Profile: Neil Jagger, founder of Edwin Jagger

It is 1988. A young man working for a manufacturer of silver cutlery sets is
speaking to a friend. They are talking about the shaving razors the man makes
for himself.

The friend casually suggests the man should open a business and sell the
razors. The next day the man resigns and opens up his own company. It’s further
proof that the simplest of ideas often result in the most lucrative and
prosperous of companies.

The man’s name is Neil Jagger. Nineteen years on and the business he started,
Edwin Jagger, is
turning more than £1m and growing at over 30% annually. His company exports some
of the world’s finest shaving razors and brushes to the most exclusive boutiques
in the US and throughout Europe.

It has been an incredible journey. A journey that has taken Jagger way beyond
his original background as a 17-year-old apprentice fresh out of school and into
the heart of finance, accounting, tax, and business management.

Jagger has complete responsibility for the finance function of his business
and has found himself at the coalface of changes to tax policy, increased
regulation, EU directives and sourcing funding.

Rather than resent the additional burden of accounting and finance, Jagger
has thrived on it and come to accept it as integral to his business as the
machinery and products he designs for his 18-man operation.

‘Whenever you design and develop something there’s a cost attached to it. If
you’re going to be brave enough to design you need to know exactly where you are
and what you can afford. You need to know where revenue is generated and
translate that into where you should be investing,’ Jagger says.

Jagger admits that wading into the complex and esoteric world of finance and
accounting has been tricky at times, but says that he has managed by keeping
things simple.

‘I have based all my knowledge of finance on two simple building blocks –
debtors and creditors. You chase your debtors and you fend off your creditors.
When you are running a small business you have to do that to stay on an upward
spiral,’ Jagger says.

He prefers to manage these functions with a small, in-house team rather than
call in outside expertise. All the company’s accounting and finance IT was
implemented by a home-grown group that also provides real-time financial data
for Jagger.

‘I prefer to do things in-house because I find that when you bring in an
expert in a particular area that person is reluctant to delve into all areas of
the business and get their hands dirty. The tendency is to come in and do a
particular job without becoming too involved,’ Jagger says.

‘I am very lucky because I have people who really understand how important it
is to have accurate financial information. Unlike an outsiders, they realise
it’s importance for our relationship with our bank, our creditors and for
sourcing other funding through programmes like the loan guarantee scheme.
Without that kind of understanding you will struggle to survive.’

As a small manufacturer operating in what was once the industrial and
manufacturing heartland of the world, Jagger knows all about survival. British
manufacturers have struggled to remain competitive on a world scale and
financially viable over the last decade.

The lower labour and output costs on offer in emerging markets have seen the
sector leave the manufacturing centre of the UK in droves.

A study by the British Chamber of Commerce in February this year found during
2006 the manufacturing sector had suffered 8,000 job losses. The BCC warned that
rising interest rates, a strong pound, high labour costs and cheap imports would
continue to keep the sector on the back foot.

Yet despite the glum outlook for Britain, Jagger remains very upbeat on the
reputation and prospects of UK goods. ‘I was in Hong Kong a few weeks ago for a
massive international trade fair. A Russian man walked past our stand and was
immediately impressed with the fact our goods were handmade in Sheffield,
England.

‘I don’t think UK manufacturers shout loud enough about the excellent work
that we do. The words “handmade in England” speak volumes. We have an incredible
brand with a reputation for excellence and there are a number of manufacturers
in the UK doing excellent work,’ he says.

Jagger does feel, however, that government can do more to encourage small
manufacturers to grow and export their goods through a combination of tax and
funding incentives.

‘One thing I would like to see is some sort of financial support for
companies that export a certain percentage of their products to grow that export
base,’ he says.

Jagger believes these incentives could be offered through tax allowances or
low interest loans. He also feels that more can be done to inform SMEs about
what incentives and loans are available.

‘We have benefited hugely from the loan guarantee scheme, which has offered
us unsecured loans of up to £70,000 at rates that are better than those
available at the banks. It can be very hard to find that money. It is out there
but those responsible for issuing that funding need to do more to market it to
businesses that could use it,’ Jagger says.

As keen as he is on flying the flag for UK manufacturing, Jagger acknowledges
that the rapid growth of manufacturing in the Far East has had an impact on the
way manufacturers in the UK do business.

Jagger has made the decision to import certain components from emerging
markets because it’s too expensive not too.

‘The day you resist change is the day you miss out. We considered all our
options and decided to buy in some of our components. But we did it for the
right reasons without compromising quality. Our selling point remains that our
goods are made in England,’ Jagger says.

Another challenge Jagger faces on a daily basis is the growing wave of
regulation, which has been as difficult to deal with as competition from foreign
markets and sourcing working capital.

‘I employ somebody with a strong financial pedigree and another accounts
person to help with the management of our finances. Ten years ago that would
have been unheard of. Today the business has to file VAT returns and government
statistical returns on a monthly basis. Those are very time consuming activities
and the information provided has to be accurate because the business is liable
if it’s incorrect,’ Jagger says.

But he isn’t about to let these obstacles hinder his progress. Plans are
underway to expand exports into Russia and the Far East, and accounting is at
the centre of those expansion plans.

‘The business is going through a tremendous time and we are planning for the
future. We are identifying scenarios that we could be faced with and to do that
it’s essential that we can run accounts in real-time so that we have credible
figures telling us where to invest, what to buy and who to employ. Without
knowing exactly where we are on the balance sheet everyday these plans would be
severely hindered.’

Enjoying the city boom

The past 12 months have seen an almost unprecedented boom in the City.
Bonuses worth £8bn are expected to be paid out in the Square Mile this year as
investment bankers, private equity players, fund managers and accountants reap
the benefit.

But it’s not only the City big hitters who have benefitedfrom the boom in the
capital markets. All the money that hasbeen earned needs to find somewhere to
go, and bespoketailors, cobblers, tobacconists and other luxury services and
goods have been the main beneficiaries of the increased disposable income that
is available. Of the £8bn, £5bn is expected to be invested in property, which
leaves a big pot of £3bn for spending on luxury goods.

For Neil Jagger the good times in the City have been good news for business.
‘You could say that if the sales of things like luxury pipe tobacco and cigars
are strong then the economy is strong. We have certainly felt the benefit of the
strong economy. Our shaving products are targeted at the high-end of the market
and we have been doing well,’ Jagger says.