Management buyouts aren't for the faint-hearted.
In January, Jonathan Reed and Zoe Hill put their futures on the line and bought the company they worked for - celebrated Suffolk coffee brand Paddy & Scott's - as its remaining founder, Scott Russell, bowed out.
The business was started by Scott Russell and Paddy Bishopp in 2007 after they decided to source and roast their own coffee beans. They developed their "coffee with a conscience" brand and it quickly grew.
Paddy & Scott's co-founder Scott Russell with Zoe Hill and Jon Reed after the deal is signed (Image: Charlotte Bond)
Paddy left the business in 2016 and last year Scott received a number of approaches to buy the business - one from a big public limited company (plc).
Jon, then chief executive, and Zoe, operations director, decided - with the help of three financial backers - to submit a bid.
"We didn't want to be swallowed up into a larger business and lose what makes this business special - so rather than be hunted we would be the hunter really," explains Jon.
Their fear was being subsumed into a large corporate entity and seeing the brand lose - as they saw it - its unique identity and the values which they had worked so hard on.
But Jon - who mortgaged his house to get the deal over the line - says they felt the pressure to deliver for their investors right from the start.
Zoe Hill and Jon Reed (Image: Sarah Chambers)
Things didn't quite go to plan. They were warned that management buyouts (MBOs) can be major distractions which mean you aren't as fully-focused on the business as you would like to be.
There are intense negotiations involving solicitors and other professionals with the other party - and it all takes time away from the day job.
But they came up with a undisclosed price that suited both sides and the deal was sealed within a relatively short time period - four months. "I think both sides walked away thinking: 'Yeah, OK,'" says Zoe.
Having set themselves ambitious financial targets, they found - in the very first months - they were initially falling behind.
"Year-on-year growth has been up from January so there wasn't a fall-off-the-cliff moment. It was just that we had budgeted optimistically and that was not hitting the budgets we said we would deliver. So we weren't delivering what we said to shareholders," explains Zoe.
"Don't underestimate the amount of time that your head isn't on the business and that will have an effect on the business - you are distracted."
Jon acknowledges that during the period that it took to get the deal over the line, their attention was diverted. The acquisition - by standards - was remarkably quick but even so, it caused them to slip back for a while.
"The shareholders told us that was the reality - we didn't really believe that," he says.
"January arrived and you looked around the business and thought you would not have done it that way. It's not because we are particularly good leaders but when you are not there as much your head is in a different place."
(Image: Charlotte Bond)
Nevertheless, within a few months the budget was back on track and in June started to exceed it.
As soon as the sale deal was over the line, they started laying the groundwork for developing the business - both through cementing their "coffee with a conscience" aspirations and through diversifying into other areas - such as working with organisations wanting a private label product.
In February, immediately after the deal, they were supporting breast cancer charity Little Lifts with the launch of a limited edition coffee. As both Zoe had suffered breast cancer it was a cause close to their hearts.
She was diagnosed with the disease in 2019 at the age of just 34 and spent a gruelling year in treatment with surgery, six rounds of chemotherapy and 21 radiotherapy sessions.
Her mum found her second breast cancer lump while she was going through chemotherapy and subsequently had a single mastectomy and more chemotherapy alongside her daughter.
When Zoe was told she was going to need chemotherapy, she was presented with a box of carefully curated gifts aimed at helping people get through treatment from a charity called Little Lifts.
Jonathan Reed and Zoe Hill with the Little Lifts team (Image: Sonya Duncan)
"I was so overwhelmed by the kindness and thoughtfulness that went into this box that I immediately wanted to know more about the founder," says Zoe.
She became a trustee and when Jon lost a friend to cancer at Christmas they decided to donate 100% of the profits from their limited edition Care Package coffee to the charity.
In April, the company continued to push its charitable aims by partnering up with Tools With a Mission - which sends donated tools to parts of Africa via refurbishment centres in Ipswich, Rugby, and Halstead.
(Image: Charlotte Bond)
In May, the company launched an events arm at its waterfront café - holding both out of hours events in the venue and supporting other events held in the adjoining university building.
Catering for these is led by café manager Becks Shepherd, who has already achieved the projected annual budget in the month of June alone.
In the same month, the firm announced its partnership with independent hospitality group Macdonald Hotels and Resorts Independent hospitality group was funding 15,000 school meals for children in countries including Kenya.
The Paddy & Scott’s Lunch Box programme was fully rolled out across Macdonald Hotels & Resorts venues - through serving Lunch Box coffee at all of its 32 properties in the UK.
(Image: Charlotte Bond)
Under the scheme, each bag of coffee funds a meal for a child in Kenya as part of The Muchomba Project and other coffee-growing regions around the world.
The Muchomba project - which Zoe and Jon visited last year - is a joint venture between Paddy & Scott's and a Kenyan coffee farm which has helped finance a series of works including improvements to the local school.
In June, the company teamed up with NHS Ashford and St Peter's Hospitals to create private label coffee Nourish - its first private label deal.
Zoe Hill, Jon Reed and Scott Russell (Image: Charlotte Bond)
In July it secured its second private label deal with Suffolk and Essex hospitality group Milsoms, with the launch of Milsoms Signature Blend.
Fifth generation Brazilian coffee producers Derio Briochi Jr and Luisa Lang headed over to the UK to visit their end customer.
In July Simon Rees - group managing director and chartered financial planner for Gibbs Denley Financial Services of Bury St Edmunds - joined the company as a new investor and strategic adviser.
Simon Rees, centre, with Zoe Hill and Jon Reed (Image: Paddy & Scott's)
His aim is to help the brand in its quest to fund one million free school meals in coffee-growing regions.
It's been a rollercoaster few months, but both Zoe and Jon feel that taking the leap with the MBO was ultimately worthwhile.
And while they hadn't set a target for how much they would raise for charity, it has naturally ended up at around 10% of profits since the start of the year.
"Both of us own a company never having had aspirations to own a company. I had never thought about owning a company but I'm insanely proud of this business and how we have rebuilt it over the past 10 years," says Jon.
"In the future I feel much more confident about starting a business. Once you have got that under your belt you realise it's achievable. The only thing you lack is a bit of bravery."
It's also important to have a good support network around you, says Zoe.
This month they have surpassed their financial target and things are looking up. They are securing bigger volume contracts but these can be slower to implement which has been a learning curve, says Zoe.
There was a "sense of relief that everything you know you have done right and the believe in it and all the building blocks you have put in place", she says.
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