Growing a multi-million pound company in 18 months: The story of Spencer Ogden

With a current monthly turnover of £2m after only 18 months in business, Spencer Ogden is one of the fastest growing recruitment companies. Co-founder David Spencer-Percival explains how he took his business from a standing start to a multi-million pound enterprise.

David Spencer-Percival was successfully working in recruitment when he met Gary Laurence in the unlikely setting of a carpark. The two came together to form Huntress, a recruitment business that turned into an award-winning, multi-million pound company after only seven years

Graphite Capital, a private equity firm, backed the pair and invested £4.4m into the business, although only £2.2m was eventually used. Spencer-Percival and Laurence planned to split the company between a traditional model and a new online recruitment portal but they disbanded plans for an online arm following the crash of the tech bubble three months later.

Selling a business
In 2007, after seven years building the business and at the peak of his career, Spencer-Percival sold Huntress to Nomura, a Japanese investment bank, for just over $100m. “We felt the time was right to release some shareholder value and backers wanted to sell,” he explains.

“We were very lucky with the timing. We had no idea that the economy was going to collapse three months later and sold the business when it was top of the market. We’d worked together for seven years, the board was a bit fructuous and the investment had run its course,” says Spencer-Percival.  

After selling the company, he knew the project was finished and in a bold move walked away from what he describes as a “phenomenal” income. “When you sell a company it’s a huge emotional transformation – you don’t own the business anymore, it’s not yours to play with,” he says.

“I didn’t leave because of the change of ownership; I left because I was absolutely exhausted. I’d worked extraordinary hard and made a lot of good money but the project was finished. Instead of having a relatively small percentage of the equity I wanted to own my business outright without venture capitalists owning 50% of the equity and the rest shared between a number of people,” says Spencer-Percival

Following a break, the entrepreneur found a new partner in Sir Peter Ogden, founder of £3bn turnover business Computacenter, and in 2010 the two came together to form energy recruitment company Spencer Ogden. The challenges of working in a completely new sector reignited his entrepreneurial passion but the second round of entrepreneurship was in no way easier than the first, he explains.  

Regulatory burdens
“I had rosy-tinted glasses about the setup at Huntress as I went into this new venture. When I started this I realised how complicated it is to start up a business in this country. There’s so much red tape since the last Labour government –setting up a business has become hard, complicated and expensive,” he says.

He explains how the regulatory complexities extend to staff and the challenges small firms face when they want to hire or fire employees, particularly in the sales environment. National Insurance for employers is huge, he adds, and the regulations provide no incentive for businesses to create jobs.

Spencer Ogden, even at its formation, was no small start-up, however. Spencer-Percival and Ogden each ploughed £1m into the company and employed 25 staff from the firm’s inception. The number of staff has more than doubled and Spencer Ogden now has 85 employees and five offices. 

Quick to note his incredibly fortunate position financing the company, however, he explains that without the cash Huntress had to afford lawyers and qualified staff, the challenges starting up the business would have been insurmountable.

The two later approached the bank for further financing: “We tried to access finance at the point where the government had Project Merlin under its belt and were forcing the banks to lend to small businesses,” says Spencer-Percival.  

“Access to finance for us wasn’t a problem. Sir Peter Ogden is a very high-profile businessman and they would have been embarrassed to say no given the amount of investment that’s gone into the company. But I have a number of friends with smaller businesses that have found it incredibly difficult,” he says.

Asked what he thinks are the best alternative measures to finance when the banks refuse to lend, Spencer-Percival triumphs the role of angel investors. He explains that recruiting an investor will bring not just a monetary partnership but also someone with an invaluable amount ofexperience.

“There are a lot of people out there who have an awful lot of cash sitting in a bank not making them much money and the really bright guys out there know if they risk a small amount of capital, although the risk is very big, the returns are huge in start-up businesses,” he says.

Spencer Ogden has experienced a fast, yet steady growth and in 2011 the company turned over a phenomenal £19m. “Our turnover’s gone from a standing start to turning over £700,000 a month after 12 months and turning over £2m a month after 18 months,” Spencer-Percival explains. 

Cashflow
Spencer-Percival details the importance of cashflow when starting and growing a business. Identifying when your business needs cash and finding ways to secure that investment is fundamental in ensuring your business becomes a success, he says.

“Through both the business I set up, Huntress is a great example of this. We nearly ran out of cash so many times at the start but we had a really good backing that helped us.

“Be bold, work hard and all of those things but keep a very tight rein on cash,” he says.