Two years on from the biggest business decision of their lives Andrew Franck-Steier and Andy Price, founders of niche investment agents FSP, are still in business and thriving. Alun Thorne caught up with them.
In the summer of 2007, while working at two national surveying practices in Birmingham, the then 34-year-old Andrew Franck-Steier and Andy Price made the brave decision to resign and set up their own commercial investment agency practice.
“The thought of running our own business appealed to both of us” said Mr Franck-Steier, former head of investment at Colliers CRE.
“The decision was made for positive reasons, in wanting to run our own business. It was in some ways a difficult decision as we were happy in our previous roles.”
For many, August 2007 would now be seen as the worst time to be considering venturing out as a new business in the property industry; the credit crunch and recession were starting to take hold and commercial property values had peaked.
Mr Price, former investment partner at King Sturge, said: “We knew the property investment market was moving in the wrong direction but you have to believe in your own ability to get through tough times.
“There is always a reason not to do something new, we didn’t want to regret having never been brave enough to try a new venture.”
There were those in some of the national surveying practices who questioned their wisdom, but two years on the firm is well established in the Midlands property market and building a strong reputation.
“We were aware that there was no truly niche investment agency practices in Birmingham although the fact there was a ‘gap’ in the market was no guarantee of success,” said Mr Price.
Mr Franck-Steier added: “In some ways knowing the market was only going one way helped us to focus on a thorough and comprehensive business strategy from the outset.
“We knew we weren’t going to get business handed to us on a plate and revenue generation would prove difficult, not only as a start-up business but also with a decreasing number of transactions and dramatically falling values.”
As a new business they kept a tight rein on initial set-up costs and have monitored monthly expenditure closely.
The strategy has proved successful as they have not had to cut back drastically on costs or rethink budgets, keeping to a necessary minimum from the outset.
This has allowed more time to focus on “the day job”. Realistic turnover targets were also set.
“We felt it important not to try to be too ambitious and then feel we have failed to meet high aspirations, which could have become de-motivating” said Mr Price.
The past two years have taught many that there is a real need for hard work, commitment and drive to guarantee success through difficult times and in the long term.
“We would like to think we portray to clients a hunger and desire to be successful,” said Mr Price.
“With the investment market changing almost on a monthly basis over the past two years we felt it was important to have a broad and varied range of clients,” added Mr Franck-Steier. “The buyers and sellers today are somewhat different to 2005/6, we have to adapt to a continually evolving market.”
The business now has a host of institutional clients, property companies and private investors for which they have worked hard from the outset.
They have lost out on certain sales by giving honest advice to clients rather than telling them what they might want to hear.
They have also missed out on a number of acquisitions by advising clients on not increasing bid levels and chasing deals.
“The business we are in is strongly about personal relationships and you can only build up trust over a long period of time which is more important than some short-term gains,” added Mr Price.
“One important thing we have had to learn is that in this difficult market you have to remain patient and persevere.”
One area of business the firm has spent time on is working with Midland property companies.
The efforts have begun to bear fruit as FSP has acquired property for the likes of Mucklow, IM Properties, Birmingham Properties Group and Evenacre.
In the past month FSP’s initial success won it the prize of Midland Investment Agency of the Year at the industry’s regional awards.
“We were thrilled by the award, a great accolade having only been trading for two years and being in competition with several of the region’s national surveying firms,” said Mr Franck-Steier.
Coming from a corporate environment to working for themselves, they encountered certain differences.
Mr Franck-Steier said: “We have lost the in-house support network of other agency and professional functions.
“We can’t ask other colleagues for their specialist advice as easily. What we have been able to do, however, is bring in advisers suited to the specific task at hand.
“We are fortunate in that we have a number of ex-colleagues who have been willing to help us and our clients as and when necessary.
“Also the freedom and speed of decision making, we consider is an advantage and we have both benefitted from having the same outlook on business strategy.”
The real learning for the two, however, has been from wider business issues. Understanding the key elements to running a successful business has proved an enjoyable challenge.
“The local support from our network of banking contacts and other professionals has been invaluable.
“We are very grateful for the support many have given and the faith and belief they have shown in us,” said Mr Price.
“It is clear when running your own business that you begin to have an increased appreciation of the impact the wider economy has on your own specialist sector of the property market.”
Mr Franck-Steier said: “We feel we have established ourselves and having a track record of completed deals we are well placed to take advantage of any upturn in the market.
“There is a more encouraging outlook for some commercial sectors, although we realise that for most secondary stock the recovery will be slower.
“We will continue to focus on our clients and continue to work hard, remain positive and not over-extend ourselves from a business point of view.”
