. The most effective technique has been door knocking.

“We have a successful local business and continuous service work because Daryl has gone out and told people Rylatt is the new Ford dealer, with a new workshop, skilled technicians and rates £20 an hour cheaper than most dealers in this area,” Rylatt said.

The dealership is at the edge of a trading estate. The door knocking here means nearly every resident business has bought from Rylatt Ford.

What works for a business also works for private buyers.

Rylatts sold a new car to a local florist; she recommended the dealership to an undertaker whose son bought a Ford Direct car and the florist’s boyfriend bought a new Fiesta.

One happy customer led to two additional sales.

“There is no point me wasting money on local newspaper advertising if I can win sales through customer recommendations,” Rylatt said.

Mailshots press home the service message – Rylatt is a local business with competitive prices and the Ford expertise.

Rylatt signs the letters himself and the staff write the envelopes: “People are more likely to read a personalised letter than a photocopy.”

The dealer also advertises on the local radio station, sponsors a tee at Spalding golf club (the treasurer is among club members who have bought from Rylatt) and sponsors the town’s rugby team.

“It’s easy to say that customers like dealing with a family-owned business, but at the root of it is the comfort that comes with who you are dealing with.

“As my name is above the door it’s me that will suffer if something goes wrong, but it’s the business that will benefit when we do things properly – that’s the key: owning the customer, not simply being a family business,” he said.

As Rylatt takes stock of his growing business he admits his thoughts have turned to business expansion.

“If we have the step growth in our performance in 2010 the business could be in a strong position to expand in two or three years’ time. I’d quite like another Ford dealership,” he said. 

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