PRINCELY SUM
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• Stuart Cornforth can hardly believe his luck. A year ago he was an unemployed reefer driver in Liverpool, which is not renowned for its employment prospects, but he is starting 1992 with a smile.
After all, not every 24-year-old in the area has his own business, and fewer yet can say they're making a go of it despite the recession. But six months after setting up as an owner-driver Cornforth believes he is well on the way to running a profitable operation.
Obviously that success has demanded a great deal of hard work, but Cornforth also had two advantages: the support of his family, and a £5,000 lowinterest loan from the Prince of Wales' enterprise scheme, the Youth Business Trust.
Cornforth has always been driving-mad, and his family have always offered support and cheerful scepticism in equal measure. He was on 7.5-tonners when he was 17 and was given an HGV1 training course for his 21st birthday.
He always planned to form his own company, and losing his job at MKG Distribution was the spur to take the plunge. At first his family, like the banks, did not take him seriously, and for months, he freely admits, he was living off the dole and his fiancées wages.
But Cornforth spent his time on the dole profitably, drawing up a business plan with the help of Business in Liverpool and sounding out potential customers. His plan was to go in at the deep end, with his own 38-tonner. They don't come cheap, but by the time he applied to the trust, he had enough background to convince a three-man awards panel that he could succeed in one of the UK's most precarious businesses.
He talked his way into a loan of £5,000 over three years, with nothing to pay for the first six months, no interest in year one, 5% in year two, and 10% in year three.
Suddenly the banks were more receptive, and Cornforth secured enough to buy a truck — £3,000 from Barclays as a downpayment, financed over three years at £87 a month, and £4,000 from Northwest Securities, over two years at £232 a month. This £7,000, including VAT, bought a B-reg Mercedes-Benz 20.25 6x2 tractor.
Next stop was the trailer. TIP didn't want to know, because of the credit risk, but CTR rented him a good-quality tri-axle flatbed trailer. That gave him initial flexibility to carry non-container loads as required, but with his interest cost soaring to £400 a month, and having specialised in container work, he now plans to buy a used skeletal trailer.
He has a small, secure operating base at a park in Liverpool which is used by several owner-drivers; his space costs him about £100 a month.
Cornforth's main problem at the beginning was that because of his age, shortage of cash and lack of track record, he couldn't get credit from any fuel suppliers. This meant he was buying at retail stations, paying cash at about 44p/litre, with VAT, so the profits were going straight out the exhaust.
By this time his father had warmed to the project. As a retired works engineer he had good contacts with a local fuel supplier, and came up with a small secondhand tank, for £200, to which fuel was bulk-delivered for 33p/ litre. Even on modest mileages, the savings were up to £500 a month.
But Cornforth still found few suppliers who would take him seriously: "They see a 24-year-old with a shiny track suit and say to themselves 'he doesn't know what he's doing'?
Trading as Stuart Cornforth Transport, he started carrying his first loads in early August last year. Having six axles slashed his road fund tax bill, but even so cash has been desperately tight, he says. At first he was only working two or three days a week but he believes that if he had been working full-time he would have run out of cash before any payments came through.
He also admits he greatly under-budgeted his repair and maintenance costs. He'd budgeted £300 a quarter, but has now increased that to £700, with an extra £100 a month for tyres and exceptional items.
His firm was undercapitalised, but Cornforth also had trouble getting payment out of his first main customer, Dublin Ferries. He has wasted little time in taking it to court, and at the end of last month won an award of £1,050.
Cornforth says he would have gone bust had he not found a first class customer. He is now working full-time for CFC Roadways, a local firm which has even paid up early to keep him solvent. Phil Craggs, managing director at CFC and himself a former owner-driver, has stuck with Cornforth because "he is a polite young man with the right attitude. He is prepared to go out and work and the customers like him. I find the new breed of owner-drivers generally have the wrong attitude," says Craggs. "They are not prepared to start at 3am and a lot of them are not prepared to run legally, which is just not on as far as we are concerned. We are going for BS5750 and we check out our sub-contractors very carefully. Mostly, they are small-to-medium-sized fleets. Stuart's biggest problem as an ownerdriver is that he can't set up his trailers with a new load at the end of the day."
The market is unbelievably tight at the moment, but a shortage of trucks will lead to better rates within 12 months, Craggs predicts. When that happens Cornforth should be able to start building the business.
Cornforth's ambition is to own "a good, strong haulage company", with about 20 trucks on domestic and international work, but that's very much for the long-term. Within a couple of months he will be able to pay himself a living wage, but at the moment, he's still only taking out enough to buy his dad a pint on a Friday night.
El by Jack Semple