David Markham is sales director of the Blue Sea Food Company in Paignton. Here he talks about starting a crab business in Torbay and its aims for the next financial year.
Q How did you come to join/set up the company?
A The Blue Sea Food Company developed out of an Exeter University MBA Entrepreneurship project. Trevor Bartlett, our MD and local fisherman, had always felt the local fishery was under utilised and was keen to develop sales from the fishery to the UK retail market and abroad. We built a million pound factory with no customers (or money) and soon realised this was going to be harder than we at first thought! We started with 11 of us selling to top end London restaurants and a few fresh wholesalers. After three years of struggling the company gained British Retail Consortium accreditation allowing us to sell to the supermarkets. With Tesco and Sainsbury's on board we started to make profit only to have our factory destroyed by fire in November 2008.
As part of the insurance deal we bought Browse Brothers crab factory on Paignton Harbour. As this is an old factory we were no longer able to supply the retail markets but the purchase allowed us to mitigate our losses and minimise our business interruption. From May 2009, when we purchased Browse Brothers, we have grown the business and now sell throughout Europe and are increasing our presence in China and South East Asia.
Q What is your background?
A All of my serious work after leaving university involved tobacco. I started as a farm manager in Zimbabwe growing tobacco and cotton on a 16,000 ha estate in the middle of the country. After a spell as an irrigation engineer I realised that with the current political state of Zimbabwe I would not be allowed to stay and work there so I returned to the UK to find a job with one of the three major tobacco merchants in London. I ran agronomy and buying projects in Azerbaijan (two and a half years in Sheki and Zakatala up in the Caucasus mountains). After this I spent three and a half years doing the same in Poland and then returned to Exeter to take my MBA. Before starting the Blue Sea Food Company I looked after a project in Yunnan and Sichuan, China.
Q What was the company like then?
A When we started we had a huge factory (11,000 sq ft) and only 11 people. The team of five, who originally started the business, were very hands on, cooking crab, processing and cleaning the factory.
To be honest it was a bit of a shock for all of us as we had all come from fairly senior positions in large companies. However this was ours and we couldn't afford to fail, not least of all because of all of the friends and family money that we had to pay back.
It was really tough to start but we had, and still have, a great team and we slowly grew sales to a point where we could see light at the end of the tunnel.
Q What has been the company's greatest achievement?
A Not going bust at the start or after the fire. Other highlights include getting our fantastic Devon crab listed with Sainsbury's and Tesco, exporting to China for the first time and buying out a major competitor in Scotland. From an operational perspective we are constantly looking for new ways of processing crab in order to maximise returns from the crab we buy.
We have been very successful with instigating new cooking methods and picking techniques. When you are processing 1,600 metric tons of crabs a year increasing yield by one per cent is very exciting.
Q What's next for the company?
A We still have to complete the rebuild of our old factory that burnt down but hope to do this in the next 36 months. This will allow us to grow the business to an extent that is impossible in our current facility. We need to complete the changes we have introduced to our Scottish business (Burgons of Eyemouth) and increase sales there so it turns a profit.
Burgons will focus on the UK retail market that we believe is currently under supplied but new competition is fierce.
Q Who has been your most significant mentor?
A My dad. I worked with him at the family ice-cream shop in Sidmouth during my summer holidays. I learnt as much, or more, here as I did during my MBA as the basic business principles are the same; the cash in the till is not yours, stock choice and management are vital, sell what the customer wants, not necessarily the same as what you want or think they want, margins are important but you bank cash and look after your people to ensure longevity. Oh, and of course, cash is king, particularly in a seasonal business.
Q What major challenges are you facing?
A The same as many SMEs, cash for investment. We know there are great opportunities to grow our business but we need funds over and above retained profit to develop our factories. Banks are becoming more willing to lend and there are good grants available to the fishing industry, however, unfortunately, the wheels of public sector departments sometimes turn too slowly for seasonal businesses like ours and before you know it a year of opportunities is lost.
Q How would you describe your management style?
A The business has changed a great deal in the last 10 years, we have gone from six employees to as many as 300 during peak season. My partners and I have different management styles which suit different situations.
That said, as we grow we all try, not always successfully, to delegate responsibility and decision making. We are very aware that as a business develops we can't expect to control every part or indeed want to and that is why we are looking for new managers with the confidence and abilities that, with training, will help to run our business.
Q How do you keep enthused and keep things fresh?
A I think the type of people who start any business can have a propensity to get bored quickly. I don't think that we could say "that's big enough, let's stop here and relax", we are constantly looking for the next sale or the next new way to extract more value from the crab. Most of the time this keeps business interesting although we often bite off more that we can chew and this is where our non-exec and accountants (Darnells) look to calm things down.
Q What awards have you (or the company) won?
A None yet! We are a small team and while sometimes good for marketing, the applications for awards can take time we don't always have. We would rather judge our success through retained customers and staff.
Q What other organisations are you involved with?
A We are members of the Federation of Small Businesses, on the committee of the Shellfish Association of Great Britain.
We are also involved with Seafish, the authority on seafood, and a couple of local export groups.