How Richard Peel scaled his outsourcing business
We chat to the director of AFP Services Limited
Company: AFP Services Limited
What it does, in a sentence: Provides outsourced back office and accountancy services
Founded: 2002, Northamptonshire.
Founder/s: Richard Peel
Size of team: 32
Your name and role: Richard Peel, director
What problem are you trying to solve?
Business leaders are brilliant at the core function of their business, whether it’s selling; marketing or cooking, but not all business leaders know how to effectively run the back office of their business (and why should they? I don’t know how to rewire a house – I get in an expert). Our area of expertise is the smooth running of back office and finance departments, allowing our clients to focus on what they do best.
How big is the market – and how much of it do you think you can own?
The market is bigger than I can count up to! And we’re only looking to own a very small percentage of it, we are into quality rather than quantity.
How do you make money?
We normally charge our clients an all-inclusive monthly fee, which can change depending on growth. This means that our fees are flexible, growing when our clients grow. Over the years we have found that this offers the most resilient, value for money service. We hate charging by the hour – we do a full job and if that takes longer than we thought, that’s our problem.
Who’s on your team that makes you think you can do this?
32 professionals, covering all levels from FD to order processing. Our clients only pay for the skillsets they use – but as we have all levels we can provide a complete end to end service, catering to a wide variety of business needs.
How do you keep your clients happy?
You don’t have to have all of your business functions in one place and what you really don’t have to do is to pay expensive London rates to house your back office functions.
We run lots of clients that have their finance and supply chain departments 60 miles North of London – in our office, staffed by our staff but working for our clients (we even pick up the phone and say, Hello “Client A” Can I help you?”)
Who’s bankrolling you?
No one – we are profitable.
What advice would you give other entrepreneurs trying to secure that kind of finance?
Some industries require high levels of capital to go to market, however service companies operate differently. I would advise anyone looking to bring debt into their companies to think hard before committing.
What do you believe the key to growing this business is?
Our people are the absolute bottom line of AFP, we have invested heavily in recruiting, training and retaining the best talent on the market. We believe in promoting from within, and sharing our successes with each other- fostering a community of talented individuals who all contribute to pushing the company forward, is the key to the growth of the business.
What metrics do you look at every day?
Each day I look around the office and I count how many of our staff are smiling. Then I look at our prospects.
What’s been the most unexpectedly valuable lesson you’ve learnt so far?
Get the best staff you can afford – they will be worth it.
What’s been your biggest mistake so far?
In the past I went with a recruitment company that charged a low percentage fee, but of course their fees were lower than everyone else because they were cutting corners. Since then I’ve realised it’s more important to trust your gut, and form good relationships with the people you’re hiring to source talent for your business.
What do you think is on the horizon for your industry in the year ahead?
New technology, especially digital tech, is driving the market at the moment. Our clients are hungry for more analytics, and we keep on top of this by researching and investing in the latest technology to translate the data for them.
Which London start-up/s are you watching, and why?
Nut butter enthusiasts Pip & Nut are based in Hackney and have seen some incredible growth over the past 12 months. I’d also say Housing Hands, they’ve got a fantastic, innovative product and we feel we can really add value to their business. Of course, there are a few who haven’t started yet, but we know they will be soon – we’re helping them!