George Forsyth

Drew Forsyth & Co has been around for decades. Can you tell us about its origins, how it evolved, and your role in the business today?

George: The company has quite an interesting history.

My dad, Drew Forsyth, started in the industry around 60 years ago, working in the West End of London for affluent homeowners doing interior fit-outs.

About 50 years ago, he moved to the north of England, where he met Martin Moore — as in Martin Moore Kitchens. Drew and Martin effectively formed Martin Moore Kitchens together. Drew was the manufacturer, and Martin was the salesman and designer. That was the relationship.

20 years ago, they went their separate ways and dad set up Drew Forsyth & Co.

We started manufacturing for ourselves while continuing to manufacture for other companies.

Today, we have our own showroom, which sells our own furniture, and we also manufacture furniture for around ten well-known brands in the UK. 

We manufacture complete kitchens, bedrooms, boot rooms, cinema rooms, libraries and all the rooms that would typically form part of a high-end residential project.

My role within the business is as Managing Director.

Who are your ideal customers, and whom do you refuse to work with?

George: The business is split into two distinct customer groups.

The first ideal customer is a kitchen studio owner or founder looking for a British-made product delivered directly into the client's home, but who also wants complete creative freedom. We're not tied to a strict catalogue or a particular range. If someone can design it, we can build it. There are very few limits.

We call ourselves truly bespoke. The word bespoke gets thrown around far too much these days, but we genuinely consider ourselves a truly bespoke British manufacturer specialising in high-end residential cabinetry.

Our second ideal customer is the end user. Because we have our own showroom, we also deal directly with homeowners who are renovating, extending or building high-end residential properties and need kitchens, bedrooms, libraries, boot rooms, utility rooms and everything else that comes with that.

In terms of whom we refuse to work with, probably people who are shopping purely on price because that's not what we're about. We're about serving customers who are looking for the best product, a product that is going to last, and who are willing to make the right level of investment to get that.

Rising costs have affected everyone. We have seen National Insurance increases, material inflation and energy costs. What has actually hurt the business most, and how are you dealing with it?

George: I get asked this quite a bit, and honestly, I would say none of those things are the biggest issue. The real challenge is the wider cost-of-living impact.

Our team members are under enormous pressure at home. Without being bullish about it, they need pay rises. The old 3% increase just doesn't touch the sides anymore.

As an employer, if you want to retain good people — especially when you've got team members who have been with the business for twenty years and worked for both my dad and now me — you have to do right by them. To do those people any sort of justice, you're talking about increases of 5% to 10%.

How are we managing that? The reality is we're not managing it so much as dealing with it. We're having to grow as fast as we can and as profitably as we can in order to offset those additional costs. Every year it becomes a question of whether we can afford to raise wages to that level or not.

National Insurance obviously hurts because it is a direct cost to the business, but as a manufacturer, without a good team you've got nothing. That applies to business in general. So the choice becomes simple: do you refuse to do it and lose good people, or do you do it and accept lower profits?

One of my dad's principles was always putting people before profit. That phrase gets thrown around a lot, but as a family business we genuinely try to live by it as much as possible. Retaining good people is not something we compromise on.

Some independents are cutting prices simply to stay busy. What do you see happening if things continue this way?

George: Everyone has to remain competitive and everyone wants to earn more money. But when projects are roughly 50% materials and 50% labour, the overall cost becomes very expensive. 

At a certain point, price dictates the market. The fact is, the bottom end of the market is effectively dead. The £5,000 bathroom and the £10,000 kitchen are becoming almost impossible to deliver.  

Material costs are difficult because they are linked to fuel costs, manufacturing costs and wider economic pressures. So labour costs have to come under control. You can't have a situation where the total cost just puts us out of work. That's where I think this leads.

Over the last five years, particularly since Covid, we've ended up in a dangerous place as an industry. We've reached a point where highly experienced tradespeople are earning rates that aren't massively different from someone who has just finished an apprenticeship and bought their first van. That creates a strange marketplace.

Personally, I completely support the idea that a builder, joiner, decorator or tradesperson at the top of their profession should earn as much as a lawyer, accountant or doctor. If somebody has spent twenty years mastering their craft, why shouldn't they be rewarded accordingly?

I speak regularly with people I use as barometers — whether that's builders' merchants, tile shops or similar businesses — and many of them are already saying that the lower end of the market is dead. That doesn't affect us directly because we've always operated in the high-end residential space. 

However, if I were serving the lower end of the market, labour costs would be the first thing I'd be looking at. Unless labour costs stabilise, you risk killing the market entirely.

One position we've always taken is to bring people onto payroll and reduce our reliance on subcontract labour. That's always been our ethos, although I appreciate that's not practical for every business owner.

Customers can browse kitchens online, request brochures and even use your cost estimator without leaving home. Why is the showroom still important?

George: For us, it comes down to the product. When somebody compares Drew Forsyth & Co against another company, the biggest differentiator is the product itself.

Earlier I mentioned customers who are shopping on price. At a certain point, we'll do everything we can to get them into the showroom, because what they're really buying is the designer they're dealing with and the product itself. Unless they can physically touch and feel that product, how are they supposed to differentiate between one company and another? 

Everyone says their service is the best. Everyone claims to be the best company. The customer can't really judge that until they've actually worked with you. The showroom remains hugely important because of that.

How do you think AI is changing customer behaviour?

George: I think the mass market is heading somewhere very different.

My prediction is that Mrs Smith will take a photo of a wall using her phone. She'll have a mood board saved from Pinterest and Instagram. AI will connect those things together and she'll simply tell it to fill that wall with a kitchen, bedroom or whatever furniture she wants. The AI will generate the image, that image will feed directly into the basket of IKEA, Howdens, B&Q or whoever else, and then she'll press buy and it will arrive at her house.

I genuinely think we're only a few years away from that becoming normal.

The big sheds spend millions on advertising every year. Consumers are inundated with their marketing. What do you do to stay relevant amongst your customers?

George: You can't be all things to all people. You have to identify who your ideal customer is and then market to those people as effectively as possible. You've got to find your people.

What the big sheds do is what I would describe as wide-net fishing. They're throwing a huge net into the sea and trying to catch everyone. Somewhere within that giant net are the people they actually want to speak to.

Our approach is more like sport fishing. You get on a boat, choose the right bait, use the right hook and try to catch the specific fish you're looking for. That's the difference.

In practical terms, we base a lot of our marketing on the questions customers ask us. We literally interview customers afterwards and ask: what was important to you, why did you choose us, what concerns did you have? 

We then turn those answers into marketing. That's how we do it. Because then you're speaking directly to your people.

If Mrs Smith is worried that installers won't turn up on time, we create content explaining how we manage projects and why our teams show up when they say they will. If she's worried about a company going bust halfway through an installation, we create content explaining how deposits are protected and what safeguards are in place.

The specifics vary, but the principle is always the same — listen to what customers are worried about and create marketing that addresses those concerns directly.

What is the most important number an independent business owner should be watching when the market slows down and orders stop coming in?

George: There are so many levels to that question.

At the highest level, I'd be looking at fixed costs and the bank balance. Those are probably the two most important numbers. If you've got your fixed costs under control and you've got money in the bank, you can weather almost any storm.

If somebody asked me for just one number while I was sitting on a beach somewhere, it would probably be net profit or net loss. Ultimately that's the scorecard.

But again, it depends on the context. Some people would answer the question differently. They'd say: how many leads do we have, what's in the pipeline, how many deals are we closing? Those things matter too. But if I'm a million miles away from the business, knowing how many leads came in this month doesn't necessarily tell me very much.

If I were trying to protect myself against the downside, I'd be looking first at these numbers — fixed costs, cash in the bank and net profit. 

If a business owner selling budget kitchens wanted to move upmarket and attract more affluent customers, what advice would you give them?

George: My first instinct was to say get your showroom right. But then I stopped myself because we work with plenty of businesses that don't have showrooms. So maybe that's not the right answer.

It's an interesting question because it's quite relevant to us and I've seen this play out a number of times.

The biggest thing I would say is this: stop talking about price and start talking about product and service. That's probably the underlying shift.

I don't operate in the budget end of the market, but I would assume that most of the conversation there revolves around price. If you want to move away from that market, then you have to stop making price the centre of your message.

You need to start talking about craftsmanship, quality, customer service. 

If you want to attract a different customer, you have to start having a different conversation.

What is the hardest lesson you've learned in business, and how has it changed the way you work?

George: There have been so many lessons over the years. The hardest lessons are usually the most expensive ones.

There's probably something in there around extending credit, but the lesson that immediately comes to mind is customer concentration.

We don't allow any single customer to represent too large a percentage of our manufacturing sales. The reason is simple — it introduces a huge amount of risk.

A lot of businesses become dependent on one major customer — that might be a builder, an interior designer or a developer. That one customer effectively becomes the business. But if they disappear, the business has a serious problem.

So one lesson I've learned is to dilute that risk as much as possible. If you win a very large customer, try to win several smaller ones alongside them. Don't put too many eggs in one basket.

The second lesson is not to take customers for granted, particularly long-term customers. It's very easy to assume that somebody who's worked with you for ten years will continue working with you forever. But that isn't how business works.

If you have customer concentration, then you need to service those relationships relentlessly. Take them out for dinner. Send birthday cards. Stay in touch. Do all the things people consider cliché. Because if that customer represents a significant portion of your revenue, you can't afford to assume they'll always stay. Someone else is trying to win their business every single day. You need to make sure they have no reason to leave.

More importantly, you need to get out from behind your desk and actually find out what's frustrating them. Find the friction points. Find the things your business is doing badly. Find the things that annoy them. Then fix them.

I think that's one of the biggest mistakes people make. They focus on delighting customers, which is important, but they don't spend enough time finding out where the customer is struggling. You need to do both.

A good example happened recently. I visited a customer we'd worked with for five or six years. During that visit I discovered that another designer inside their business was buying around 50% of his kitchens from another supplier. 

I didn't even know that was happening. Straight away I realised we potentially had an opportunity to double our revenue within that account.

When I dug deeper, I found the reason. The other supplier offered a lower-priced product. The interesting thing was that we could make that product ourselves. We simply weren't offering it. 

That conversation led us to look at introducing additional door styles and products that would allow us to compete for that work. Had I not visited that customer, I would never have discovered any of that. 

That's why getting out from behind your desk is so important. Go and find out what your customers are struggling with. Go and see where they're experiencing friction. Those conversations often reveal opportunities that no spreadsheet ever will.

As markets become more challenging, this becomes even more important. You have to look at those relationships collectively. It's not just about asking: what are we doing to survive? It's also asking: what are we doing to help our customers survive? Because if they grow, you grow. If they succeed, you succeed.

You're now looking to acquire independent kitchen studios from owners who haven't built an exit strategy. How do you identify these businesses, and why is this such a big focus for you moving forward?

George: A lot of small business owners run their companies in ways that make perfect sense from a tax perspective, but not necessarily from an acquisition perspective. On paper, the business can look very different from reality.

For example my dad built a fantastic business and, to many people in the industry, he was something of a legend. But ultimately there was no succession plan. There wasn't anybody waiting to take over. The business also wasn't particularly positioned to sell.

In a roundabout way, this is actually something I helped my dad with. Going through that process of preparing my dad’s business for succession made me realise there might be a bigger opportunity here. 

Some of our customers were approaching retirement. Some local competitors were in a similar position. So we started having conversations. The more conversations we had, the more we realised there could be something in it.

We looked at several opportunities before finding one that was the right fit. It was a direct competitor of ours. A great little business operating in the high-end British-made sector. The owners had been joiners since leaving school. They loved being joiners. But loving joinery and building a sellable business are not necessarily the same thing.

There are lots of companies like that. Five or six people in a workshop somewhere producing fantastic products, but the business itself isn't necessarily structured in a way that creates value beyond the owner.

Rather than taking advantage of those people, we've started approaching things differently. We'll look at a business and ask: is this actually worth buying? Quite often the answer is no. Not because the owners aren't talented, but because of how the business is structured. 

Then the conversation becomes: what would need to happen over the next few years to make this business genuinely valuable?

For many owners, the value they've built isn't necessarily in the company itself. It might be in the factory they've paid off. It might be in the retail premises they own. That property effectively becomes their retirement plan, whether they see it that way or not. We can help them think differently about that.

The reason this strategy appeals to us is because it achieves two objectives.

The first is obvious: we can remove competitors from the market.

The second is more interesting — I genuinely love these hyper-local brands. These businesses aren't trying to become huge national chains. They've built fantastic reputations in their local communities. They don't spend huge sums on marketing because they don't need to. They've been serving the same towns for decades. The children of their original customers are now coming back to buy kitchens themselves. I love that. 

Having built a family business myself, I understand the value of that kind of legacy. So we're looking to start conversations with owners who maybe can't see the wood for the trees. 

Sometimes we'll tell them: “If you make these changes over the next couple of years, we'd be very interested in talking again.” Other times it may simply be: “If you're ready to step away now and don't want to battle through another recession, let's have that conversation today.”

What’s something you’d like people to know about Drew Forsyth & Co.?

George: Two things really.

Firstly, if somebody owns a brand or business in the high-end kitchen space and is considering selling, we're always open to a conversation.

Secondly, if anyone is looking for a British manufacturer to work with, we're equally open to those conversations as well.