There have been more than a few bumps in the road for RED Driving School as it emerged from administration in 2010 to re-establish itself as a successful, thriving business. Financial Director Simon Clarke, who has been with RED since 2004, talks to us about his career, how RED has restructured and refined its business strategy over the past decade, as well as the main challenges to overcome now and into the future.
Could you expand a little on your career background prior to joining RED Driving School?
It’s slightly unconventional, I must say!
I completed my A-levels, then decided against university for some reason and entered the world of estate agency for around four and a half years. Once I got a little fed up with that, I decided to go travelling for six months which turned into two and a half years!
By the time I returned, my parents had moved up to Newcastle and I joined them there. Around this time, I opted for a career in accountancy and completed a foundation course before joining KPMG and becoming ACA qualified. From there, I joined Pubmaster, which was a fascinating business to be a part of as it was constantly evolving and never stood still. I was there for around five years before it was sold on to Punch Taverns in 2003.
From there, how did you become involved within the driving school industry?
After staying with Pubmaster to integrate the business, I joined Let’s Drive in Billingham; a small business that was theoretically a national one. It had spent a long time competing with LVG for market dominance, a direct rival based in Brighton that eventually bought us out. As the companies merged to form RED Driving School, the shareholders in Brighton placed the management team from Let’s Drive in charge, and I’ve been here ever since.
How has the business changed and developed during your time there?
Let’s Drive and LVG were, in effect, training companies until they merged. The core of the business was to advertise and use direct marketing to recruit people to become driving instructors through a course, which we offered on a buy now pay later basis. Thousands took this up, but once the credit crunch hit, this market dried up almost overnight.
RED Driving School went into administration in 2010 and was acquired by a Private Equity firm, who tried to replicate prior success by injecting new funds into the business. What quickly became apparent, however, was that the market for the current business model was gone.
The management team therefore refocussed our business strategy and we have essentially gone from being a training business with a small driving school attached, to a core driving school with a training business on the side.
Could you expand a little on how your role has changed as the business has changed?
From 2004, I’ve done pretty much everything there is to do within this business! I initially joined as Financial Controller and most of my roles have been finance related, but we also have an accountancy business directly focussed on the driving school industry, and I took control of that when the directors asked me to move it from Brighton to the North East. I spent a great deal of time building that business into the industry leading accountancy provider. Following administration, I was COO for a time, and then took control of the fleet of vehicles operating under the RED umbrella. The last few years have seen me predominantly work as Finance Director.
While the refocus of business strategy could be considered one of RED Driving School’s biggest challenges, what current aspects of the business are proving to be major challenges going forward?
We effectively have two major challenges. Firstly, we don’t technically have any employees, or indeed customers, as they are franchises that operate under the RED brand. This means we have this tripartite arrangement where we have little to no control over the other two parties, making it difficult to implement business changes. It’s been a huge challenge, but we can certainly see light at the end of the tunnel!
Our brand reputation is now also at a point where it is very strong, but this was also a major challenge as we turned the business around from administration. We now have a core target market, younger people, looking to learn to drive, who are unaware of the history of the business.
Could you expand a little on the working history of RED & UNW before and during this transitional phase for your business?
I have had links with the tax team at UNW all the way back from my time at Pubmaster. We have used the advice of David Ward (Tax Partner), Mark Hetherington (VAT Partner) and Dave Redhead (Audit & Assurance Partner) as we transformed the business. The advice we received was thorough and always provided additional options to consider, and UNW always provides constructive advice to assist us in the decision-making process.
On the surface, as we have moved to a single site in Billingham and focussed on the driving school, RED may seem a simple business, but it becomes more complex the deeper you delve into it. Any issues we may have had along the way have been dealt with professionally and swiftly by the UNW team working alongside us.
Finally, is there a piece of advice that has resonated with you throughout your career?
Simple, always read the small print!
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