It’s fair to say Tim Gray’s first steps as an entrepreneur didn’t get off to a flying start. Working as Sales Director for leading UK milk transporter manufacturer Melton Tankers, Tim commanded a six-figure package.
But after the UK dairy industry was deregulated in 1989, the rules on replacing tankers changed, and Melton’s market share – at one point estimated to be 80% of the UK market – began to shrink.
Tim could see the writing was on the wall and began exploring a new business start-up with fellow employee Chris Imrie. A couple of exploratory confidential conversations with TCL clients were somehow leaked to the owners of Melton. Tim and Chris were called into the Managing Director’s office and summarily fired!
Broken windows and bank managers
The next day, Tim woke up with no car, no job, and a big mortgage. Surprisingly, he found the moment quite refreshing.
The same day they found and rented “a horrible but adequate building”, and Tim rang around to get some business. The first order came from a milk haulier in the Yorkshire Dales to refurbish a single tanker. Tim and Chris both took bank loans to get them through their first job.
After a year in business, TCL moved to new premises in nearby Brighouse – five times larger than the workshop in Leeds.
Tim’s warning to his previous employer proved accurate. In 1994, Melton went into liquidation, and hauliers began to look elsewhere for new tankers. Orders started flooding into TCL’s office in Brighouse, and by the end of 1995 the business was turning over £6.5m.
The price of growth
But this rapid growth came with a price. Although turnover had soared, the team was working flat out, yet the business only increased profit by £2,000.
Something needed to change, but Tim’s prophesy was coming true. With a new deregulated market and fewer owned tankers on the road, hire rates went through the roof, and TCL seized the opportunity.
This time Tim borrowed £14,500 from his dad, and bought TCL’s first old tank. The team refurbished it, financed it, and rented it out. That enabled two more tanks to be acquired, which in turn led to four, then eight, finally peaking at 280 tanks on hire by the time that TCL was sold.
This opportunity and Tim’s dad’s small loan enabled the rental business to start. This was also the start of true success for TCL, because rental was where the profit was; and it was the rental income which proved attractive to TCL’s eventual acquirer.
Rent hikes and burnout
In 2000, seeing the rapid growth and success of TCL, the landlord decided to increase its site rent by 200% overnight. The team endeavoured to negotiate, only to be served seven days’ notice to quit.
That morning, in what both shareholders saw as a serendipitous act, Chris drove into their office a different way, spotting an empty shed two miles away from TCL’s premises. Approaching the owner, they struck a deal and moved in seven days later.
But for both Tim and Chris, the landlord episode was a sobering warning, and shortly afterwards they located an appropriate site and built their own factory.
In finding a site, the TCL deliberately set a ceiling on size of 11,000ft² to improve work-life balance. The new building allowed them to build four tankers per month and no more.