Q&A: Thomas and David Smith
17 February 2023
Thomas (pictured left) and David Smith are managing directors of the award-winning independent Smiths Equipment Hire. Based in Blackpool, the company currently has 16 depots across the north of England and a growing re-hire business, plus a successful training operation.
Smiths celebrated its 50th anniversary in 2020. What’s the secret of that success?
Hard work – and initially ignorance, because we learned simply by doing things. The original family business had been a coal merchant, which eventually moved into heating oil deliveries, and in 1970 our father, Tom, saw an opportunity for a hire activity. He started by investing in a few mixers, then some small tools and equipment, and it grew from there as people asked for more things. Being a family business, it was natural for us both to get involved, as did our older brothers Neil and Paul initially. We cared about it. We started when we were young minding the shop, then manning the hire desk, then driving – whatever was needed.
How did it grow?
We certainly didn’t have an elaborate business plan. Initially, we bought second-hand equipment and vans from auctions. Someone would ask for equipment we didn’t have, say a generator, and if the hire period was good we would simply buy one, then another. That’s how we added larger plant like access platforms and we maintain that attitude today. As an independent we can make quick decisions and we encourage our depot staff to do the same: if there’s a good hire contract to be had, just invest in the equipment.
How many employees do you currently have?
185 across our 16 depots.
Is recruitment challenging?
It certainly has been, although the situation seems to be easing now. Earlier we experienced what could be called the ‘Covid concertina’: during the lockdowns and furlough, people were at home and not working, so finding staff was tough across all industries, but now they are getting back to work or looking to change jobs. We have recruited the people we currently need but it has been hard. And finding people with the rights skills sets, such as workshop staff and technicians, can be frustrating. A good hire person needs a combination of attitude and aptitude.
Smiths has also helped local unemployed people into work, hasn’t it.
Yes, we recently recruited three trainees, one aged 18 and two in their thirties, through The Platform, an initiative connected with job centres in Blackpool. We keep in close contact with several such schemes run by local organisations and councils to help our community.
What would help future recruitment?
Industry generally would benefit from something like a Government-subsidised scheme where you could take someone on for two years and simply train them on the job. It needn’t necessarily be linked to a particular apprenticeship or day release programme: sometimes that sort of thing can actually disrupt training.
What equipment is in demand at the moment?
It’s across the board and all our customer sectors are busy. Plant and access equipment utilisation is high and we kept investing in kit both during the pandemic and since. This has reduced the average age of our fleet – and customers love having new machines.
How about hire rates?
We are able to get sensible returns. Customers appreciate the quality and consistency of our service, perhaps because they have been let down previously by others. We’ve used the analogy before of restaurants: you can go to a fast food outlet or a quality restaurant and both will feed you, but the experience will be different.
Who are your main customers?
Chiefly local and regional contractors and tradesmen, plus DIY hirers and cash customers. We don’t chase national contractors: it doesn’t suit our business structure and you can’t be everything to all people. The private customer base really grew during the lockdown as people undertook home improvements and our analysis shows that we have retained most of them. They have got used to the concept of hire.
You also maintain a very active web and social media presence.
That really came into its own in the pandemic. People found us online and could place orders for delivery or collection. And it remains very powerful, attracting a lot of positive comments and feedback which again others respond to. But we still believe in depots and the personal interaction. You can’t run a meaningful hire business from solely a laptop and a website. Running physical locations, operating your own vehicles and interacting with people, you understand the market better and establish relationships. Our Trade Card initiative is also very popular, building loyalty and it is appreciated for its discount structure.
How is your National Managed Hire rehire activity performing?
Very well indeed and it extends our reach nationally with selected rehire partners, typically leading to reciprocal business. It is now regarded as one of our ‘depots within a depot’ at the Blackpool head office with its own dedicated team, alongside our training activity and our own central hire one-call service.
Is demand growing for green equipment?
Yes but it’s gradual. We offer it and supply it accordingly, with most demand coming from larger contractors with environmental obligations to meet. The quality of battery powered kit is now extremely good. But customers still have ‘charge anxiety’ on larger plant, rather like with electrical vehicles. Users are concerned they might not be able to recharge machines, particularly on new sites that don’t yet have an electrical supply connected, so they would end up using a diesel generator. And it could be the same with hydrogen in the future. The government has to determine the necessary infrastructure requirements and perhaps the construction industry needs to change some of the ways it works.
But we all certainly need to act on climate change. We are witnessing it constantly in the extremes of weather around the world and we have to protect the planet for future generations.
How do you see the next 12 months?
We thought 2022 would be a consolidation year for Smiths after the positive pandemic ‘blip’ in 2021, but our turnover actually increased considerably. There may be a recession which could lead to a drop in construction and domestic demand, but many analysts think any downturn will be short-lived compared with, say, the 2008 credit crisis. Some companies that have borrowed extensively at low rates may be under pressure now that interest rates are rising, but certainly our customer bases have proved resilient in the wake of Covid and the energy inflation spiral after the Ukraine conflict.
Any specific plans for 2023?
We’re certainly looking to expand again. There are some gaps in our network that we could fill. Whenever we open a new depot it’s usually into profit very quickly because of the strength that the Smiths brand now has, as well as our reputation. Existing customers will use us in any new locations and our internet marketing activity drives new business. Of course, opening new depots will require finding the right premises and the right people.
If you were starting out again, would you go into hire?
Yes, absolutely. There is still so much potential to add new elements and the business constantly evolves. There are new products to buy, new depots to open and new opportunities like rehire. Some companies end up just doing the same things all the time but our constant investment in the fleet, in our locations and in our people means we are always moving forward.
What’s the best thing about hire?
Every day is different and your priority is always to satisfy the customer. There’s nothing quite like it when someone tells you: “That equipment you hired to us was great. Thank you.”
Photo: Alan Guthrie
