With products in more than 35 countries in four continents, new grain-free UK pet food brand Canagan is gradually building a strong global following. Here, founder Eddie Milbourne tells Business Advice how he maintained his firm’s startup culture during a period of rapid expansion.
From the moment I founded Canagan in 2009, I was chomping at the bit to grow the company on an international scale. Where now exporting to 35 countries and the business has a projected turnover of 26m in 2018, and the company’s success is down to its small business mentality and founding principles.
Larger businesses may have the advantage of lower production costs and greater bargaining power, but there is plenty they could learn from how small businesses operate.
Efficient and well-focused, good SMEs boast strongly defined core values, excellent customer service and a skilled core team. The challenge facing all business founders with an eye for expansion is how to preserve this startup culture and mentality, whilst growing and scaling effectively.
I believe investing in people is at the heart of a startup culture and should be the priority for any entrepreneur. While employees can get lost in the corporate structure of larger firms, small business employees are the key to driving your business forward.
Startups usually attract the right talent because they appeal to people who share your passion for entrepreneurship. You will benefit from employees who have a more rounded skill set, rather than the specialised one that is normally found in employees of larger companies.
Valuing the individual is the most important thing to retain when scaling up. A high employee turnover is something a small business cannot afford if it is to be successful.
Canagan, for instance, still only has 22 members of staff, including some who have been with the company for over 15 years and a company-wide bonus system rewards every staff member when sales targets are met. If you look after your staff, they will look after your business in return.
Another problem you may face when you grow is interest from investment or from the larger players in the market.
When the drinks company Innocent was founded in 1998, it was done so on the principle that it would be environmentally friendly and always contribute at least 10 per cent of its profits to charity. Yet, after Coca-Cola bought a 100 per cent stake in the company, profits plummeted by 97 per cent to a chorus of criticism.
To the credit of the owners they stayed true to their commitment of donating to charity. But, did they lose the thing that made their business special and drove their original growth? How many loyal customers were put off by such a move?
Consumers realise that paying less for something made by a giant, faceless corporation is often less rewarding than paying more for something made by a smaller company.
Maintaining founding principles and the USP that sets your company apart are vital for continued success. Consumers like to see businesses supporting a good cause and this should not be lost as you grow.
Parting with your business can mean losing a lot more than a monthly income, and most takeovers will involve you as the founder staying on in some capacity, to ease the transition.
At Canagan, we have never stocked supermarkets or large retailers or pet store giants. This is largely due to the fact that in the 1980s, the Milbourne family pet shop was’severely affected as a result of Sainsbury’s opening up a large store in the area that sold pet food. Within weeks, we had to let go of four members of staff, and the shop’s market for canned pet food was lost.
We made the conscious decision to trust in the more knowledgeable independent retailers who build relationships with customers looking for a higher quality diet for their pets.
Given the dubious nutritional standards in the pet food industry, this is both ethical and good business, as a company that lacks social responsibility is unlikely to last long in 2017. News of poor customer service or poor-quality products can simply travel too quickly to too many people.
That’s why we still involve ourselves in the customer service part of our business, just as we did when we first began. Empathising with your customers comes easy at the beginning, but maintaining that direct relationship puts Canagan at a serious advantage over larger competitors.
People rarely use customer service more than once, and a good experience can mean a customer for life. Speaking to a CEO goes a long way in aiding the customer experience.
It can be daunting heading into a market with giant corporate competitors, but it’s clear SME’s have strengths which can put them ahead of the game, such as higher quality products and a better customer experience.
Being your own shareholders means the values and principles that founded the company don’t need to be sacrificed for growth. Rather, they can be the driving force behind it.
Eddie Milbourne is the founder of Canagan The recent winner of the Queen’s Award for Enterprise and twice voted Suppler of the Year by Pet Production Retail Association.Small exporters report three-year sales peak as domestic confidence tumbles