Boss of sports development franchise Gareth Lippiatt is truly
passionate about getting kids into physical education. Here's how
he turned his passion into a business, how he survived the public
spending cuts, grew his business ahead of targets and why he still
struggles with delegation.
What gave you the idea for Sports Xtra?
Having graduated from Loughborough in the summer of 1999, I
worked in California as a professional coach for several months and
saw a completely different culture for children's sports provision
to the traditional UK system. In the States, parents are prepared
to pay a premium for their children's activities. They expect a
high quality experience to... That's where the Sports Xtra
seed was planted.
How did you turn the idea into reality?
The opportunity to start my business arose in 2002 after I'd
been working in several schools as a freelance coach. Through this
experience I had gained an insight into the systemic issues that
confronted schools regarding sports provision. The schools and
parents loved the service that I provided so I saw an opportunity
to create a brand and the Sports Xtra concept was born.
How easy was it to grow the business?
The business has evolved through several phases, each with its
own challenges. I'm sure that it never felt this way at the time,
however in hindsight, building a business that was largely
dependent upon my own abilities and a few 'handpicked' staff was
fairly straightforward.
A greater challenge was transforming this from a business that
relied heavily on customers' demand for my personal attention and
trust in me into belief and loyalty in the Sports Xtra 'brand'. An
increased workload and greater geographical coverage necessitated
more staff and as every employer will know, that's when growing a
business gets 'interesting'!
And the franchise model? Any issues?
Becoming a franchisor and building a network with national
coverage was a greater challenge still. The logistics alone present
their own problems, in addition to regional differences and the
varying demands and personalities of franchisees. I find that the
challenges that now confront me are usually more about leadership
than business acumen. My head office team and the franchisees are
all well aware what needs to be done, the issue is keeping everyone
motivated and on the right path towards achieving it!
How do you marry the twin aims of altruism and
profit?
Good question, although this isn't something I've ever struggled
with. As an entrepreneur, I've always believed that if I
concentrate on ensuring that I'm the best at what I do, the pennies
will look after themselves. Of course that premise also relies on
devising a profitable business model in the first instance but if I
wasn't confident that I had a product with a market that would pay
a viable rate for, maybe I'd have started a charity instead!
Other social enterprises struggle with this balance. Fancy
lending them a hand?
We've actually recently donated three franchises to a charity
called Sports Traider, who create opportunities for underprivileged
children to participate in physical activity, and we're creating a
sustainable model with them whereby those that can afford to pay
for the provision help to fund those that cannot. It's a project
we're really excited about and hope to extend this model into other
areas of the UK.
Is the public sector one of your main sources of revenue?
Have you been hit by the cuts? How have you responded?
We've always been careful to retain a balanced distribution
across our income streams in order to mitigate the risks of
accessing public funding which is always subject to changes in
policy. There certainly has been an impact on some revenues since
the change in government policy last year, however this has hardly
been unexpected or without warning so we have been encouraging
franchisees not to rely on subsidised provision.
With corporate business, we always look to be proactive rather
than reactive and have therefore been exploring innovative ways to
reach our customers and the development of new products. We
launched the franchise opportunity at the start of the recession
three years ago and have increased turnover from £200,000 to well
in excess of £2m over that time so we haven't done too badly!
How important are online tools to your
business?
We've embraced all the modern forms of communicating with
customers and prospective customers including e-shots, social media
and an interactive web-site with an automated booking facility. The
on-line media tend to be cost-effective and a valuable part of our
marketing mix, however we also believe that these should only
compliment the face to face interaction with our market due to the
personal nature of the services that we provide.
Has the upcoming Olympics been a boost for
business?
We're certainly anticipating that the Olympics will prove to be
a catalyst for further growth over the next 18 months and as the
event draws nearer, I'm sure that the nation will be gripped by
Olympic fever! The UK public takes a while to 'warm up' to these
global events but the fact we're hosting it has got to start
sinking in fairly soon!
I heard on the news that my Olympic ticket application is one of
20 million from the UK public so perhaps that will be the wake-up
call? That indicates that the interest is certainly out there and
we look forward to harvesting that next year
What are smartest business decisions that you have made so
far?
In fairness, I've made some great decisions but I've made some
terrible ones too! I've actually learned far more from the mistakes
and, as entrepreneurs, I think it's important that we have the
ability to confront failure and embrace the lessons that may be
learned.
As for the smartest: In addition to growing my own business at
the time, I took three years to research the franchise model which
we've now successfully deployed, examining competitors in our own
sector and comparable business models in other markets.
I spoke with consultants, refined our business model, re-branded
and prepared the infrastructure to facilitate rapid growth once we
launched the concept to the market. All of those factors were
important but the two 'smartest' decisions were both designed to
create differentiators between us and the competition.
Tell us more...
Firstly, we offer a 'management franchise' as opposed to the
'job' franchise that is the other option adopted by every other
franchisor in our sector. We identified that a key factor that was
necessary for us to retain a greater degree of brand control,
consistency in product delivery and increased sales was in
recruiting franchisees who would manage the business and build a
team of coaches to deliver the products, rather than being
deliverers themselves.
It was certainly a risk to bring in franchisees from outside the
sector, going for their business and management experience over
industry knowledge, but in most cases it has paid off!
Secondly, the sports provision market is saturated by deliverers
of traditional mainstream sports such as football, rugby, hockey
etc. In order to provide schools, parents and children with a
different option, we've positioned ourselves as non-traditional
physical activity specialists delivering courses such as street
dance, rock-it-ball, rock climbing and Spy School. These have been
immensely popular and our product range sets us apart from the
rest.
I'm a big believer in the value of doing something different and
focussing on the USPs. By examining your business model, pricing
structure, level of service and product range, there is always an
opportunity to differentiate your brand.
How difficult is it to find franchisees when you're so
passionate about the business?
We've awarded 33 franchises in the last two years so we haven't
had a problem in recruitment! In fact we're now ahead of our
network growth targets and have therefore taken the decision to
consolidate for six months to test, evaluate and evolve our
internal systems and processes. We have the momentum in our market
at the moment so I'm certain we won't stand still for long!
Personally, I have found it a challenge and frustrating that few
people seem to naturally possess the drive and passion that I have
for business... But perhaps people wanting to share in that is one
of the reasons they choose to come on board with us?!
It must be regulatory minefield when your 'customers' are
kids and you need to be very careful who you bring on
board?
We are extremely careful in selecting who represents our brand
both in terms of franchisees and delivery staff. As with any
franchised business, robust training and operating systems are
absolutely key to any success and we have developed an industry
leading professional development programme to ensure that risks are
as mitigated as they can be.
We're also founding members of the new trade association which
illustrates our commitment to driving forward the delivery
standards and quality assurance of our industry generally, as well
as that of our own business.
Find
out more about Sports Xtra