黑洞社区

There can鈥檛 be many wage slaves who haven鈥檛 dreamed of setting up their own business, even if it鈥檚 only for a wistful five minutes on a wet Monday morning.

The founders of fit-out contractor 8build are among the few who have actually gone and done it. In September 2005, Nigel Bellamy, Steve Oakford and Mick Mannion started out with a borrowed office in the City and an ambition to do things a bit differently.

Now in their third year, they have already smashed their five-year turnover target of 拢25m by 拢7m and were voted entrepreneurs of the year at the 黑洞社区 awards in May. They are on site at a 拢10m office fit-out for British Land at 338 Euston Road, their biggest job so far, and have just secured a 拢40m fit-out for a company in Canary Wharf.

The secret to their success is a mix of worldly experience, industry contacts, and a well-honed strategy based on the principles of Egan and Latham; but its origins lie in general disgruntlement. Bellamy and Oakford reckon they spent about four years talking about all the things that irritated them about the construction industry, and then a year thrashing out a business plan that would set them to rights.

鈥淲e just added up all the frustrations we experienced, analysed each one, thought how it could be done better and worked it into a philosophy from there,鈥� says Bellamy, the shorter and more understated of the two.

鈥淚t was a risk. We were highly paid people in senior positions; we could have kept in that comfort zone and had a nice life. Or we could have done something different.鈥�

If they鈥檇 waited three months longer they would have been due 鈥渂ig bonuses鈥� from their employer. Why not hang on? 鈥淚f you do that, then you end up sticking around for your Christmas bonus and it goes on,鈥� says Bellamy. 鈥淚f you're going to do it, you鈥檝e got to do it. It shouldn鈥檛 be about money.鈥�

Instead, they mortgaged their houses and worked for a year without pay to fund the entire thing themselves.

Constructing the team

We wanted to work with nice people 鈥� they know us with all our faults and we all cover each other.

Of course, the fact that they were highly paid people in senior positions meant they were well connected. In 1989, Bellamy and Oakford were part of the team that set up Stanhope鈥檚 fit-out business, which later became ISG InteriorExterior, and they spent 16 years building it up from nothing to 500 staff. They regularly worked with fellow founder Mannion in his role as client representative for British Land, the blue-chip developer that gave 8build its first job.

鈥淚 think it was a great help that they knew us so well,鈥� says Oakford. 鈥淢ick used to be their rep and we were the team who delivered it, so as far as they were concerned it was: carry on, we trust you.鈥�

The three founders set about attracting an experienced management team, used to heading much larger projects than any the firm has secured so far. This was a deliberate 鈥� if expensive 鈥� strategy to gain immediate credibility. There are eight directors, including Bellamy and Oakford, all of whom have worked together for many years. The directors were attracted partly by the

no-hassle philosophy, and partly by substantial equity stakes in the firm. 鈥淵ou need a strategy to attract the best people,鈥� says Oakford. 鈥淚f you try to do it with salary packages, it鈥檚 a tough marketplace.鈥�

鈥淲e鈥檙e not greedy, we鈥檙e trying to give something back,鈥� adds Bellamy. 鈥淢any companies are founded by one or two guys who hold on to everything as long as they possibly can. We鈥檝e done the complete opposite of that. The guys have come in

with shares, they鈥檙e personally motivated, it鈥檚 their business as well as ours. 鈥滺iring experienced staff wasn鈥檛 the only significant initial outlay. 鈥淭he days of two guys starting up without an awful lot of back-up and systems and procedures in place are long gone,鈥� says Oakford. 鈥淵ou have to demonstrate high levels of competence as a business from day one. In the modern construction industry, you have to have an awful lot of accreditation to be a contractor.鈥�

8build鈥檚 list of credentials include the ISO 9001 quality management standard, CHAS for health and safety and the government's Constructionline prequalification scheme. 鈥淲hen you鈥檙e tendering, there鈥檚 always a question about whether you have ISO 9001, and you have to be able to say you have.鈥�

Putting a plan into action

8build sum up their big idea as 鈥渓ean construction鈥�. With its central ethos of partnering, reducing risk and therefore paperwork, this draws on the Latham and Egan reports in the nineties. However, 8build had the advantage of a completely clean slate to put it into action.

We added up all the frustrations we experienced, analysed each one and thought how it could be done better

Nigel Bellamy, 8build co-founder

8build will do things the traditional way if the client wants, or allow it to choose just some elements of lean construction. Oakford says every client has used some aspects.

The 鈥渓eanest鈥� example to date has been a 拢7.5m job in Victoria for a FTSE 100 energy company, fitting out its head office and dealing facilities. Bellamy says most of the items on their list were taken up: a slimmed down management team, partnering agreements with subcontractors, fortnightly payments and no retention, no onerous contract conditions, just a standard JCT. On certain items, such as services, the client鈥檚 design team has negotiated with the suppliers and 8build has reduced its mark-up to recognise the work they鈥檝e done. As an example of how much money can be saved, one subcontractor has reduced its prelims and mark-up from 15% to 12.5%.

To keep overheads down, 8build employs no estimators, so all the pricing is done by financial management surveyors who stay with the project throughout. There are no project planners either 鈥� 8build has invested in software so can produce all the programmes. Tender pricing is meticulous 鈥� subbies are chased for details so they can begin as soon as the job is won without going back to the market. 鈥淲e price the final account at tender stage, so if someone hasn鈥檛 done as comprehensive a job their price may be lower,鈥� concedes Bellamy. 鈥淭here鈥檚 always that danger but we鈥檝e got a philosophy to maintain.鈥�

Another part of the philosophy is 8build鈥檚 social conscience. It has gone carbon neutral, it is part of the Inspire scheme in Hackney which gives work experience to children who are interested in construction, and it takes at least two graduates a year on its training scheme. It鈥檚 also about to start on a 拢151,000 not-for-profit project for the Salvation Army.

8build鈥檚 founders don鈥檛 know where the future will take them. They had had enough of working for shareholders鈥� targets and are enjoying the freedom of being their own bosses. 鈥淣o matter how much science you try to apply, if you follow the opportunities as they come up it takes you where it鈥檚 going to take you,鈥� says Oakford.

Bellamy says they鈥檝e turned down work rather than risk disappointing a client. 鈥淭he honest approach wins through in the end. We have no borrowings, no other company that has an interest, no overdrafts, we鈥檙e cash positive and we鈥檙e already trading profitably. We have no shareholder to satisfy, or banks that have to be repaid every month. We鈥檙e our own masters really. We don鈥檛 need to scattergun the industry.鈥�

鈥淲e wanted to have a bit more fun; we thought the old way of working was very staid,鈥� says Bellamy. 鈥淲e wanted to work with nice people and we鈥檝e got a nice team ethos going 鈥� all the people here are very experienced, they know us with all our faults and we all cover each other.鈥�

Oakford continues: 鈥淵ou reach that stage in life when you say, 鈥榠f we鈥檙e going to do something, now is the time to do it鈥�; you either do it or you don鈥檛. I didn鈥檛 want to get to the end of my career and look back and say, 鈥榃hat if we鈥檇 given that a go 鈥︹�欌��