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Chief who puts his faith in hard work

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Published Date: 16 August 2005
Phil Smith says that he owes his success in business to the Mormon church, and donated £1m to the organisation after he sold his business earlier this year. But building a multi-million-pound company is not the hardest job he has ever done, as he explained to Business Editor David Parkin.
NOTHING he has experienced in business has been as tough as being a Mormon "missionary", according to Phillip Smith. When he was in his early 20s, the chairman of £37m turnover fire and flood repair business Chem-Dry spent two years knocking doors on Belgium and France, telling householders about the Church of Jesus Christ of the Latter-day Saints.
"I was working from 6.30 in the morning until 10.30 at night, six days a week. I got six people in two years to join the church, which in Catholic countries is very good. It was the hardest job I have ever done."
Mormon missionaries must fund themselves during their two years. Smith used money he had been left by an aunt.
"I wouldn't swap the experience for anything. It was the most positive experience I have ever been through."
Indeed, one of Smith's 11 children – aged from six to 26 – is about to embark on missionary work herself.
That commitment to the Mormon church remains as strong. Earlier this year, when Smith sold Chem-Dry to the stock market quoted Midlands group Homeserve for £18m, he donated £1m of the £10m he made from the deal to the church.
Tithing – every Mormon donates 10 per cent of their income to the church – provides the funds which keeps the church growing. Smith says his money will go into a central pot to help build and maintain churches and the 7,000 missionaries working around the globe.
Have things changed for Smith, who is a member of the 100-strong congregation in Beverley?
"What has really heartened me is that people didn't treat me any differently. It has hardly been mentioned." So he wasn't the toast of the Mormon church then? "Certainly not."
Smith joined the Mormon church after two American missionaries knocked on the door of his Wolverhampton home when he was 19. "I heard their accents and invited them in to talk. I wasn't a churchgoer at the time – just for hatches, matches and despatches."
So they convinced him to join?
"It's about being convinced by the Holy Ghost, it's about making up your own mind."
Ironically, Smith says that nowadays he doesn't like people knocking on his door.
He says his parents reacted to his becoming a Mormon in different ways.
"My mother was very upset; she thought it was going to be a fad and I was going to join some sort of weirdo cult. My father was easy-going about it. My mother died last year but came to church every week in later life, but didn't join the church. She realised that it was probably the best thing that I ever did."
Finding religion didn't immediately provide a clear path in life for the young Smith. After completing a degree in metallurgy at Swansea University, he then went on to do a Phd. "Work was like a dirty word to a student in the 1960s."
At the age of 26, he eventually started looking for work, and failed to get a liaison role within the West Midlands engineering firm, TI. "They derided me at the interview for taking two years out to be a missionary. I thought on the way out: 'This company has missed out on a good person'."
Smith then saw an advertisement for science teachers and became a physics teach in Walsall in 1975.
"The school is only a mile from Homeserve's headquarters and the headteacher now is somebody I had taught with when I was there!"
Smith says working in an inner-city school was tough. "I didn't know how to deal with young people; I had no teacher training whatsoever."
He found the children lacking in ambition. "I tried to be their friend. I created a form council which organised events every week. Anybody who gave me a Christmas card got a bar of chocolate through their letterbox at midnight on Christmas Eve!"
After a recent visit to the Friends Reunited website, Smith discovered that a number of his former pupils are doing rather well. "One of the kids I taught is a pilot in California and flies film stars around."
Smith then got a job as a lecturer at Dudley College of Technology. He says it proved a contrast. "It was like going from a concentration camp to a holiday camp because students at the college wanted to be there."
After a couple of what he describes as "fortuitous" promotions, Smith became a schools inspector.
It was at his niece's christening, in Beverley, that his brother-in-law David Fewster, a former Viking Radio disc jockey, offered him a job in his fledgling cleaning business.
Chem-Dry is a franchise business which was founded in the US by Robert Harris, a member of the Church of Jesus Christ of Latter-day Saints, and was launched in Britain, Australia and New Zealand by fellow Mormons.
Fewster launched it in the UK in 1989 in a small corrugated-roofed building in Beverley, around the corner from where the current HQ is now based.
Smith took over running the firm in 1992 when Fewster moved to Switzerland to work in public relations for the Mormon church following a "blessing" he received from a church elder.
The business was struggling in debt, he was confronted with visits from the bailiffs, but Smith knew it couldn't be as tough as the missionary work he had done in Europe.
"That year we sold a record number of franchises and paid off all our debt in a year and we were never in debt again."
Chem-Dry grew rapidly and
now has almost 700 franchises held by around 230 franchisees across the country and has deals with seven leading household insurers.
It has recently signed up national cleaning deals with both the Hilton and MacDonald hotel chains.
Homeserve repairs burst water pipes and blocked drains and has contracts with all the UK water companies as well as providing cover for electrical wiring and central heating.
The company, which had pre-tax profits of £51.7m last year, sees the acquisition of Chem-Dry as part of its plan to provide a one-stop shop to carry out home repairs for insurance companies.
And it's a growing area, as the home emergency market in the UK is worth around £4.3bn a year.
Chem-Dry has 210 employees – with more than 1,000 working for the franchises – and operates from its national control centre in Beverley; in the year to April 30, 2004, it made an operating profit of £2.6m on turnover of £37.1m.
"We started out doing carpet, upholstery and curtain cleaning and moved into flood and fire disaster restoration in 1993," says Smith.
"Now that is 75 per cent of our business working with the insurance companies, and we also are the market leader in accidental damage, so if someone has paint spilled on their carpet and claims on their insurance, the insurance company will send Chem-Dry in. I think we are the last piece in their (Homeserve's) jigsaw.
"From an insurance point of view if there is a fire or flood in a home then one company will do all the repairs like electricity, plumbing and there will only be one invoice."
Smith is staying on for three years as the chairman of Chem-Dry – incentivised by some hefty share options – and says he is as motivated as ever.
"I wanted to stay on out of loyalty to the franchisees, the people out there doing the work. What really made me do the deal was not just the money but the people I was dealing with (at Homeserve]."
Smith almost sold the business to Homeserve some years agobut the deal fell through.
However, the relationship he had built with the Homeserve directors meant that he was
keen to talk when they came knocking at his door again last September.
He says that the deal gives the combined business a much better chance of building market share in a very competitive market place.
"I might sound slightly
perverse but we have good competition, it keeps you lean and mean, not fat and lazy. People don't go into business because it's an easy life, but because it's a challenge."
He said the money from the deal is not the be-all and end-all.
"Somebody once said if youlose your wealth you lose
nothing, if you lose your health you lose something, and if you lose your character you lose everything.
"When I leave Chem-Dry, I want to look everybody in the eye and say I did my best. I don't want to be going out under a cloud, but on a chariot.
"Somebody said life is not a career; it's a mission."
david.parkin@ypn.co.uk

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