Equity Investment For Window Cleaners Starts Trend

Dragons are angels for small businesses: With the BBC to start filming the eighth series of Dragons’ Den this week, Business Editor Owen McAteer looks at why small firms increasingly look to investment rather than bank lending to drive forward their companies.

Equity investment in small businesses may not sound glamorous, but it is the basis for one of the most popular programmes on television today. The dragons in the title of BBC’s Dragons’ Den are actually more widely known as business angels. These are business people willing to invest their money and expertise in a small company in exchange for an equity stake. And with banks more reluctant to lend money, it is becoming an increasingly popular way of doing business.

It is something that even the public sector has seized upon, with Finance for Business North-East established by regional development agency One North East, hoping to match local businesses with investors. One of the BBC dragons Duncan Bannatyne, who runs his business empire from Darlington, invested £100,000 in Tony Earnshaw’s company UK Commercial Cleaning Services when the young entrepreneur appeared on the programme.

Mr Earnshaw (pictured) was 19 when he established the company in Washington, Wearside, six years ago with £300, growing it to a £1.5m-turnover business, that is being franchised across the UK. He said he felt an investor would take more of a personal interest in his company than a bank, which was simply wanting to ensure a loan was repaid. He said: “If someone has invested their own money, they are going to make sure the company does not fail and have a personal approach to the business.” He also believed that, for someone to be able to invest in a business, it showed they had previously done well themselves to be able to afford to do so.

Mr Earnshaw said: “With an investor you get two birds with one stone – someone with an ability for business who has done well and, secondly, a bit of money that will allow you to grow the business at a faster pace.” Mr Earnshaw also said he felt having an outside investor helped small companies to become more disciplined in the way they worked. He said: “I have become more disciplined personally – it is not just my money in the business and you have agreed targets to hit. I have someone else making sure I follow the agreed business plan.”

Hugh Morgan Williams (pictured), chairman of North-East Access to Finance, agreed that the benefits of having equity investors were not only financial. He said: “They bring two things. They don’t just bring money, but the expertise they have accumulated in running businesses.” He continued: “I think investment does give discipline. I only have to look back into my own business in the early Nineties. “We carried out monthly management meetings and compiled monthly reports, whereas before we did it quarterly. “It does give a discipline to the business and helps to spot problems arising before they become real problems and will lead to greater success.”

North-East Access to Finance is the legacy fund supervising the returns on investments by the £125m Finance for Business North-East super fund – formerly called Jeremie – which was launched earlier this year, and which reinvests them in other businesses. The £125m fund, a mixture of private and public money and the first of its type in England, will provide not only loans but also equity investments to 850 smaller firms in the region over a five-year period. It will target business startups, technology-based companies and growing smaller businesses.

The private investment of £62.5m comes from the European Investment Bank, alongside public funds from the European Union of £42.25m, and £18.25m from regional development agency One North East. One of its aims is to bring business angels on board through its Angel Match Fund, worth £7.5m. The fund manager may itself try to put a company coming to the fund in touch with a business angel, the company may ask the fund to find one, or business angels can approach the fund themselves, looking for suitable companies to invest in.

Whatever the approach, Mr Morgan Williams pointed out that the funds were not just handing out money. He said: “They are not grants, we are giving out investment and want a return.” But he said he believed that providing smaller North-East companies with finance was vital to the region’s growth at a time when banks were more reluctant to lend money. He said: “They are incredibly important to the North-East economy. They comprise about 95 per cent of private sector businesses in the North-East.” “Bank finance is much more difficult to obtain and the cost of bank finance will be huge, as well as the security the companies have to put up to get the money. “It is true to say companies in the past have tended to rely on bank borrowing when they would have been better having equity solutions, so the new funds are designed to help. “We have £125m to invest over five years and at the same time you have a reduction in bank support, so the pressure on these funds will be quite significant. “When banks make a loan it is not a gift. I don’t think people will return to the banks in the way they used to – some businesses have gone bust as a result of the banks wanting their money back.”

Mr Morgan Williams said he believed that if the North-East fund was successful, it would become an international template for other such schemes around the world. He said: “It is the first region in Europe to do this kind of thing, so I think we will attract a lot of attention to see how it goes and will be seen as a kind of role model going forward. Other areas of the world will be copying what we do.”

Dragons’ Den has provided examples of where someone will give a bigger equity stake in their business in exchange for a particular Dragon’s expertise in that field, showing it is not just about the money. But Mr Morgan Williams said he believed there was one area of equity raising where the North-East could definitely improve. He said: “In the North-East, we don’t have enough business angels. If you go to Scotland, there is more of a business angels culture – that is something we need to encourage here.”

Executive Window Cleaner

Matthew cleans up through window of opportunity: Inspired by Dragons’ Den judge Duncan Bannatyne, Matthew Helliwell has a clear vision when it comes to business. For the 26-year-old from Muir of Ord has his own window cleaning company that he set up seven years ago. And like the entrepreneur from the popular television show, he had the drive to do it by himself. “Duncan Bannatyne gives me my inspiration – he started with nothing, lost everything and bounced back all on his own,” says Matthew.

After leaving school at 16, Matthew had around 20 jobs before a close family friend lent him a set of ladders and the use of a car to start his company. And now Matthew uses the latest window cleaning equipment and has even turned “green” by collecting rainwater for his washes. “From the age of 12, I used to help out at a local farm in the summer holidays and at weekends,” says the former Dingwall Academy pupil. “I loved the outdoors and working with animals and couldn’t get enough of it. As soon as I sat my standard grade exams when I was 16 I just wanted to leave and get out there and start working.”



In the couple of years after school, there were stints as a night porter at the Ramada Jarvis hotel and as a stockroom assistant at the Body Shop in Inverness, as well as a parcel delivery driver, kitchen fitter and a green keeper. But Matthew couldn’t settle into anything except as a car delivery driver for Europcar and Focus vehicle rental companies. But then his ex-girlfriend’s father, Doug Stewart from Marybank, who he looks upon as a second dad, heard that a local window cleaner was “thinning out” some of his customers.

“Doug thought I should take on a few and try window cleaning as it was an outside job and I would be my own boss, which he knew I would enjoy,” says Matthew. “I didn’t have a penny to my name at this point so Doug lent me a set of ladders and let me borrow his car and off I went whilst still working part-time with Europcar.” By 2006 Matthew had enough customers to be able to give up the car hire work and go full-time as a window cleaner, carrying his ladders on the car roof, buckets of water in the boot and shammies on the back seat.



That same year he heard about a system which uses 100 per cent purified water to clean glass and has telescopic poles up to 60ft, eliminating the need for ladders. “The poles are made from carbon fibre which means they are extremely light and one man can easily lift and operate a 60ft pole on his own,” says Matthew. “I decided to buy a water pump and filtration system and a cheap pole and brush, and practised on my own house and family’s windows then converted all my customers to this new way of cleaning.” He then gradually built up his stock of equipment and tools and can now carry 650 litres of purified water, two 100m hose reels, four poles of various lengths, plus spare parts.



In 2009, he purchased a hot water boiler for his system which results in superior cleaning all round. “This makes the job a lot easier,” he points out. “Just imagine cleaning your dishes with cold water. How hard would that be?” The hot water system also makes it much easier for him to work in the cold months. “While many cold-water window cleaners would have frozen pipes and hoses in their vans and wouldn’t be able to turn up to a job, I’m able to work away with no problems,” says Matthew.

And because he was using thousands of litres of water each week, Matthew wondered if there was a way of reducing consumption. “There wasn’t really as I still had to use that amount of water for my jobs but I realised I could become more eco friendly and collect rainwater,” he says. “So I set up two 5,000 litre tanks which collect rainwater from the roof of my friend’s farm steading. I’ve never had to fill my tank in the van with tap water since as there’s always enough rainwater stored in the tanks, even in the middle of summer.”

Matthew also recently bought a new Peugeot van, which he’s had signwritten with his company name Clear Vision, to transport all the equipment and water. He has both domestic and commercial clients from Ullapool to Fochabers, although he mainly works around the Muir of Ord and Dingwall areas. And as well as interior and exterior window cleaning, he can also undertake builders’ cleans, UPVC cleaning, conservatory roof cleaning, and pressure wash driveways and patios. Most of his jobs are from personal recommendations and he enjoys taking time to have a blether with his clients. “I have some fantastic customers on my round who really look after me,” he says. “Many will invite me in for a cuppa or even a plate of soup at lunchtime.”

Matthew’s typical day starts at his water collection point at 8am where he fills up and turns on the water heater before he heads off to his first job around an hour later. “I never like to call at a domestic job before 9am, just to respect the client’s privacy really,” he says. “Usually I’ll work until 5pm or even later in the summer months. At the end of each day there are always my books to update and I plan for the next day.” In the future Matthew hopes to expand further into commercial window cleaning, aspiring to one day become a national contractor. “I love being my own boss,” he says. “It can be quite stressful at times arranging everything from insurance to day-to-day job planning but I wouldn’t change it for anything in the world.”

Dragon’s Den Invests in Window Cleaner

An Entrepreneur who turned his £300 window cleaning round into a million-pound empire has revealed plans for national expansion after landing £100,000 on TV’s Dragons' Den. Tony Earnshaw, 25, of Washington, will expand his industrial and commercial cleaning firm into London and Scotland with the help of TV ‘dragon’ Duncan Bannatyne, who has bought a 35% stake in the business. BBC2 viewers last night saw Tony, alongside his sales manager and long-time friend Stephen Pearsons, woo the dragons with their pitch for investment into UK Commercial Cleaning. Ultimately, despite an offer from James Caan for a 50% stake in the firm, the pair shook hands with Bannatyne who has become an adopted son of the North East through his Darlington-based leisure business.

The £100,000 investment is the latest milestone in Mr Earnshaw’s remarkable rise to success in the last five years since he left his job as a wagon driver and bought a window cleaning company for £300. As a 19-year-old, he quit his role at waste management company Biffa and proceeded to transform a window cleaning round for a handful of houses into a £6,000-a-month business in just six months. He eventually sold the company and used the funds to set up UK Commercial Cleaning, which last year generated £370,000 in revenue and is on target to make £1.5m this year. Mr Earnshaw said Bannatyne’s expertise at running a national chain, rather than his money, was the main reason why he decided to sell a bigger share in the firm than originally planned.

He said: “The show was quite scary and nerve-wrecking at times but I enjoyed it, although some of the questions were quite tough. We originally went for 20% but I would have probably gone up to 40%. “Duncan’s investment will allow us to complete our transition to being a fully national company. We now plan to open a London depot by January 2010 – without Duncan’s investment the move would not have been possible.” Mr Bannatyne, who has been in regular contact with Mr Earnshaw since the show was recorded earlier this year, said: “I invested in Tony because he has large ambition and reminds me of myself as a business man when I was younger. “His ambition is to be the biggest cleaning company in the UK, which I believe he is capable of achieving.” UK Commercial Cleaning now employs 30 people – a figure which Mr Earnshaw plans to double in the next couple of years – and has depots in Washington and Leeds. It will launch an office somewhere between Glasgow and Edinburgh in 2011 to service its ever-expanding list of clients which stretch as far as the north coast of Scotland.

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