Entrepreneurship Case Studies - Terry Canning
Interview with Terry Canning from Farmwizard on Friday 18th February at the NIBEC Building in Jordanstown
Did you always have entrepreneurial tendencies?
A little bit. I guess when I was younger I had a tendency to sell things. He came from countryside and he used to have easy access to chestnuts and he remembers taking them into town and selling them. Other than that nothing major.
Have you always wanted to have your own business?
When Terry was younger he always wanted to own his own business. He got into the old routine of when he graduated his ambitions moved to working for something like a big telecommunications company or some of the big corporations and once you get in there all you want to do is get promotion. Up until final year of college, then his ambitions moved towards working for a national telecommunications company but after some time working in that environment, he was with one of these companies for 4 years, then he worked for Vision Information Consulting company, then he worked for a multi- national telecommunications company for 4 years during that time he worked abroad and took some time out traveling for 4 months. Terry said that he was lucky to get a placement with the company and they gave him the opportunity to work abroad and give him time out to travel. When he came back the redundancies were starting to happen again, the rumours, it was every three months they were put under the threat of being made redundant. The final time it happened Terry had just came back from traveling and the redundancies started again and he thought it was time to thing about doing someone else for himself. This was a big motivator in putting him into the page of starting his own company. Although his software team was fine and there were no redundancies, it was simply the threat and the recurring threat that gave him the incentive to go and do something.
Any dreams/ambitions from an early age?
He used to be in a band from the age of 15-18 and this was his major ambition that it would progress.
Key traits in your personality?
He is quite outgoing, and focus and likes to get a job done. He likes to keep an eye on things and get things delivered which he feels is important.
Why did you go to university?
University was almost expected in his family. There were a lot of family pressures, Terry come from a farming background and his older brother was destine for the farm therefore he was destine for university. There was always pressure, that is where he was expected to go.
What did you study?
MEng Electrical and Electronic Engineering.
How important was your university education?
The MEng was very good. At university you've got the electronic engineering and you've got the Masters, the BEng and MEng. The MEng takes an extra year, on professional studies. Terry recalls doing a marketing project which involved setting up your own business plan, doing questionnaires. It gave you a taster, it was at a small level. There were aspects of the degree that weren't just technical that Terry can look back on and say that was very useful. He didn't expect to be using it at the time but it was very good.
What were the key skills/attributes which you developed during your time at university?
Terry worked for a telecommunications company over a summer which was a great experience. Which helped develop himself and helped him get better results after the placement. It taught you how to think and approach subjects and problems.
Did you have any exposure to entrepreneurship/business planning during your time as an undergraduate?
Yes, in the MEng in their marketing project. You had to come up with an idea, it could be any idea and you had to see it through all the way to business plan, questionnaire, check the market. A number of them got together and followed this through.
Extra-Curricular
What other situations/experiences have fuelled your development? (part-time work, placement, gap year, travel etc.)
Terry used to be in a band and played at a local level. He feels that by going to clubs and selling yourself at a local level, get tapes done. Terry feels that this trained him a lot for what he is doing now as you had to think of publicity campaigns, putting up pictures for gigs, things you learnt as you went along and Terry feels this certainly helped.
The travel helps in a few ways, you don't get afraid of distances. For example Terry had someone interested in his business from Canada and some would think that Canada is a long way away. However you could jump into a plane and go and see it, there's an opportunity there. You start to realise that the world is quite small and you can get to places quickly. Also when dealing with cultures, it looks like Terry is going to be doing a little bit of business in China . So travel gives you two things; one that gives you the opinion that the world isn't very large and that there are opportunities out there. Second thing is that it gets you accustom to cultures, there are a lot of times when your doing business in a lot of countries especially China it helps when you know the personalities of the countries.
What sort of jobs did you apply for?
As Terry had done his placement with a communications company, he applied to them and got the job quite early so quite happy to get in with them. He only applied for this one job.
What did you learn from this process?
You start to learn about relationships, how you relate to your colleagues, how important relationships are, things that you don't learn generally at university. Just more the intricacies of working with people becomes more obvious when you move into full-time employment.
When did you decide to break away?
It was with Nortel after returning back from traveling, there was more redundancies also work which he was involved in was being shipped back to Canada again because Nortel are an off-shoot, of a Canadian company and any time there was a down-turn, things were shipped back to Canada, so this was the big push to go ahead with it. Terry said that he had the idea for Farmwizard a few years ago and never acted on it until he got the incentive to make the break.
Own Business
What provided the catalyst for you to set up your own business?
Two catalysts; the first was the fact that there was going to be more redundancies and the unhappiness with the multi-national company he worked for and also he got a lot of help from a local enterprise company. He went to them initially with the idea for help through the Go-for-it scheme. Terry said that Go-for-it was not a great experience. It was hard to get through the contacts that he was given. Terry had the good fortune of coming across another scheme called SMART. He got in touch with the programme manager there, who was very keen on the idea and brought him in and was very encouraging. The programme manager told Terry he should definitely apply for the SMART award as his idea definitely has potential. With this encouragement coupled with the redundancies made Terry make the break.
Where did you get the idea/inspiration from?
Coming from a farming background, Terry was able to see that there is a lot of information in farming at the minute. There is a lot of information that farmers need to assimilate, there are various legislative records that farmers have to keep. There doesn't seem to be much in the area of internet technologies or information technologies. There are a few people but the systems are not that impressive. Terry was able to apply his previous experience into farming to come up with what he believes is a good product.
What research did you carry out?
In terms of putting forward the business plan, Terry said that he knew quite a bit already from coming from a farming background. Terry spoke to Department of Agriculture people. He listened to their advice in terms of developing the product. The other side of research was the marketing research, Terry explored the number of farms, percentage of farms using computers, analysis of farm sizes. Also competitive analysis.
What business skills did you possess and how ere these developed?
Terry feels he hadn't many business skills at the beginning however after starting he feels that you are constantly learning and really have to look for advice from people. Terry has a business angel, someone who bought part of the company and provides mentorship and advice, so Terry learnt from him. Terry also had a deal with Grant Thornton the accountancy people, they would help out with business consultancy and things like that, so Terry learnt through them. He feels he was very naive to begin with but by asking questions and asking advice that Terry was able to constantly learn and this has built up through the experience. Also Terry knew a little about cash flows and theoretical things but it has been mostly learning on the job and learning from others advising him.
Setting up.
How did you go about putting your plans into practice? Terry contact Go-for-it initially but having bad experience he then discovered the SMART award. Terry had a business plan which he had drawn up with the guidance of the Invest Northern Ireland website that had detailed exactly what should be in a business plan and done research and spent evenings working on it until he produced the business plan then he pursue the Go-for-it scheme which didn't work out very well and then he discovered the SMART award and then he went for the award.
What were the key steps in setting up the business? Terry feels that funding is one of the key steps. Also idea and decision are also key.
What about funding, business planning etc. - what help did you get in this respect?
Terry said that the Invest Northern Ireland website was very good for the business plan. Terry worked with a guy on his placement year on a different project, whom he had kept contact with and who also had been quite entrepreneurial himself with a number of internet projects. He liked the idea of Farmwizard and he bought 20% of the company, so he invested some money and then the SMART award which is 75% funding, so when the two were put together this pretty much covered funding for a year.
What about premises?
Terry started off working from home, in the attic writing software which was fine back then for the first step which was to develop a product or at least develop something at least he could show demonstration. After developing it over 4 or 5 months, Terry had something to show and starting going out to see Department of Agriculture folk and farmers and getting their feedback and opinions and then he got his first contract from the Department of Agriculture so Terry knew that he needed to start growing the company and he couldn't really employ someone working from home so he came to the premises in Jordanstown and he now has one other person working for him.
What problems did you encounter?
Go-for-it did cause problems. Terry feels that the problem with Go-for-it is that it is presented as a one-stop-shop, that you come to Go-for-it and you immediately have access to all of Invest Northern Ireland and this is not really the fact. It would be great if it was and Terry feels with a bit of training or whatever to the local enterprise agencies you probably could get to that point. You just had to hunt and keep going and look for other people in Invest Northern Ireland . Terry's experience was that he would leave his business plan into Go-for-it (his first point of contact) and they were to go and check everything for you and you wait a week and still nothing has happened and then you wait another week, he just had to say that "I'm not waiting on them anymore". Your going to go yourself and get the contacts and constantly keep pushing this was one problem. But once Terry got through to SMART, Invest NI have been fantastic.
There are always lots and lots of problems. Terry explained that he is now in the situation where he is looking for more funding and sometimes you get knock-backs and you always have to keep picking yourself up and going, and going, and going.
How did you solve these?
Terry feels that all problems can be solved the same way by constantly working at them and looking for the solutions and keeping going. Terry provided a good example of a problem two weeks ago that their main competitor were phoning their customers and offering them money to take their product for 6 months to run an evaluation. So you hit competitor problems like that and of course the solution is to report them to the Office of Fair Trading and they got a very sharp slap for this, as it is a very illegal thing to do. So there are constantly problems and you just have to keep going.
Any comments on recruiting staff?
Terry found that recruiting people was very difficult. When Terry won the SMART award there was room for another person to come and join the team. Although Terry didn't want to recruit someone and then 3 months down the line the business wouldn't work and he would have to make them redundant, so Terry decided to wait. Terry then won the first contract from the Dept of Agriculture in September and he then decided it's time to go. Terry though it would take about a month to recruit someone however he found it very difficult to find someone with the right farming skills, technology skills and sales skills. One guy started in December and he lasted two days. Terry puts it down to the fact that the contract was very exclusive. But eventually he recruited someone else who is great.
What about networking? Who/what are the key people/source in your support network (sources of positive encouragement)?
In terms of general sources of encouragement, Terry feels that the people in Invest Northern Ireland are fantastic. Terry has his client executive where he can go with his problems, he has various mentors, when Terry was recruit someone he had a Human Resources mentor who was fabulous. He also has a business angel as well, so in terms of business support he has a lot.
In terms of business success in the market Terry has contacts in the Department of Agriculture, he had Canadian contacts. The importance of these people is not what you know it's who you know for example Terry had the good fortune to have an ex farmer union president as one of his first customers and he has an OBE and is a very high profile guy. He was very encouraging and Terry was able to use his name on publicity materials which was fantastic. The farmers see him and would say if he's using it, it must be good.
How have you gained respect within the sector?
People do respect you when you start your own business. They respect you because you give it a go. Terry can see that with his colleagues and then they get a surprise when it works. There is a culture with people in Northern Ireland not wanted to take steps in case of failure but Terry found that he got a lot of respect from his colleagues and peers from making the jump and more respect for keeping it going. Terry wasn't so sure from his family perspective or outside colleagues if would see it as particular good thing however the respect is there.
At present.
Where are you now?
Back in June 2004 Terry got the demonstration started, he got the Department of Agriculture involved in the project. Terry first contract was with the Department of Agriculture for 25 subscribers for two years, he got another 20 beef subscribers quite recently. Terry has sold the system directly to almost 20 farmers now, paying themselves using the system through Department of Agriculture and Rural Development (DARD). Terry feels that he is in a very good position now, as a lot of farmers have heard about the system now, as he has had a lot of press. Also he has had Campbell Tweed, from the Farmers Union and he came along in November and done a publicity campaign. A lot of farmers have heard of them and when they phone farmers up they seem very curious to find out more, therefore Terry said that the business model is starting to work in Northern Ireland . They are not quite self sufficient yet, in that they are making enough sales to cover their salaries but Terry believes that is coming quite soon. Terry said his next step is to take it outside Northern Ireland . He had an agreement to run a trial in the Rep of Ireland, Terry also has had interest from a Canadian company and a New Zealand company and have a proposal in with a company in China to deploy Farmwizard in some of the big state farms. They haven't been won yet, so all the revenue to date has come from DARD and direct customer sales. With that proven revenue stream, Terry hopes to raising more cash through looking at investments from the like of his university tech or a national growth fund, so Terry is looking to move to the next stage and needs cash to do that but because they have a proven revenue stream he is finding that people are very keen. One of the big things is that when you have an idea and it might look brilliant on paper and whenever you go to investors they will say have you any customers for this and if the answer is no it is very hard to get investors and if the answer is yes then it becomes much easier.
How does it all work day to day?
The emphasis when running your own business is you constantly change, it constantly needs revised day by day. Terry's normal day at present is that he will come into work and people have registered on the website or they have sales leads. Mark the Business Development Manager will maybe be out on the road visiting farmers and closing sales. Terry has to write software because there is new features that the farmers want, there is new features that they could sell and things to fix from the first version. A lot of Terry's time is spent writing software and how else he can promote the product through a new marketing campaign. Mark is out and about picking up new sales and working on new adverts. This would be a typical week.
Any comments on the logistics of running a business?
It is very difficult to plan in a small business. Terry quoted a statement that when he came from his last job they use to say "fail to plan, plan to fail". The idea is that you have to set out your plan for the next 6 months or whatever and it's very difficult to do this in a small business as you constantly have to review what your doing. You might try something like for example initially they thought that if they would create enough hype and publicity, farmers would just come along and register. Terry found that this was not the case that instead someone was going to have to go out and close the sale. Farmers seem quite happy when you arrive up the lane and seem impressed when you show them the mobile phone and how its done and then they'll say they will take it. Also the old cliché "Cash is King", it is very important to keep your eye on the cash flow of the business.
Present
What are your plans for the future?
The first step is to get the next stage funding secured. It seems to be a very slow process as Terry was hoping to get this sorted at the end of last year. Luckily Terry said he is not depending on it. Also he hopes to explore other countries. Terry can explore but he cannot grow the company until he get the next stage of funding.
Where do you see your business in the next 5 years? Terry sees Northern Ireland having a good subscriber base and also the Republic of Ireland and Great Britain about two other countries. He would like to be in five countries in five years.
Any plans for diversification?
Not really, sometimes people would come up and especially when your in the Invest Northern Ireland circles you meeting other entrepreneurs sometimes you would get offer (in Terry's case because he is a research and development guy) things like consultancy contracts. Terry has always said he will avoid these and stay focused on his product until it reaches it full potential. There is always be the option that Terry could diversify into more technical type work as this is his background but this would only be if he strapped for cash or something.
Any other dreams/ideas still unaccomplished?
No not really, just grow the business.
Financially
Did you put yourself in debt to start out?
No, Terry said he was very fortunate because he got a voluntary redundancy package and he got the SMART award and he got the business angel funding so that helped. With the SMART award Terry's salary didn't change from when he was in Nortel, he has put in some money but not a huge amount. Terry said that he has seen entrepreneurs who haven't taken a salary and that is fair enough if you have tried to get awards and things but some haven't even tried and you just think jeepers you could make it so much easier for yourself, get your business plan first and then go through the channels.
How long did/will it take to break even?
In terms of breaking even it is difficult to say. If it was only Terry in the company they would be breaking even and with Mark in the company they have probably already broken even, just in terms of growth hard to say. In Terry's current business plan which is for 3 years, with that financial model in mind, showing business established in 4 different countries and having 3,000 people by the end of the 3 years given the amount of marketing etc to get that far it could be 16 months away.
How long before you earned a proper living?
The good thing about SMART is that it is just like receiving your salary so "earning a living" was not an issue.
Incubator based
Why a university incubator?
This incubator unit was free for 3 months.
What value/support did it add?
In terms of support there are two levels of support, firstly peer support Terry stated that you have guys that you sit beside and you swap ideas and learn from them they would share technical ideas. Terry also had contacts that he was able to pass on to other peers. Secondly, it's good also to work with other people as from Terry's experience working alone in the attic for 5 months was lonely. Thirdly, the contacts in the incubator centre helped with publicity campaign.
Partnerships
Why did you decide to set up a partnership?
It is a limited company and there are no partnerships other than the business angel in the background.
In retrospect
Self
Does reality meet your expectation? Now? At the outset?
Not really, it's completely different. it changes all the time and you just have to respond to this change, you have initial targets that you think your going to meet and sometimes you think you could do better, sometimes you do worse. You think about how your going to get to a certain point, it just changes all the time. In terms of the stages of setting up the company and going through the stages there is a great excitement, you get a great buzz, it's like a roller coaster and then some things don't go well, it up and down, it's very exciting and good fun. Terry enjoys this side of things.
What key skills do you possess which made this process possible?
The obvious one was technical as Terry had to write the software himself. Relationships is very important, this is a skill that Terry developed through working in many companies that you learn about the relationships and contacts. Terry feels this has been vitally important in having good relationships with people in Invest NI and having good relationship with people in the Dept of Agriculture. You will find that if people don't like you or if you annoy somebody once you will find it could ruin your career, you've got to get on with everybody and getting people bought into your idea as well is very important.
What are the key things that you have learned from the process?
Change is the whole thing, it changes so much day to day. There are text books skills that you learn in sales, you learn how to close sales with people, through experience you learn what to say and what not to say to people. You learn how to run a business, how to put together a business plan, our last business plan was put together through working with Grant Thornton but by working with them you could do your own next time. Learn business things, and learn coping with change, you learn to keep at as well. You learn not to build up your expectations e.g. the Canadian company that showed an interest didn't develop, yet more has happened since from New Zealand and China . So you learn to focus on your bread and butter which is our farmers in Northern Ireland
What have you got out of the experience?
Very exciting year and a half and Terry has enjoyed the experience. It can be dull sitting in an office working for someone all the time, when your just waiting on a Friday whenever you start on a Monday and your time start to slip by, and as the months slip by, the years slip by and then suddenly your dead.
What are you most proud of?
Terry is proud of getting it all to work. Initially he was proud of getting the SMART award, then he was proud when he got the first contract and farmers started to use it and like it. It nice his family coming from a farming background and see it and having their colleagues and peers talking about it, you certainly feel proud from this point.
What are the positives of being an entrepreneur?
Freedom is quite good. It great to have a certain way of approaching something and coming up with a strategy and basically nobody to answer to and give it ago.
Others
How important is it to "do your homework"?
Hugely important in terms of getting a good business plan, it can make it so much easier for you if you have a good business plan and you can get it sold into the likes of Invest NI and the various grant bodies and investors.
What are your top tips for other would-be entrepreneurs?
Get the business plan in first, stay focused on your project. People do have a tendency to get way-laid and start losing focus, in term of cash. Don't give up too much of the business for investment. Don't look for investment too early until there is revenue because you get better evaluations of the company. Good relationship are important, be sure you get on with just about everybody you meet and don't make any enemies.