Sir Tom Farmer revolutionised the auto-repair market in the 70s when he founded Kwik-Fit – and made a tidy fortune in the process. Now 63, he is energetically injecting his hard won resources into an array of UK start-ups.
‘Repairing cars is the most glamorous job in the world – and tyres are the sexiest objects around, with their smell of rubber and tread patterns!’ So gushes Sir Tom Farmer, the animated founder of the ubiquitous Kwik-Fit car repair chain who remains as focused and excited about the car repair business now, as he was when he landed his first job (as a lowly stores boy in a tyre firm) 48 years ago.
Enthusiasm is what he does best. We’re finally having a coffee just after an inspirational speech he has given at a business conference, an interview delayed by the willing courtesy he extends to the many individuals asking him for advice.
Beneath the passion and chivalry though lurks an ambitious, competitive streak. He admits he hesitated against speaking at the conference – only being convinced by the fact that his son (who has founded a technology-related business) was speaking too. ‘I couldn’t allow him to beat me!’ he says with a wink.
All of these traits have been instrumental in ensuring that the various business empires (car repairs, car hire, property) that Farmer has presided over have been nothing short of stellar. The most celebrated, of course, is car exhaust and tyre business Kwik-Fit. He founded it in 1971 and sold it nearly 30 years later (when it had profits of £62 million and 11,000 employees) to Ford with a price tag of just over £1 billion.
From humble beginnings
Having left school at 15 and worked in various low level jobs – as an oven cleaner, white van driver and sales rep for a tyre firm – Farmer decided to go it alone after a promised bonus went unpaid. He set up a tyre and accessories supplies business with little more than a hundred tyres, and an advertisement in a local newspaper offering them at prices which undercut everyone else.
‘It was illegal to do this [due to the retail price maintenance laws of the time], but at 23 years old, it didn’t bother me! A newspaper wanted to write an article about me and I saw this as an opportunity to exploit this and said Michelin and Dunlop were trying to run me out of business!’ he recalls.
Four years later, having built the business up into 15 outlets, he sold out, retired (at the age of 30) and moved to the US. But this episode was short-lived, and he returned to Scotland in 1971 to launch what was eventually to become Kwik-Fit (the idea was sparked off by his experiences in the US of seeing companies specialising in car repairs).
‘I sold this business in 1974 to a small public company which subsequently got into tremendous trouble, so I did a deal and took the company over [renaming it Kwik-Fit] – for ten per cent of what they had paid us! The market cap was £225,000 and I eventually sold it for £1.2 billion – a bit of a good return!’ he chuckles.
But there is a touch of regret when he is reminded that Ford then sold Kwik-Fit in 2002, for a mere £330 million to venture capital company CVC Partners – rumours at the time were rife that Farmer was looking to launch a bid to buy back the business, but he strenuously denies this.
Stick to what you know
Although adamant that he has no desire today to start a new career – he acknowledges that ‘I’m in the position where my life is more pleasant than it’s ever been. I’m in control of my own time’ – Farmer seems far from resting on his laurels.
He is keen to spend time as a sounding-board for young businesses, and, through his company Maidencraig Investments, has been busy supporting start-ups. At present there are 23 companies in the portfolio, with investments ranging in size from £25,000 to £1 million. He also rescued Hibernian Football Club from financial ignominy in 1991 and is the current chairman.
Since selling Kwik-Fit he has found it hard to stay away from what he loves best – tyre and automotive repairs – and last year launched a venture called Farmer Autocare, mainly concentrated in Scotland. The concept is similar to that of a franchise, although Farmer prefers to use the term ‘co-ownership’.
‘We help people who want to start up their own car repair business, with each centre launched with £100,000 of share capital. The co-owner invests between £25,000 – £40,000 and we put up the rest of the balance – we use my name as marketing clout,’ he explains.
A leap of faith
While retail, cars and property are Farmer’s fortes, he is open to businesses from other sectors, although he will not be swayed on certain points – a company must boast ethical standards. A devout Catholic, Farmer has also given generously to charities, was a former chairman of Scottish Business in the Community and is the chairman of Scotland Against Drugs.
‘We will only invest in what we believe will give us a good return – and in businesses with ethical standards. It’s a simple philosophy. We invest in start-ups in all sorts of industries – we can’t expect to have knowledge about everything. The key factor is “do we have faith in that person?” If not, we won’t go further. If it’s only worth giving it a whirl, it’s not worth doing,’ he affirms.
Like every successful entrepreneur, Farmer’s golden touch has failed on occasions, most notably in expanding the Kwik-Fit business at too rapid a rate overseas and introducing new services without doing the requisite research.
‘We decided to expand Kwik-Fit into France but we never did market research to see if there was room for us – in the end we found the cultural differences too much and couldn’t handle it. We lost £4 million in three years. The second time we tried, we lost £5 million, then we got it right third time.’
If there’s a lesson in all of this for the start-ups he backs it’s this: ‘You have to have the courage to face up to problems and change direction if necessary.’
Building a customer-focused empire
The thread linking his entire career however is the unrelenting focus on customer and employee experience. For Farmer the reasoning is simple.
‘I grew up with tremendous support from my peers and learnt very quickly that you get on with life if you look after your mates. You have to be smarter than your competitors and have the energy to keep driving the business forward. And it comes down to people – if you don’t have a better team than the competition, you are living in a very difficult world,’ he stresses.
His other mantra is the importance of ‘people who want to work to live, not live to work.
‘People work for money – it doesn’t mean money is the ‘be all, end all’ but we share profits – if people put in extra, they get that extra back. Financial rewards are important – it gives people the opportunity to improve the quality of their life. Ultimately people will enjoy their job provided they trust the organisation and its leaders.’