Businesses born in recession and ready to reap the rewards

York Press: Owen Turner, of United By Design, who represents Treboom Breweries Owen Turner, of United By Design, who represents Treboom Breweries

Six years ago the British economy collapsed. As 2014 sees recovery turn into prosperity, many businesses are enjoying a return to stronger trading conditions. But for those firms founded during the recession this will be the healthiest economy they have ever operated in. Business editor Laura Knowlson looks examples of such young businesses in York.

Six years ago this month saw the start of the longest UK recession on record as April 2008 marked the start of six consecutive quarters of economic contraction. The following 18 months was longest recorded period of quarterly contracting figures since records began in 1955.

During a visit to York last month for the Liberal Democrats conference, business secretary Vince Cable reflected on the crises and prospects for the future economy as he spoke to business leaders at an event at the Novotel hotel.

He said: "It’s very clear that after the worst economic crisis we have ever had certainly in our life times, the last three or four quarters have shown we are on recovery mode.

"This year we will see investment, and we are going to see different sectors of the British economy picking up. Manufacturing has been badly hit but is now recovering. The construction industry, which took a terrible hammering, has now had several quarters of good growth. We have been through a horrendous economic crisis, but the recovery is happening."

Mr Cable's sentiments were reinforced when chancellor George Osborne's Budget revealed the Office for Budget Responsibility expects Britain to reach a point later this year when its economy is finally larger than before it collapsed six year ago.

Delivering the Budget last month Mr Osborne said: "Six years ago Britain suffered a great recession. We had the biggest bank bail out in the world, we had the biggest deficit since the war, and we suffered the deepest recession in modern times.

"But now we're growing faster then Germany, faster than Japan, faster than the US - in fact there is no major advanced economy in the world growing faster than Britain today."

It's only now, as growth returns, that businesses can look back at the turmoil behind us, reflect and learn from the mistakes as they cautiously transform fragile shoots of recovery into solid progression.

However the recession wasn't just about businesses surviving or collapsing. For many it was the time of their creation.

Yorkshire Baker started life in 2008 with eight staff, supplying pastry products to delicatessens surrounding its base in Norton Grove Industrial Estate, in Norton.

Today that small commercial kitchen is now dwarfed by a neighbouring 6,000 sq metre factory – the new £12 million home of Yorkshire Baker and its 200 staff.

Gill Ridgard came up with the idea for Yorkshire Baker, which makes all-butter pastry sausage rolls, pasties, quiches and pies, after seeing a potential demand for high-quality savoury pastries in a market which she described as being value engineered by mass manufacturers.

She said: "It wasn't a conscious decision to start a business during the recession. In all the businesses I have ever set up I haven't worried about what the economic climate was. I don't believe that top end quality products are necessarily affected by recession. If you supply a quality product, and give a quality service, it doesn't matter what the economic climate is.

"Financing the business was very difficult however. Banks couldn't see how a business plan based on selling sausage rolls for £1.50 each could work when you can buy four for £1 elsewhere. I had to self finance it in the end.

"Once the business was up and running I think the recession actually helped us. Even when we set the business up the customer maybe wasn't able to afford luxury items like a holiday, or a new television, but they could treat themselves to a good quality sausage roll.

"People were more aware of their money, and wanted to know that what they were spending it on was quality and something they would enjoy."

After around three years of selling to local delis, Yorkshire Baker secured a contract to supply Marks & Spencer, soon after which the business was bought out by Cranswick Foods to allow for further expansion.

Yorkshire Baker is currently operating at 30 per cent capacity in its new factory, which it moved in to in November last year.

Also set up in 2008 was York graphic design business United By Design, which has grown from the back bedroom of founder Owen Turner's house to an agency based in The Mount employing three full time people.

The business now boasts a client portfolio including global professional services firm KPMG, Leeds-based retail giant ASDA stores and national soft toy manufacturer MetroCo.

Mr Turner's agency also works with a number of local clients including the Yorkshire Wildlife Trust, the University of York, St Peter's School, Norton College, York Mansion House, food companies SLOEmotion and Choc Affair, plus the Elland and Treboom Breweries.

Mr Turner said: "For me setting up the business was about having spent time in the creative sector as a designer and gaining the confidence in my own ability and believing a could the same job as those I had been employed by.

"I was inspired by my employers, who themselves had been through recessions and varying ups and downs.

"The big R word wasn't really up on the agenda for me. Success was down to working very hard, doing what I could to get my name out there, working with different groups to turbo boost the potential of the business."

One of the hardest hit sectors during the recession was the property market, both commercial and residential.

As the previously enjoyed boom time collapsed in early 2008 Yorvale Investments, which had been trading almost 20 years, was amid plans to build a new industrial development in James Street.

Matthew Cormack, director at Yorvale Investments said: "We had seen the potential after identifying there wasn't much new, good quality industrial space being built in the city, particularly in the city centre.

"We had the site back earmarked back in 2007. Then, when the recession started, we had to make the decision whether or not to still go ahead with it.

"We knew it wasn't a great time to come to the market, however it wasn't a big site. We thought there must be seven businesses out there in York that needed this kind of thing.

"There was a degree of nervousness among the businesses in terms of spending, but everyone who came to see the units liked them."

The decision was made to go ahead with the site and Yorvale Business Park was comleted by 2009, with all seven units let within a year.

The business park was then hit by the knock on affects of the recession, with a number of tenants later collapsing.

However this year has seen the park return to full occupany yet again following the latest tenancy agreement with furniture manufacturers Macdonalds York.

In the residential market 2012 saw the launch of a new agency in York in the form of Lancaster Samms. Set up in first quarter of the year, the economy at the time was believed to have been entering a double dip recession, but later revised figures showed growth had infact flat-lined, rather than contracted as previously thought.

Charlie Lancaster, director at Lancaster Samms, said: "Having worked for another company through the downturn in the property market and overall economy, I saw it as an opportunity to open my own business and was confident that through creating a more bespoke type of estate agency we would stand a great chance of being successful.

"Securing finance was the toughest part. Banks simply were not interested in lending to new businesses.

"There were government incentives to assist the banks with lending but the criteria was extremely restrictive. Several lenders turned us down before we borrowed the money on a personal basis.

"With tough market conditions it allowed our company to get noticed at a quicker rate and stand out against our competition.

"Regardless of the external economy, if you offer an exceptional product or service to your customer then you can be successful.

"I’m pleased to say we are in a fantastic position, having exceeded even our own expectations.

"This has allowed us in a very short space of time to pay off our loans and invest in the business through relocating offices, recruiting staff and securing our long term future."

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