Fri, 09/11/2018 - 07:40
Current Issue 34
Life in the Fastener Lane
Starting out as just an idea and a laptop in 2007, Scott Simpson has grown Auto Fasteners into a professionally established supplier for OEMs around the world
Writer: Tom Wadlow
Project Manager: Thomas Arnold
For a 22-year-old business owner about to enter his second year of trading in 2008, waking up to news that the global financial markets had collapsed may not have been the most welcome of events.
It is difficult enough to build a sustainable business from scratch. Despite the huge numbers of fledgling companies setting up in the UK, statistics show that around eight in 10 of these startups fail inside 12 months.
For Scott Simpson and Auto Fasteners, the 2008 crash could quite conceivably have signalled a premature end to an entrepreneurial dream.
However, fast-forward a decade and the firm is now recognised as a tier one supplier of fasteners and specialist small parts for some of the world’s largest vehicle manufacturers.
Still based in Simpson’s home county of Warwickshire, in Southam, Auto Fasteners now stands as a £4 million enterprise with a global supplier and customer network and is currently on target for sales of nearly £6 million in 2019.
“Nothing beats the feeling of seeing your perseverance pay off with an order from a globally recognised company,” says Simpson. “Constant communication, travelling the globe for meetings, dealing with rejection – it is all worth it when that deal comes through.”
Simpson’s story begins in 2007.
Armed with nothing but an idea and a laptop, he set about securing his first customer and through sheer perseverance secured his first order with Jaguar.
A part-time venture quickly became a full-time occupation, and within six months more customers were being added to the books. By the end of year one, Auto Fasteners had conducted £38,000 of business, with Simpson still the sole employee.
“I started the business from the corner of my spare bedroom,” Simpson says. “I thought, given the fact this was a small volume niche, that I could do this in my spare time to earn some extra money.
“Half a year later I had picked up a couple of new customers and found myself devoting all of my energy into it. I remember storing parts in my wardrobe, packing them in the living room and delivering them on my lunch break to the customer.”
Foot on the accelerator
A lack of social life would characterise the next two years of Simpson’s life.
As more clients came on board and supplier networks established, the owner found himself operating on an almost 24/7 basis in order to accommodate Asian and American time zones.
The devotion to the task reaped rich reward as, despite the onset of the global crash in 2008, Auto Fasteners enjoyed unprecedented expansion, morphing into a fully-fledged business in terms of sales and company assets.
“The major break came when I secured contracts with a supplier to Ford and GM in America,” says Simpson. “I went over to Detroit to visit the customer, and the business snowballed from there – all of a sudden, we were supplying North America.
“For me this is one of my biggest achievements, for a small company to be supplying a US giant, and now directly to several OEMs. There are far larger companies out there turning over tens and hundreds of millions a year who cannot say that.
“It has all been about persistence. We are now supplying directly to Ford Motor Company, for example, and that has taken eight years to materialise. These types of companies are reluctant to add more suppliers, and new suppliers go through an extremely rigorous audit process – you really have to sell and prove yourself to them.”
Auto Fasteners moved into its first premises and put £20,000 towards renovating it in 2009 in what was another milestone event for the business. “At this point it was still just myself,” Simpson adds. “I was quoting, purchasing, paying suppliers, doing deliveries, packing, quality inspection and everything else that goes with it.”
The Company’s first hire was made in 2010, allowing Simpson greater freedom to concentrate on selling his product, maturing his supply chain and driving further growth.
“I was getting deliveries piled up in my back garden, so I rented out a patch of office and warehouse space from a local water cooler company. I spent a couple of months there before the warehouse renovation opportunity arose in 2009.
“I didn’t socialise for three years, slept on a camp bed at my Dad’s house while renting out my own property – I lived and breathed the business.”
This unrelenting activity saw Auto Fastener’s year two revenue jump more than twentyfold to around £770,000, all achieved against a backdrop of a recession economy, and with only two employees.
Today, Auto Fasteners comprises a team of 11 people based in Southam. Three adjoining warehouses form the nucleus of £4 million of annual business, with parts shipped to customer plants to more than 25 different countries around the world.
Simpson is currently in the process of purchasing a new plot of land, also in Southam, that will house a new custom built 35,000 square foot warehouse, three times the 12,000 square feet of space currently at the Company’s disposal.
“Not only are we adding new customers to our list, but we are also winning new business with our existing customers and those who we have been with since the beginning,” Simpson says. “We are growing steadily year by year, and our new custom-built site will provide the space we need to continue to grow and expand into the future.
“We are continuously investing back into the business to keep moving forward. For example, we are in the process of obtaining the German automotive standard VDA 6.2.
We will be one of only two fastener companies in the UK to have this accreditation and this will allow us to further develop our relationships with our German customers, such as VW, Audi, Mercedes etc.”
This begs the question of how far Simpson wants to grow Auto Fasteners.
Despite the temptation to keep his foot firmly down on the pedal, he also recognises the need to stay true to the business’s founding principle of flexibility. After all, the success of Auto Fasteners to date is grounded in the fact it is nimble enough to navigate the nuances of the automotive industry.
Aftermarket = big business
For automotive manufacturers, aftersales services represent a vital series of revenue streams that they cannot afford to be without.
Indeed, according to a 2010 report by French consultancy giant Capgemini, in Western Europe during a typical 15-year lifespan of a car, only 37 percent of the total revenue an OEM receives can be attributed to the initial sale of the vehicle.
The aftermarket offers a major opportunity to drive profits by maintaining customer loyalty beyond the upfront sale. Worldwide, the automotive aftermarket was worth $335.23 billion in 2016, with steady growth expected through to 2025.
The UK market in particular is thriving. A study by Frost & Sullivan found in 2017 it turned over £21.1 billion, supported more than 345,000 jobs and contributed £12.2 billion to the country’s economy. By 2022, the UK automotive aftermarket is expected to be worth £28 billion.
Auto Fasteners plays a keep role in the smooth and efficient running of many OEMs thanks to its reliable provision of fasteners and spare parts on demand as and when they are needed.
Further, these parts are often needed in different packaging or supplied as specialised kits, made up of components from several different manufacturers. This is where Auto Fasteners and its flexible setup come to the fore.
Persistence pays off
From a start-up moving headfirst into a global recession just a year after opening its doors for business, Simpson may not have imagined that 10 years later he would be in the enviable position of deciding how much to constrain his ambitions for growth.
Auto Fasteners’ story is a testament to its founder’s refusal to lie down, an example to all budding business owners of how to navigate successfully through organisational growing pains and an unfavourable economic climate.
For Simpson, importantly, his relentless work in the Company’s early years has allowed him to regain a work-life balance that works both personally and professionally.
“My main responsibility now is to bring in new business and to keep in touch with clients to make sure they are happy,” he says. “My amazing team handles the rest. I will admit it has been hard to let each responsibility go, but I now enjoy a more balanced life and am as passionate about the Company as I was when I started it”.
Simpson signs off with some sound advice for others who may find themselves in the position he was a decade ago.
As with Auto Fasteners as an entity, there are simple principles he holds as key to ensuring success.
“The first is to persevere,” he states. “This has been my biggest challenge in getting to where we are now. Continuous perseverance.
“This has to be backed up by endless research and ensuring you know your market inside out. Combine this with absolute passion, and you won’t go far wrong.”