Iain Worthington is founder of Red Box Recorders, which provides software-based voice recording for organisations worldwide in sectors such as financial services, public safety and contact centres.
Q: How did you come up with the idea for your business?
A: It was less an idea and more seizing an opportunity. I was working in a small team of software and hardware developers on a project to create a document processing system in the days when nothing of its kind existed. It all happened very quickly around Christmas 1988 when myself and two colleagues offered to develop the system for the current backers bypassing the incumbent management team. To our surprise they said yes, and two days later on Christmas Eve we had a company registered and had our first office. The £1,000 rent and deposit for the office was drawn on a credit card!
Developing hardware and particularly software during the early days of the industry was exciting if not a little frightening. By far our biggest piece of luck, something every business needs, was meeting Racal Recorders Limited who at the time were probably the market leader in reel-to-reel voice recorders.
Q: What are three frustrations you experienced when setting up Red Box and how did you solve them?
A: There are many frustrations when running any business, particularly when you work in a niche market. However, for me the three main frustrations have been; finding the right people, the mind numbing bureaucracy associated with employment, and banks.
Firstly, businesses are all about people, so building the right team takes time and patience. One person can make a significant difference in both a positive or negative way, and the way a business deals with this can contribute significantly to long term success. Not everyone can build a team and the challenge for any successful business is to identify people that can make a difference and help them grow.
Sometimes the bureaucracy surrounding employment makes you question why you do it, which leads me to my second frustration. In the early days the onus is on the owner/manager to tread a very careful path through the minefield of legislation. My solution to this problem has been wherever possible to get the best advice you can afford – it is a false economy to plough on regardless.
Finally, there remains a big gap for growing businesses in the £100k - £500k bracket for working capital. The banks like to portray that they understand your specific business, but in my experience that is rarely the case. They like to pigeonhole you so that they can measure you against a norm. My solution to this has been to manage the cash flow of the business down to the last penny. As you grow, the ebbs and flows get bigger but the need to control becomes greater.
Q: You work in a sensitive industry. How have compliance and legal issues affected how you run your business?
A: In most cases, compliance tends to help the business because our customers need to meet the requirements of legislation regarding the recording of calls in order for them to operate in their markets. However, from a legal perspective there are some jurisdictions around the world where recording of calls is simply not allowed, or only one party of a call can recorded.
In addition, there is a legal requirement for some of our staff to be vetted in order to carry out roles on certain key customers' sites. A concern with this is that although some authorities are linked they do require separate processes, which can often result in duplicated effort.
Q: What steps do you take to understand your customers' needs?
A: This may sound very simple but the answer is to listen. Many people think selling is all about talking, but it is critical to listen to what your customers are saying as well. Feedback from customers whether positive or negative is vitally important to any business as failing to act will ultimately cost you their business.
Q: How would you advise someone with a great product and no marketing experience to proceed?
A: There is the old saying that says that 50 per cent of a marketing budget works whilst the other 50 per cent doesn’t, and the problem is that you don't know which is which,h. Marketing is an art and not a science. Sit down and think about how you would look for your products and services and that should narrow down where you should be targeting your spend. Always plan for an ongoing campaign possibly over several weeks – a one-off placement seldom works in my experience. Don’t lose your nerve, just because nothing happened five minutes after a publication appeared doesn’t mean that you are not getting the message across. If your budget can stretch to it, use as many forms of marketing as possible. Remember, the world of marketing is a very different place today than it was five years ago.
Q: Best and worst business advice you’ve ever received?
A: I have to admit to struggling with this question. Over the years there have been many pieces of advice that with hindsight changed, invariably they seemed good at the time. For the best, I would say being hounded by a recruitment consultant at a trade show who insisted he had found exactly the right person to move us forward: it turned out that he had! I am not sure I have a worst, as usually advice is given in good faith.
Q: What three pieces of advices would you give to entrepreneurs currently starting a business?
A: Employ the best people you can afford; keep your eye firmly on the profit and loss and in particular cash flow; don’t take the knocks (and there will be some) personally; if it feels right it usually is.
Q: What are your plans for the future?
A: Despite all the red tape and bureaucracy it is still a thrill to be able to grow a business and provide employment for an increasing number of people. For me, the company has consumed virtually all of my working life, and I hope that it continues to do so for many years to come. There are many challenges that we face as we grow, but being able to overcome them as they arise is part of what a successful company is all about. It is not all about financial success, although that helps, it is about stability, brand awareness, opening new markets and accepting that things do not stand still – there is always change, you just have to embrace it.
Q: Why do you think your company has become successful?
A: Sometimes I look at companies that are clearly successful and have to admit I do not understand how. From my perspective it comes from hard work, a fairly big slice of good fortune, and having a team around me that shares my values and goals.