Jamie Shaw is a geek and proud of it. After 20 years’ experience working in the IT industry, he was suddenly made redundant from an IT manager job at TV production company Victoria Real when it was acquired by Endemol back in 2002.

‘Because of the level I was at, it was difficult to find work as a senior IT manager. At the time, a lot of friends were asking me for help with their PCs. They’d had negative feedback from retailers and looking for people through Yellow Pages.

If you were a company, it was OK, but for individuals there wasn’t really anyone out there to help you with PC problems.’

After joining forces with a silent partner, Shaw founded Geeks on Wheels in October 2003 with £10,000 and working from home.

The rationale behind the business, Shaw says, was simple: ‘Originally we were targeting the domestic market, but as it turns out we also work with a lot of SMEs. Many IT support companies attempt to tie companies into expensive service level contracts. It’s a huge market and they’re not really looked after.’

Today Geeks on Wheels offers support to a range of clients across the whole of Sussex and within the M25. It employs 25 people (predominantly engineers) and generates 65% of its business from home users.

‘Brighton is full of small companies. Although we haven’t targeted them specifically, they’ve come to us. We do a lot of advertising. And our engineers drive around in black Nissan Micras with the company name and logo on.’

The company successfully applied for a Small Firms Loan Guarantee from the DTI and received £60,000 to fund premises, marketing and building the business up. The money certainly proved useful, though Shaw says ‘it was a nightmare to get’.

In September 2005, the company was granted a European trade market for ‘Geeks on Wheels: we fix computers’. Shaw adds: ‘It’s expensive and bureaucratic because Brussels is involved, but it’s worth doing. It means that we can now franchise out across Europe.’

Shaw admits that the franchising option is a double-edged sword. ‘There are pros and cons. It can allow you to expand rapidly, but it’s key for us to maintain a good name and quality standards.’

At the moment, Shaw is focusing closer to home with ambitious plans to raise capital to help the business expand nationwide, starting with a new office in Chertsey, due to open in the first quarter of 2006.

‘Should we go to a VC, a business angel or go for private funding? We need the finances to get the marketing. We’ve never gone overdrawn and increased turnover by 500% last year. Turnover in Brighton alone is £350K. We’re not profitable yet because we’re investing a lot in the infrastructure and any money that comes in goes straight back into the company.’

Shaw believes in networking with other businesses and has found the support of organisations such as Sussex Enterprise, the Federation of Small Businesses and Hub 100 (a Sussex-based set-up) invaluable. ‘We’re also talking to electronics retailers and hoping to strike a deal whereby they recommend us for support,’ he says.

‘The domestic PC market is enormous. We planned to focus purely on the domestic market, but now we work with some fairly large companies. For example, Sporting Index: we support all of its directors at home. We’re also the recommended IT support service for lifestyle management companies, including Quintessentially and Ten Lifestyle.’

Rachel Fielding is editor of Best Practice

Geeks' challenges

WHAT THE EXPERTS SAY...

Nick Winters, Vantis Numerica
Geeks on Wheels has reached a critical stage in its development. Its most important decision is to decide where it wants to go. Having the right strategy in place is probably the single most important challenge a growing company faces.

So what are the ingredients of a winning strategy? To succeed, Geeks needs a growth plan that is well thought out and achievable. It should encompass both financial and non-financial measures.

Shaw should seek as much help and advice as possible to formulate the strategy. He then needs to assess it regularly by measuring actual against planned performance and should not be afraid to change direction if necessary.

Having settled on a strategy, Geeks can decide which form of finance is most appropriate. The most difficult (and usually most expensive) funding of all is this early stage funding, because an investor will wish to be compensated for the risk that they are taking.

The amount of funds required and period of investment will determine the most likely source of funds. Funds can be either equity or loan based. The Business Link site www.businesslink.gov.uk provides good basic guidance. Also, The British Venture Capital Association’s website http://www.bvca.co.uk contains a good introduction to private equity.

But Geeks must remember that if they don’t know where they are going, they are likely to end up somewhere else.

Rupert Merson, BDO Stoy Hayward
Geeks on Wheels will probably be too small to interest a VC. The problem is the usual one: a VC, in addition to wanting to see growth prospects and exit potential, will need the deal to be big enough to justify the costs of investigating it in the first place.

Two other routes mentioned by Shaw are more likely. A business angel might be interested in putting in smaller amounts of money than the typical VC, and accessing business angels is becoming easier.

Secondly, the franchise route that Shaw is exploring for Europe is also worth considering for the UK. Shaw is right to be concerned about control and quality; but the risks of the former can be mitigated by a properly drafted and well-thought-through franchise agreement.

The risks of the latter are inherent in any growth strategy: growth requires new people ­ it’s critical that he works hard on recruiting the right people into the business, whether or not they are franchisees.

On a different matter, Shaw should worry about focus. Selling to consumers and servicing larger businesses are very different propositions. Shaw doesn’t want to damage the reputation of his core proposition by stretching it too far in his attempt to accommodate different sorts of client.

Victoria Jonson, ACCA
Shaw needs to address two key questions that will help him to decide in which direction he should go. How quickly does he want Geeks on Wheels to grow and what is he prepared to give up?

Franchising is an option that has the potential to provide long-term profits. But there are considerable start-up costs and Shaw will to spend considerable time on establishing the system, support service, franchising agreements and financial arrangements as well as recruiting franchisees.

But once established, his costs and overheads will probably be lower than if he were to own a number of outlets. The British Franchise Association (www. british-franchise.org) organises seminars that provide independent advice on how to successfully franchise your business.

In terms of funding, banks are obviously a good starting point for funding up to £100,000. Beyond that there is potential in using either a business angel or venture capital.

Business Angels typically invest amounts from £25,000 to £1m and can expect to be involved on a day-to-day basis to ensure they have a degree of control in the future direction and development of the business since they will expect to see a return on their investment.

The British Business Angels Association (www.bbaa.org.uk) can pr ovide advice on angels and how to approach them with an idea.

Venture capitalists will normally look at larger more established companies, and while they are more hands off than business angels they will expect good returns on their investments and a significant stake in the business.

The Regional Venture Capital Funds programme provides risk capital finance in amounts up to £500,000 for SMEs that show growth potential. More information is available on www.sbs.gov.uk.