When Mel Butler left his £80m turnover business and started a new one from scratch it was a huge gamble but one that is paying off. Lizzie Murphy reports.
It was February 2015 when the chief executive of boiler installation firm Help-Link and a fellow director packed their bags and left the company they had founded 17 years before.
The incident happened after Mel Butler and chief operating officer Alan Dickinson clashed with their private equity backer NorthEdge Capital over the future direction of the business following a £11m investment in the firm, which valued the business at £30m, in 2013.
The directors remain tight-lipped about the circumstances surrounding the split but safe to say there was a difference of opinion on the future strategy.
It was a difficult time for the Leeds-based business, which had grown to a turnover of about £80m. Help-Link started to lose money and ultimately made around 200 redundancies from its 459-strong workforce before it was eventually sold to rival Homeserve for £5m.
“It was heartbreaking,” says Butler. “I lost all my friends and a lot of people lost their jobs.”
Three years later and we’re now sitting in the office of his new business BOXT, an internet-based business selling fitted central heating boilers, which is beginning to disrupt the traditional market.
Butler, 48, is chipper and with good reason, the company is already projected to turn over £18m or £19m in its first year.
The business, launched last March, is run by Butler, Dickinson and former Help-Link finance director Andrew Kerr. Ironically, it is situated right next to the Help-Link headquarters at Thorpe Park in Leeds because Butler owns the property.
Keith Jones, the former managing director of Wolseley’s Plumb Center, is chairman in the venture, which employs about 35 people.
Butler has invested £4m to date in developing a website for BOXT that steers consumers through the decision-making process and also allows them to select the boiler brand, delivery date and installation time.
“The way we built Help-Link was a very normal process and it was very customer-focused,” Butler says. “This time round we said we had to come back with something new.
“Ultimately, we wanted to disrupt the market place because it was totally old fashioned and everything had been done the same way for the last 40 years.”
BOXT’s business model does away with salesmen, surveyors and call centres and the whole process is done online.
“A boiler is like a washing machine nowadays,” he says. “Customers usually just want to replace their combi-boiler with another combi-boiler. Salesmen aren’t really specialists so we knew we could make the process uniform.”
Orders taken via the website are dispatched via the merchant directly to the customer with everything the installer will need boxed in one self-contained package.
“We say our guys are like Uber,” says Butler. “We have a database of about 250 qualified engineers, who we’ve checked out. They can ‘put their light on’ to say they are available to work and the customer can then see what slots are available to them for installation.”
The engineers are rated from Trust Pilot reviews so those with the highest reviews get the jobs first.
And because the engineers don’t have to pick up the boiler from the merchant’s counter in the morning, they can arrive earlier to install the boiler. “That’s one of the big wins for the customer, along with price,” Butler says.
The company, which is 45 per cent owned by Bosch, according to Companies House, currently fits 50 to 80 boilers a day nationally and has big plans to expand its products and services.
“This is the first time anyone has made this process possible online,” says Butler.
“We’ve had a few people try to copy us but what nobody else has done is invest in the platform like we have and build out the back office to make the customer journey as smooth as possible.”
His next game-changing tactic is to launch same-day delivery for customers who order before 10am.
“It will totally change the industry,” he says. “So if your boiler breaks down you won’t be without heat.”
He also plans to increase the number of products on the website and branch out into smart technology.
Customers seem to like the new model. The company is currently one of only six businesses in the country with a score of 10 out of 10 on TrustPilot.
“One of the problems is that the process is so quick, it can frighten people and that’s something we’ve got to overcome,” says Butler.
“People think it’s too good to be true. But what we’ve done is mega and the box has changed the industry.”
Wakefield-born Butler, who is dyslexic, became a heating engineer after school, initially working for Wakefield Council.
He went on to set up his own plumbing business but almost went bankrupt at the age of 23 when work dried up during the recession in the early nineties.
He went to work for a plumbing and heating firm but when he found out the company was worth £22m he joined forces with a couple of colleagues and set up a rival firm Help-Link, which provided boiler installations and maintenance for both the public and private sector.
In 2010, Help-Link launched its ‘game-changing’ deal, offering a new boiler with 10-year manufacturers’ warranty to compete against rivals offering only cover on old boilers.
Butler, who is married and has a daughter, is quite modest when talking about his Help-Link achievements and when I ask him how he would describe himself, he initially says “fat.”
But then he adds that he is an entrepreneur.
“One of the great things about not being academic is that you get everyone else to do the work,” he says. “How you build a bigger business is by delegation.”