There is a reason for Phil Langley to be pleased with himself. Six years ago
when he made his foray into water coolers filled from the mains, many people
were sceptical, believing that coolers using bottled water were the obvious
choice.
Today, though, Langley’s decision to opt for a greener alternative looks
extremely clever. “It wasn’t important in people’s minds when we set out,
but we have banged the environmental-benefits drum all the way down the
line. It’s easier, you can control your costs and it’s environmentally
friendly,” he said.
Born in Sutton Coldfield and raised near Swindon, where his father worked in
the car-leasing business, Langley left school at 16 and got a job in a
supermarket, then moved on to selling advertising for a local firm. “My
parents were concerned about what my career path was going to be. All I knew
was that I was going to find my niche and make money,” he said.
When his younger brother died in a motorcycle accident at the age of 17,
Langley moved to London and found a job at a printing firm. A brief stint
with British Gas followed and then, at the age of 23, he joined a
vending-machine group. Moving jobs every 18 months, he worked his way up the
industry until he ended up on the sales team of a bottled-water-cooler firm.
When the company acquired another business in 2001, it came with a division
that supplied machines that take water from the mains and cool and filter it
before dispensing it.
Langley was asked to look at what should be done with this division. He
started researching the market and discovered that mains-fed coolers had
several advantages over bottle-fed ones, not least because they did not
require someone to deliver full bottles of water and take away the empties.
Cutting out the transport element also made the product greener.
The central problem faced by the existing players in the market was that
customers did not want to go to the effort and expense of installing the
plumbing that was needed for a mains-fed machine.
Langley realised that this hurdle could be overcome by offering plumbing as
part of the deal, and reported his findings to his boss. “I said you have a
great opportunity here. If you don’t enter this market, you are going to
lose all your high-volume clients to mains-fed water dispensing.”
His employers were, however, reluctant to commit to mains-fed coolers because
they had already invested millions of pounds in bottled-water dispensers.
So in 2002, at the age of 26, Langley decided to do it himself. He resigned
from the company and got a £100,000 loan from a bank.
From the start he decided to rent out the machines to businesses on a
long-term service contract. So he negotiated a deal with a provider to
supply and maintain his water coolers and hired two salespeople.
Then he got to work trying to find customers, hoping to entice them by
including plumbing in the deal. The first few weeks were nerve-racking.
“Having £100,000 sounds a lot,” he said, “but it isn’t for this kind of
business because, if you put a cooler into a company it might be paying you
only £100 a quarter. You have to get a lot of coolers out to start making
enough sustainable revenue.”
Three months after opening for business, Premier Watercoolers had managed to
rent out only 30 machines.
“At that point mains-fed coolers were a very new thing,” said Langley. “Some
people had heard of them, but in many cases there was a lot of education
needed.”
As the months rolled by, however, Langley started to refine his selling
techniques, deciding to target larger, blue-chip businesses and hiring a
top-level salesman. He also decided to bring the servicing of the coolers
in-house and began importing the machines direct from Italy. To boost the
cash in the business, he put in personal savings of £20,000, much of which
came from selling his car.
After 10 months in business Langley had 300 watercoolers out on rental and
realised it was time to bring in a chairman to help him. “If we were going
to move forward, we needed to bring in someone with serious credibility.
There was no doubt that Premier was a successful model, but running out of
cash would have killed it.”
His father introduced him to businessman John Cullum, father of the musician
Jamie Cullum, and he agreed to invest £50,000 in the business in return for
a 10% stake, joining as unpaid chairman.
Langley said: “When I started Premier I thought I could create a 1,000-unit
cooler business, but now I could see that we could make it into a much
bigger, 10,000-cooler business.”
His vision paid off. Turnover this year is expected to be £3.5m and the
business employs 50 people.
Langley admits making some mistakes, notably hiring the wrong people. He said:
“The wrong people can do a tremendous amount of damage to a small business.
It can be a huge drain on your resources.”
Now aged 33 and married with four children, he thinks that the secret of his
success has been a willingness to bring in outside help – even though it has
not come cheaply. Selling equity to established businessmen who have brought
their expertise to the board has left Langley with a 49% share in the
business. However, he has no regrets, saying: “Sometimes if you get the
right people it is worth having slightly less of the pie.”
He has this advice for budding entrepreneurs: “Get good people round you. The
right people will make the difference between success and failure.
“And don’t be scared to restructure your shareholding as long as the people
coming in are committed and can add significant value to the business.”
