What happens when your business grows fast and your workspace is quite literally bursting at the seams. The only option for IT managed services provider, HW Technology, was a move to larger premises – and soon. We learn how, with support from RfM, HW Technology overcame the challenges of finding, funding and fitting out their new premises in 2019.
HW Technology specialises in providing strategic managed IT services and support to businesses who do not have their own, in-house IT function. Their mission is to take away the hassle of technology and IT so that clients can focus on running and growing their business. The team takes pride in getting to know their clients, enabling them to put in place IT strategies and systems that best support their clients’ business aims. HW Technology are specialists in the Professional Services sector and have been providers to RfM for over 10 years.
In 2018, following a period of rapid growth, the directors of HW Technology realised that their current premises would soon be too small for the business. An increase in employee numbers meant that they were literally too big for the square footage of the building. If growth continued at the same pace – and the business plans indicated that it would – the only option would be to move to larger premises. This prospect brought a number of challenges for the business:
- Challenge 1: Finding a space that was the right size – for now, and to accommodate anticipated growth in the future. Six years ago the staff numbered around ten; in the last year, this had increased to 30 people and counting…
- Challenge 2: Finding a building in the right location. HW Technology’s staff were happy with the current location in Chorley, with its good links to other towns and easy commute.
- Challenge 3: Being in the right position to buy, at the right time. With so few suitable commercial properties on the market, buyers have to be ready to move quickly or risk missing out.
- Challenge 4: What would be the most appropriate and tax-efficient way to fund the purchase, fit-out and move to a new building?
In November 2018, the pieces began to fall into place. “We found a property that was the right size (with room to grow) in the right location not far from Chorley,” explains HW Technology Director, Mark Tunstall. “We had lost out on a property earlier in the year so we knew we’d have to act fast… We made an offer which was accepted before it even went on the market.
“Our preferred timeframe to complete was four months, which was very tight in legal terms.”
It was in overcoming Challenge 4, funding, that RfM Accountants would add the most value. Mark knew that using pension funds to help buy the property was an option. He also knew that the rules around such an approach were complex.
“There are very specific rules that must be followed when accessing a pension fund,” advises Mark. “For example, you can only have a small mortgage of up to a third of the property value and VAT rules for using a pension scheme are also complicated.
“The property we were purchasing was also being sold by a pension scheme – so the deal was by no means straightforward.”
Lee Tomlinson, Client Manager at RfM was able to introduce the directors to an IFA with specialist knowledge in this area. He also provided an introduction to a trusted contact at the bank. Working together, the accountant, the IFA and the banker effectively became a support team to Mark, providing expert advice and helping to move the process along.
“Our aim at RfM is always to help a client find the most effective solution to their business problems – and take away as much of the pain and hard work as possible,” says Lee. “In this case, the solution was to bring together the right group of advisors who worked behind the scenes to share information, monitor progress and keep things moving.
“As a result, the process of securing funding from the pension fund and a new mortgage ran much more smoothly than it could have, and I like to think that we took at least some of the pressure from Mark’s shoulders too!”
A great partnership
Ultimately, Mark was able to secure funding for the purchase of the building as well as the cost of refurbishing the property to meet the specific needs of the business. The purchase of HW Technology’s new home was successfully completed on 1 May 2019 and the team moved in on 15 July. Everyone is delighted to be in the new building which has been purpose-fit to meet the needs of this growing technology business for at least the next six years.
On HW Technology’s plans for the future, Mark says, “The company now has 31 members of staff and four vacancies, so the growth continues. We hope to realise our growth ambitions to have 50-55 staff and £5 million turnover in six years and our relationship with RfM will help us to achieve this.
“Throughout this process, I felt that Lee and RfM were always on our side and doing what they could to ensure the transaction was completed in the best possible way for the business.
“Lee takes time to listen and understand where you are going. He was able to put us in touch with the right people at the right time to get the project over the line. Lee and I share common values and work in a similar way so it has proved to be a great partnership.”
Lee continues to support HW Technology as they enter this new phase of growth. “The bank and your accountant are the two most important advisors a business can have,” says Lee. “A good advisor will act as an extension of your team, and be as committed to the success of the business as the owners themselves.”
Do you have plans to grow your business? We can help with all aspects of business growth, from developing a growth strategy to securing funding and grants. Please contact the Partner at one of our offices or enquire online.