Advisor to the Board of Redsquid Communications, Andy Tow, aims to realise £25 million turnover within three years, and it's a prize he is certain to lay his hands on. Here's how...
For a man who stumbled into telecoms 16 years ago Tow soon found his feet. Straight from studying Law at university he joined Vodafone (then Racal Electronics) in 1985 in a temporary telesales role. Since them, two strands can be traced throughout Tow's career - an allegiance to Vodafone and a knack for rapidly growing businesses. "I've led a number of IT, telecoms and technology companies towards achieving growth while undergoing strategic change," said Tow, who joined Redsquid in April this year. "As CEO and more recently Board Advisor, my remit is to grow the organisation four-fold. Staff numbers are currently 40 but will increase to over 100 within the next three years as we target a forecasted turnover of £25 million. Gross profit and EBITDA are expected to grow at a faster rate as economies of scale kick in."
Redsquid recently added its 750th customer and turnover is forecast to exceed £6 million this year. To help achieve his growth ambitions Tow quickly strengthened Redsquid's Board with the appointments of Andy Coughlin as Non-Executive Chairman and Nick Grime as Sales Director. And in acquiring the adjacent premises Redsquid upped its square footage by 50 per cent, knocking through to create one large open plan office. "That's more than enough space to house our expansion," stated Tow.
Redsquid Communications was founded by Sohin Raithatha and Vince Mignacca in 2006. After leaving their jobs they set up shop in Mignacca's spare bedroom. One month later the first customer was signed and a move to a small office in Finchley soon followed along with their first employee. Redsquid then relocated to a five-person office in Borehamwood in 2007, and within three years of starting up had become a Vodafone Gold Unified Communications Partner with annual turnover exceeding £200k. Two years later the company made its first acquisition, adding the mobile subscriber base of Boscomms.
In 2010 Redsquid was elevated to Vodafone Platinum Partner status with turnover rising to more than £1 million. Fast growth prompted a move to its current offices in 2012. Turnover a year later registered £2.5 million, and in 2015 Redsquid secured the acquisitions of 5Com Airtime and 5Com Network Services, expanding its customer base and headcount. Last year the company was awarded Total Communications Partner status by Vodafone.
"The acquisition of 5Com was transformational," explained Tow, who was formerly Avenir's Managing Director. "It was entirely self-funded and enabled Redsquid to clearly see the benefits of cross selling and upselling, tripling the sales of both businesses' fixed line telephony inside two years. This strategy is part of the criteria now being employed to further grow the company, especially in the IT managed services and traditional fixed line reseller sectors."
The customer base is almost exclusively SME with a sweet spot of circa 200 employees. "Our target customers are in the mid-market, those organisations large enough to benefit from our range of services and who are likely to take multiple products," explained Tow. "We are active in introducing relevant new products and services. For example, we are about to launch a new business unit, Redsquid IoT, and have recently launched our own App Development business building to design and manage smartphone applications for our customers. We can do this by applying a truly consultative sales process that gives us a deep understanding of what our customers do for a living."
Tow also aims to grow Redsquid's traditional fixed line reseller model, increasing the percentage of its own billings through wholesale relationships with carriers. Fast growth is also planned for the IT managed services division. "Growth in this area has been interesting, but making it really exciting will involve acquisitions," noted Tow. "We have two purchases at the due diligence stage now. IoT, app development and recycling are also new services capable of delivering significant growth."
Tow's main priority right now is to ensure his newly developed business plan, that has been six months in the making, is implemented in the most efficient and productive way. This depends in large part on culture, which inevitably takes time to infuse into the Redsquid DNA. "Our culture is a vitally important aspect of what we offer to customers and how we deliver it," explained Tow.
"Ensuring our whole team is engaged and empowered to deliver customer service excellence is an essential aspect of that. Picking out two of many examples, we run periodic ‘all hands' meetings to inform and advise staff about current company performance. We also run monthly Director's Lunch meetings where two of the Board meet with two or three members of staff who can ask anything and everything under Chatham House rules, which encourages closer engagement."
A key measure of success for Tow isn't only delivering demonstrable bottom line growth, it is delivering growth from his team by developing them to be the best they can be, not only through close engagement, but also through profit share and annual bonus schemes. The plan is paying off with the firm exceeding its NPS of 90 with an unbeatable 100, and its status as a trusted advisor is becoming ever more entrenched with expertise across the full range of telecoms, IT and technology products and services.
"Resellers that focus only on calls and lines or just mobility solutions, for example, are not building long lasting sustainable relationships with their customers," observed Tow. "Our opportunity is to bring all services under one roof and provide the classic single point of contact, single supplier philosophy to our customers, while maintaining integrity and expertise in all of those elements."
As previously mentioned, a new project is Redsquid Apps, a division that can specify, build, develop and maintain iOS and Android apps for customers to enhance the service they give to their own clients. "Our capabilities are unlimited as apps can be bespoke, but common standard features we have developed include geofencing, online store with full e-commerce check-out and delivery capabilities, product price list management and an online appointment or booking service," stated Tow. "Another growth opportunity is developing our new online recycling service which is available to new and existing customers. Old devices can be recycled and found new homes, usually in third world markets. And we plant a tree in urban areas for every device recycled."
Perhaps Tow's biggest long-term opportunity is rooted in contracted recurring revenues, which are by far the lion's share of Redsquid's gross profit. "This model brings lasting relationships with our customers," he said. "Although robust contracts underpin this - for example the Vodafone OneNet Business UC product is typically a five year contract - the reality is that the more products and services taken by a customer, the longer they will stay with us. This, along with low churn figures in single digits, provides a sound business base upon which additional future services can be sold such as Microsoft Azure and Dynamics. Both of which we will offer as part of our Total Communications Partner status with Vodafone and in line with our current efforts to achieve Microsoft Gold partner accreditation.
"Progressive and exciting activities such as these prompt thoughts that I should have moved into the reseller world sooner. I really enjoy the nimbleness and dynamism of smaller businesses. Being fleet of foot and more able to take advantage of market conditions is great fun and highly rewarding."