The Caterer interview – Mike Sunley
Mike Sunley co-founded business and industry caterer Lexington eight years ago, after a career at Compass, High Table and Avenance. The caterer has really hit its stride in recent years, becoming a well-established member of the contract catering world. Chris Druce caught up with Sunley to hear what's next
You will end this year with turnover north of £20m and 400 employees. Did you ever think you'd reach this point eight years ago? I think when you start a business you have to have a goal but there's certainly a moment where you say to yourself, "God we wanted to be here and here we are". The last three years or so have been amazing for us and we've tripled the size of the company. It's a long way from my first job as a trainee manager for Anchor Hotels at the Old Green Man in Harlow, Essex.
You restructured the senior team in June. Why was that? We needed to strengthen the senior team because it's easy to dilute your message as you grow. Julia Edmonds joined us as sales and marketing director three years back and has really helped the business get to where it is. She's a great sales person but also a great operator.
Julia took on my previous role of managing director in recognition of this and to allow me to step back, and I became chief executive so I could take a more strategic view of where we want to head. It allows me to pay more attention to the financial and human resources side of Lexington, which is very important in these times.
I believe you have just moved office We've moved around the corner from where we were near Mansion House to Queen Street, which is close to Cannon Street station. Three years back we probably had seven head office staff but that's now grown to 19. We've effectively doubled our office space and now have a training room.
The move went well but then the dishwasher blew up, the fridge we ordered was too big to fit and the kettle broke.
The business is forecast to notch up turnover of £21m to £22m this calendar year. Are you looking to diversify? Our focus remains very much on business and industry, although I'm always keen to look at opportunities. I've always been happy to say no if a contract is not right. We operate in the City and the West End of London and there's so much business on our doorstep, certainly within the M25 area, that we don't intend to spread further afield. If you set up shop in Scotland or Manchester you also need to put a support network in place to maintain standards and that's expensive.
You have resisted the current trend to add a facilities management offer to the business. Why is that? We've always taken the view that we're a caterer and food is what we do, not facilities management (FM). Where a client requires a combined bid, we've partnered with specialists in the FM field and that works for us.
How is the recession and subsequent sluggish recovery affected the business? It's been a mixed bag for us. We were hit hard initially as one of our clients was an Icelandic bank. On the other side of things, we noticed that our cafés and staff restaurants became very busy as people shunned the high street in a bid to save money.
Director and partner dining was also up, with senior managers dining-in rather than heading out to a restaurant. It's certainly been tough but there are still business opportunities out there, although it's fair to say many clients are sharpening the pencils and looking to cut costs.
Do you feel pressure to win new contracts at this time? We're not the size that we can go in and take on vanity contracts that don't make any money. In fact, I'd be disappointed if we ever did. We're in business to make money, in a sector where the margins are hardly massive, so every contract has to provide a profit.
How is the recession and subsequent period changing the market? Clients are looking at costs and most want to reduce subsidies - a general trend in the market that is being hastened.
There will always be companies that want to provide benefits to their staff but they're increasingly in the minority, and most operations of a certain size want as little subsidiary as possible now. The move to ever more commercial contracts isn't all bad as you do tend to get more latitude as to opening times and what you offer, which in turn can provide more sales opportunities.
As caterers, we're getting ever more like the high street.
You were featured on the Sunday Times Top 100 Best Small Companies to Work For list last year and have just received Investors in People Gold Status They're two things that underpin all that we're about. Two very different ways to assess us as a business - one an anonymous survey of employees, the other a series of interviews with a cross-section of staff. Although they're hard work, Investors in People, in particular, we're very proud of, as they're not the sort of thing you can blag.
Has growth of the business and winning recognition made it easier when it comes to recruiting good people? We've run a graduate recruitment scheme for four or so years and I took time out to interview for it this year. To hear candidates talking about how they wanted to work for us because they've heard good things, well, it just knocked me sideways. Thanks to our chef director Rob Kirby, we also have a good reputation amongst chefs, attracting many from a restaurant background, so recruiting for the kitchen isn't a problem either.
You are sponsoring a competition class at Hospitality 2011. How did that come about? We run our own awards programme, LexChef, and decided to create a team from each year's winner to compete in Hotelympia La Parade des Chefs. Despite being relative minnows compared with some of the big caterers there, the team won gold.
The organisers of Hospitality 2011 then approached us to ask if we'd sponsor a category - the Lexington Food Service Challenge - as part of Live Theatre. We'll be putting a team in of course. We can't have anyone else running off with the Lexington trophy.
How do you like them apples? A lot, in fact we've sponsored trees in an orchard [Brogdale in Kent] where three unusual varieties of apple are grown - not the sort you'll find in the supermarkets - very sharp in taste like traditional English apples such as Cox. We're using them this autumn across our client sites in various recipes. Supply wise it's very much illustrative of our approach and the flexibility in the Lexington operation as a whole.
MIKE SUNLEY'S LESSONS LEARNT RUNNING A BUSINESS
Cashflow - manage it at all costs, it's key
â- Never say never
â- Get the right people around you by recruiting wisely
â- There's no point to a contract if it doesn't deliver a profit
â- Invest in and reward your people
â- Don't be afraid to say no if a deal's not right for the business
â- Never put the chairman in charge of the office kitchen
â- There's always a business opportunity out there, no matter how tough things look
â- Don't lose heart and remain focused on what you do well and keep doing it
