After his first year in business Ian Foster has at
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least four reasons to be cheerful—his four trucks are all paying their way and the work keeps flowing in. Nicky Clarke talks to a bright young man in celebratory mood.
Ian Foster has good reason to celebrate. Many one-man bands fail to survive their first year of operation. And of those that do, few can boast the sort of success that Foster—still the right side of 30—has enjoyed in the past 13 months.
Foster set up Anglo-European Services (UK) last January with a single vehicle, running his business from his spare room. Now he operates four trucks on weekly UK and Continental runs out of an office in Milton Keynes.
He had always wanted to drive lorries but while he had to wait for his 21st birthday to get his HGV licence, Foster began his driving career at 19 driving buses around the Kent countryside. Then, while visiting his family in Buckinghamshire, he was shown an advert for a job driving a 7.5-tonner with Tring-based haulier JR Smith. "I started the job one week later," Foster recalls. "I was there for six or seven months when they put me through my Class 1 licence and I started driving an F10 in the UK. Then I went to Italy, Greece and Austria which I thoroughly enjoyed.! liked the independence and everything was a challenge."
New direction
He worked for JR Smith for six years, mainly driving 7.5-tonners throughout the UK on general haulage "giving them my all, when !asked myself 'do I want to do this when I'm 50?' I wanted a new direction. Let's go and buy a lorry, I thought."
Foster bought his first vehicle, a left-handdrive Mercedes 1838 4x2 ,from his employer (it still runs in JR Smith colours). Its registration is L5AES and, taking the last three letters as initials for his company name, AngloEuropean Services was born. Six months later he bought his second truck from JR Smith; an H-reg Mercedes 2448 6x2 which he had driven from new when he worked there.
JR Smith supplies Foster with around 20% of his work, carrying loads for blue-chip customers throughout the UK and on the Continent. Foster employs five local subcontractors on this work.
Commitment to his former employer runs far deeper than his subcontracting duties; "If it wasn't for them I wouldn't be where I am now," says Foster. "They helped me by giving me early payment terms".
This is key to Foster's success: he knows that cashflow is vital to keep his business breathing. In fact most of his customers give him early payment terms. JR Smith pays him monthly while another customer pays him every 10 days—for a discount of 3.5%.
"To be honest I don't mind it," says Foster. "Without this to start with I wouldn't be able to survive. When you have to wait 45 or 60 days for your money you need a hell of a bank balance to start with. That's what it's all about. The money's always there, otherwise I wouldn't have been able to build up the vehicles."
Unlike many hauliers, Foster is full of praise for his bank manager (in this case at Lloyds' branch in Aylesbury, Bucks): "He has been a tremendous help. Before I commit myself to another vehicle we sit down and he advises me. He also did a business plan before! started."
Company accounts for his first year are not yet complete, but Foster reckons he had a turnover of around .£550,000 on which the profit "isn't large because I invested in new equipment. As soon as I got money in I put it into a deposit on another vehicle." he explains.
Not that it's been plain sailing. All his vehicles are financed with a mixture of hire purchase and three and five year leases. "As a person starting out on my own I had to work very hard to get the finance," he says. "I wasn't prepared to give all the guarantees they wanted," which included his house. Then he came across Close Asset Finance in Surbiton, Surrey: "They were brilliant. They sat with me for two or three hours and said 'we don't think there's a problem'."
Old habits
Foster does all his own paperwork and his girlfriend looks after the company accounts. Old habits die hard and he still keeps his hand in with driving by stepping into the breach when one of his drivers goes on holiday. "I keep an eye on when things need to be done," he says. "The drivers check their own vehicles' oil and water but I've got this habit; I check the oil too. I still have to do it. I'm hyperactive...I can't sit still."
This interest in the vehicles helps him motivate his four drivers. "They couldn't be better," he says. "They're clean and smart and look after their vehicles. I like vehicles to be looked after." Maintenance is contracted out.
Foster has just taken delivery of his fourth truck, an FH12 XL Globetrotter from Kelberg in Bicester, which he'll be entering in the Peterborough Truckfest in May, and this year he plans to buy three more: "[want to keep things going forward until I don't want any more vehicles," he says.
"I'll be comfortable with eight or 10, then I'll call it a day. I'm quite happy doing what I'm doing. It hasn't been easy and it's not easy now, but the work's been there, and that's brilliant."
MAKING CUSTOMERS PAY
Ian Foster is lucky in having customers who pay promptly because late payment and the consequent cashflow problems it results in are one of the most common causes of small business failures. But New Labour has plans in train to introduce legislation to help tackle late payment, including giving businesses the right to claim interest on the late payment of commercial debts.
The legislation will be in three Phases: • Small businesses will immediately be able to claim interest against public-sector organisations; • After two years they will be able to claim against all large enterprises; • After another two years they will be able to claim against all businesses.
"The Bill will prevent "contracting out" of the legislation by dominant customers setting excessively low rates of interest or long payment times in their contracts," says Small Firms Minister Barbara Roche,
ANGLO-EUROPEAN RVICES (UK)
BASE' Milton Keynes, Bucks.
FOUNb1 January 1997.
CONT, Ian Foster, proprietor.
FLEETour tractive units. Most recent is a Volvo FH12 XL Globetrotter 4x2 with air conditioning and hush kit to meet Austrian regulations. All vehicles are financed.
Groupage loads throughout the UK and to the Continent.
£550,000.