Such is the intensely competitive nature of today’s fuel retailing market, that you’re more likely to be saying goodbye to fellow retailers than welcoming new ones into the fold.
But two years ago Mike Willman actually chose to become part of this industry when he bought a service station in Bramley, near Guildford. He had tired of his previous career in which he had spent 30 years as an engineer in the pharmaceuticals industry, and ran his own company that designed clean rooms and facilities for manufacturing drugs.
“About four years ago I started looking for an alternative business,” says Mike. “One of the key elements of choosing a business outside my field was that it had to be a cash business – I didn’t want to be waiting three months or six months to get paid. That’s because, in the industry I come from, 60 or 90 days is the norm for getting paid – essentially the clients were notorious for paying. Businesses stand and fall on this – so we were looking for something with a little less risk in that respect. That narrowed the field.”
Mike and his wife Kathryn were very aware that the forecourt industry was going through a big transformation in terms of shake out of uneconomical sites. They reasoned it was the industry to go into, because the good ones left should stand the test of time, and have the potential to grow.
“We were very aware that there was a lot of rubbish on the market – we looked at a lot of businesses, and spoke to a lot of oil companies. It took us four years to find the Bramley site. It was owned by Margram and leased by BP. Although it didn’t fit BP’s criteria we knew it could still make a profit and supply a reasonable living for a singleton. BP showed me the turnover – it was exactly what I was looking for, but it was too expensive. However, when we put the business plan together and showed it to the banks, they were very interested. We started negotiations in early 2003 and took over the site on July 1 that year.”
It had been purely a BP co-owned, company-run site. It had 380sq ft of shop space and a car wash. BP had renewed all the tanks, pumps and external infrastructure in 1999, so the forecourt was relatively new – another plus point.
Already feeling pleased with his purchase, within a month of owning the site, Mike was about to discover a very pleasant surprise.
“We decided, for various reasons – including security – to operate on a 24-hour basis. So I rang the council to see if there was any restriction on that, which there wasn’t. But during the first phone call, when I asked ‘do I need planning permission to open 24 hours?’, the council said, ‘you’ve got planning permission’. I put the phone down and rang Margram and was told that planning permission for a store had been applied for, but it hadn’t been mentioned as it may have held up the process of the sale waiting for the outcome. It turned out that about three weeks after we took over, planning consent was given. So we inherited a site which now had substantial capability to expand. Planning applications like this at their best are dreadful. In a conservation area – which Bramley is – it is far worse. We would have done something like that probably, but not so quickly.”
Mike and his wife then looked at how to implement the plans, and the process of choosing designers, architects and builders began. During that time petrol sales rose from about five million litres per annum to more than 5.6mlpa. Shop and car wash sales rose from between £13-14,000 a week to £20,000 a week in 18 months.
“We found the site had been running very inefficiently,” says Mike. “We began to run it better by simple processes and common sense. We also changed many of the product lines and started introducing groceries. The 24-hour basis paid for itself, and the mindset among customers began to change – people started coming to us because they knew we were going to be open late. Then they started coming even during normal hours when other stores were still open. It had been a gamble, but I knew it would change – although not to the extent it did.”
For the first year Mike still worked in the pharmaceutical industry – running both businesses. After a year it became too much, especially with the imminent shutdown and rebuild of the site, which he was project managing.
The site was closed from January through to the end of May this year – 20 weeks – and resulted in a modern store with 3,000sq ft on the ground floor and 1,000sq ft on the first floor.
The choice of Budgens had come – as usual – after a great deal of homework: “We spoke to Tesco’s, Sainsbury’s, Somerfield and so on. Out of all them Budgens was the most enthusiastic, to the extent it immediately commissioned a detailed demographic survey and then put together a business plan. It said the site was absolutely red hot in terms of the demographics and encouraged me to take up a two-year supply deal.
“We put together a great team for the development and that is one of the reasons why we have a fantastic facility of such quality. It is also one of the reasons why the business went from £37,000 in the shop on the first week to £47,000 within eight weeks.
“Our initial target was £30,000 for the first year, £45,000 for the second year and £50,000 for the third year. Hopefully by the end of the year we may even see £50,000 within eight months – our three-year target!”
The official opening was on May 26, and was accompanied by three weeks of advertising on local radio. “We hit the ground running,” stresses Mike. “Budgens’ marketing was excellent – Roger Black came down to open the store, and that was terrific. Loads of girls turned up from the local school – he had his own little fan club there.
“The response from the locals has been incredible. They’ve all said, ‘about time, this is exactly what we needed’. They ‘re buying everything – fresh, chilled, frozen. The hot food counter has done really well, and in winter that is going to be brilliant. We’ve already put in a second oven in anticipation that come the autumn, we will certainly see a major ramp up in hot food sales.
“We get about 20,000 cars a day on the Guildford-Horsham road – the A281 – and about 4,000 local traffic. With the school right behind us we sell about 400 pieces of confectionery every day. The school runs also result in buying fuel and the evening meal so it works really well.
The petrol side runs smoothly – although I was naïve to think I would have full support from a major corporation, because when problems developed it tended to be the opposite. “But overall, after two years in the business I’m absolutely delighted. It’s almost unbelievable. All I’ve applied is common sense. It’s not rocket science.”