Nic Davies talks to Housing Today about the challenges it and other pocket-sized housebuilders face.
Large stock market-listed housebuilders tend to grab the headlines and certainly take the lion’s share when it comes to delivering major schemes. But small companies still have a vital role to play in delivering homes the UK needs so badly. And those firms have to start somewhere.
Nic Davies used to be commercial director at contracting big-hitter Willmott Dixon, starting as a trainee in 2000. Fast forward 16 years and Davies wanted to fulfill an ambition to draw on his experience and create a business he was in complete control of, one which featured the best bits of a large firm but with the added flexibility of a small one. The result is Helix, a small consultant and housebuilder that Davies hopes can grow into something larger.
He talks to Housing Today about Helix’s journey, the challenges it and other pocket-sized housebuilders face, and where the fledgling business might go.
Why set up Helix?
“I wanted to run my own business and build something that had all the good stuff that comes from a large contractor which is often missing from smaller contractors. I wanted to bring some of that large contracting mentality to bear, basically. When I started in the housing division at Willmott Dixon it was a £20m to £30m business, and by the time I left it was a £300m operation. It’s no criticism of Willmott Dixon but [in a large firm] you lose the sense of localism, where everyone knows your name. I wanted to recreate the sort of family business-style operation where there’re 10 of us in a room [and] we all share the same ambition and culture. Once things get beyond a certain point you lose that.
How did you go about creating Helix?
“The first point of the plan was to set up a consultancy business, which I did … Helix Consulting, a quantity surveyor practice. I did that primarily to avoid having to leverage any debt into it as a new contractor. I created some fee income around things such as contract administration work to create a bit of a cash fund for contracting. It was off the back of one of those commissions under the consulting branch that we got a private development opportunity, so I brought in Carl Mulkern, who had been an ops director at Willmott Dixon. He has an entrepreneurial spirit, and we set up Helix Construct alongside Helix Consulting and then we had Helix Homes which is the development side of the business. Charlie Shearer [Willmott Dixon’s former chief operating officer] came on board as a non-executive director and has given us visibility to a number of clients. You need the face-to-face connectivity and Charlie gives us that.
How do you attract staff?
“A positive surprise has been how we’ve managed to attract good people from tier 1 contractors.
“I wouldn’t say it’s been easy, but bringing in new staff has been less problematic than I thought, given that we’re such a young company. We’ve built a fantastic team, and one of my ambitions was employing and developing staff – and we’re doing just that.
How did you set about growing the business?
“Growing any business has its challenges. If I could turn back time to the start of 2019, I would have made sure – and we’re talking about business development – that I had double the number of named opportunities, because things take a long time to develop. The tendering process is slow, it’s often two or three months before you hear back on submissions, documents are changed and so on. “That’s been a real challenge for us. As a new business you have got the due diligence side of things, and other barriers to entry in terms of tender lists; they are still quite rigid in terms of the metrics. On a number of occasions, we’ve found that it’s been more pragmatic to talk about our experiences as directors.
“[When we got on] the Catalyst framework and we topped the pile of the seven contractors that were on it – we didn’t just sell our experience, but having a consulting and a contracting business offers a great unique selling proposition to construction management because often that aspect is led by pure consultants … they don’t have the design and build experience … so having that as an offering as well has its appeal.
“Our five-year business plan should take us from £2m to £5m to £7m to £10m in that time. We’re in year two of that journey. And it’s paying off. People who come to our sites – architects, clients, etc – see what we’re doing, the programmes on the walls, the inspection checklists we put around quality … and tender opportunities just fly from that.
Where does Helix’s potential lie?
“My primary objective now is to tap into housing associations at a local level. Large firms put their best foot forward, then follow up with fairly junior staff, whereas with Helix our board of directors are fairly close to the front line. So, the service a client receives stems from our experience, rather than from a couple of junior staff who follow on behind us. It’s a more personalised approach. On the public sector side we’re securing work that already has planning, so it’s the discharge of those conditions that we’re responsible for. Similarly, in the private sector, that [planning] is already in place. It is our longer-term aspiration to get into some joint venture work with the development side of things, but we’re not leading on that process just yet.
How are you persuading clients to give work to a small unknown firm?
“What is often lost on clients is that, for a small contractor, it’s our own money, so the due diligence is probably more powerful than that of a larger indebted firm. That’s one message to sell. Regarding our predictability in terms of performance, as with most contractors you’re only as good as your supply chain. The other positive is that we’ve got a pool of subcontractors with whom we’ve worked for more than 20 years and who’ve come along with us. It’s not like we’re putting new spades in the ground – everyone we’re using is tried and tested.
What are your three top tips for anyone considering setting up as a small housebuilder?
“Have some prudence around cash. We make sure we structure our commercial terms correctly and ensure we’re choosing the right clients in the private sector who won’t run out of cash halfway through the job. From a business development perspective those jobs can end up being affected by marriages failing, personal finances, etc. You just can’t business plan in that sort of environment.
“Obviously, ensure you employ the right people. Hold your nerve and attract the right personnel. Create the right culture. This is a blank canvas for us. It’s one of the exciting things about doing it – we’re creating our own culture. We support local charities and raise funds for them. That sort of thing sets the culture internally. We can offer something a bit different.
“And thirdly, keep on top of quality of delivery. If we start capitulating on that then we’re nothing. We’re selling the business at the front end, hard. We’ve got to deliver. We don’t want a legacy of defects. We’ve got warranties to stand by and when we hand over the keys it’s an absolute quality project.
“Snagging does the industry a disservice but it’s very commercially driven. If you don’t have the right people and the right quality-control set up, then mistakes will happen. You’ve got to make sure that it’s all to the highest standard. There’s a quality checklist that we go through religiously for every trade to make sure it’s all as it should be.
“We want to flex and work with our supply chain and subcontractors. There’ll be good days and bad days, and we want to share that process. This has been an incredibly empowering experience. Nerve-racking? Yes, massively. As a quantity surveyor I’m obviously naturally cautious, but as a board we work very well. Charlie Shearer is a very cerebral strategic thinker, Carl Mulkern is an actual builder, and I hold the reins on the financials.”