JPR Lighting - My start-up Story

Paul Edward Rayner 17 years in business, here’s my story.

15 years ago, whilst I was working as a salesman for a lighting manufacturer, I was specified on a major LED world wide contract called “Yotel Hotels” (the apartment pods are located in some airports around the world). To my surprise the lighting manufacturer I was working for at that time was not convinced LED was the future and declined to accept the order being waved under their noses circa ￡350,000. The consulting engineer (my client) was not happy when I informed him, after all the hard work we both put in to develop this new LED concept. We used diodes as the main light source (something that had never been done before, at least by us). The out of hours studying, the thermal management required, the lumens required, the amount of samples made on my dining table at home, to mention a few. He was so far down the approval process with his client Yotel Hotels that he decided to just change the specification that night to read manufacturer “Paul Rayner – contact Paul Rayner 07972 435042” in the Luminaire schedule and removed all mention of the company name.

You can imagine my surprise when the electrical contractor called requesting a meeting and advised the specification had been changed and what it said. I called my client to talk this through as I could not get my head around this or understand the reason, nor how this would work, after all I’m just a salesman (So I thought). He replied saying I had a big decision to make and he will help where and when he can and will attend the contractor meeting with me.

The meeting was booked for 10 days time due to holidays. On the day, I had butterflies I never felt before (put me on a stage in front of 500 people for a CIBSE LG7 presentation any day rather than this I thought to myself). In we go to a room filled with 15 or so professional people. Everybody new everybody and was all looking forward to meeting little old me. My consultant client and the Electrical contractor took it upon themselves to include my meeting as part a full design meeting to introduce me to the clients / Architects / Engineers / QS’s etc for sign off to procure.

The Financial impact:

This project was for Gatwick / Heathrow and Schiphol Airports the first phase then onto USA and Malaysia after. The main client introduced themselves and welcomed me to the meeting to talk this through. He only had a little background info on what the consultant had done and why. He went on to say I had a big decision to make and introduced me to the Electrical contractor who will be procuring direct with myself (I had not even informed my company what was going on as I did not really know myself at this time, I was just trying to take everything in and understand).

The contractor went on about costs and how expensive this system was and needed a cost saving urgently. I replied saying the company I work for is not willing to take on the project and I’m here to see what else can be done he replied “Paul Rayner is the manufacturer, not them, they are out you are in because of the sample you made is what we need with 5% off the quoted  price”. Now 5%, was always built in as a wholesaler discount so I felt comfortable in saying yes on the spot knowing there is profit in the project. As you can imagine, I was never given the bare costs as a salesman, only the selling price shown on the company quotation, so I was in the dark a bit! I thought I would go with the flow to see what happens next. I had nothing to lose! Not sure what I was gaining, except keeping my relationship with my client.

The meeting was at the contractors premises in Basingstoke, Hampshire and after a very short time the contractor disappeared out of the meeting to the next room, leaving an awkward silence. On his return he handed me an official order that read “To supply LED light fixtures as your quotation No Paul Rayner 1 for the sum of ￡350,000 less 5%” (An order I still have today). The order was made out to ‘Paul Rayner’. Oh dear, I thought what am I going to do and what at a stupid position I have put myself in.

Everyone was happy that an order had been placed with a lead time of 10 weeks and all was in a good mood. “I don’t understand how can I pay for this and give you credit I cannot afford to do this I’m just the salesman” I said, silence came over the room with a few smiles obviously something happening, that I again did not understand. “don’t worry” said the contractor “it will all work out, welcome on board as part of this design team.”

So what was happening? How was I going to do this? What am I going to say to the company I’m employed with? What am I doing? What have I done!

Sandwiches were brought into the room, the client called me and the consultant over. He praised him for thinking outside the box and organising the replacement manufacturer so quickly. Leaving me still in the dark of what’s happening – I was all starting to become a blur!

A piece of paper was put under the clients nose to sign which he did immediately, a few moments later a lady entered the room with an envelope and handed it to me in front of everyone. I opened and saw something that I would never forget. A cheque made out to Paul Rayner for the sum of ￡175,000.00 Zero pence, 50% deposit payment in advance. A smile come over me from ear to ear my jaw on the floor whilst counting the Zero’s on the cheque made out to me OMG what was happening!

Business banking:

The next day, taking the advice from my client, I went to my bank. Whilst at the counter I tried to pay into my personal account ￡175,000 and to my shock it was flagged. I was taken into a side room to explain. They made me feel like a criminal at first, talking through money laundering processes and HMRC, but nothing was taking that smile away from me. I informed them that if they did not want me to bank with them I can find another and take their advice ready for the remaining 50% payment and the 2nd phase.

Soon a business banking manager entered the room and took charge of the situation, a business account was opened in my name of Paul Edward Rayner, sole trader. I cannot tell you the pride I felt at that time having a business account for the first time and the support the bank was willing to give to this new start up, I was so excited!

The Diode Manufacturer:

Now with the cheque cleared I had to purchase the Osram Diodes from somewhere, see the samples were made from samples Osram gave to the consulting engineer, I contacted RS components and the cost was just too expensive. I contacted the buyer in the company I was currently employed with for advice and direction as I trusted him and he was a good colleague. He passed on the Osram salesman details. Osram visited my home a few days later and was just blown away with the sample I had made. Osram agreed to a partial business account but all payments had to be on a proforma basis until trading history established. After a few days he sent me the pro-forma invoice for phase 1 including LED / Drivers / Dali dim ballasts etc, the whole amount required for this project with a total pro-forma invoice value of ￡122,000. I was speechless and in shock trying to calculate the difference in my head and come to terms with what I was doing and the potential amount of money in my hands. I actually started to cry thinking about my wife and children and what this could mean for them as well!

My Resignation:

A few months had gone by since the change in specification from my client. My other clients still buying and specifying and all sales targets being smashed. I made the call to my Managing Director for an urgent meeting. The short storey is, they offered to bank roll my start up and support me with accounts / office / people etc. Now I have made a few mistakes over these last 15 years as a business owner but this one was by far my biggest, I said no! The profit in the project leaves me in a good financial position with cash flow to re-invest so I do not need your help I said, a bad decision and one I regret to this day.

Year 1 2005: 

Osram products delivered to my home, new soldering iron purchased, ￡53k in the bank, local accountant appointed, paying myself a ￡6,000 per annum wage with Dividend payments under advice from accountant. Meetings with contractors and clients well underway and the first batch of diodes delivered well in advance puts me in an incredible position. 2nd payment made on time, invested in 3 log cabins in the back of my garden for Workshop / Office / Store Room, more clients coming on after publications in the LEN on Yotel hotels on the new light source resulted in more and more clients specifying me calling me the “LED man”.

VAT:

Now some will say I should of included VAT in my initial invoices but in my defence I just did not understand the accounts process or HMRC / VAT etc (Back to my mistake on the offer from my previous company). See due to turnover I automatically became VAT registered on invoice accounting which means as soon as one raises an invoice the VAT amount is due in that quarter if you receive your money of not. Oh dear, not only should I of paid the VAT on the ￡175,000 deposit but on all other invoices as well. So the inevitable happened and the VAT man came to my door in quarter 3 of my start up year demanding circa ￡61,000 of unpaid TAX, I called my accountant who at the time was on holiday and could only help over the phone as she did her part and informed HMRC of my debt in letter form (No web based systems then).

Now, this VAT man after a short time obviously new truth from lies and quickly came round to my lack in misunderstanding on accounting and gave me 2 weeks to pay the debt. I had the money in the business account but after it was explained to me the input and output VAT elements I realised the contractor should be paying this, you can imagine what they said, NO! No VAT is shown on your invoices so will not be paying. I contacted my consultant client who just laughed at me and said he would set a meeting with the client. During this meeting I armed myself with all HMRC letters/ demands etc and was just 100% honest and upfront with them RE my mistake. They understood and recommended I rewrite the invoices showing the 17.5% VAT and he will talk to the contractor. Within a week the contractor paid the VAT and I learnt a very important lesson.

After 2 years trading as a sole trader I was advised to go limited with Companies house. Our company reg No 6441313 in November 2007 saw the formation of this company. My reputation as the LED man soon took flight and was pioneering the start of such a great time within our lighting industry. More and more specifications more and more projects and more and more re investment into the business took us on a journey we live and breath today. We have been very fortunate over these years to continue to service some of the same clients (Architects / Consultants / Interior designers to name a few) who have supported us from the start.

Obviously, a lot has happened over these last 15 years. Moving out of working in log cabins to 3000sqft commercial light industrial premises, taking on more staff, starting new relationships and enjoying life. We moved in June 2019 to a 3.5acre site just outside Winchester in Hampshire setting aside ? of an acre solely for JPR Lighting. Offices, Work shop and assembly area, we also have permission from the local Authority to extend the workshop to 3000sqft, a project for 2020/21.  

JPR Lighting is a bespoke / signature lighting manufacturer. We are a family business with family values, working on some worldwide rollouts/ major contracts/ custom built solutions. Amazing partnerships have seen us grow and grow over the years. We are proud of who we are, what we do and the way in which we do it. We would love to be part of your team!

Conclusion:

If I can pass on any advice it would be this.

If you have an opportunity, grab it!

If you think its too good to be true, find out first you never know!

Never feel embarrassed for asking a question, it’s the way in which you ask it

Always be honest, no one can ever ask for anything more

Be truthful to yourself

Learn from your mistakes

Take advice when it’s given, it’s up to you if you use it

You are only as good as the people you employ

Speak to others the way you want to be spoken to

And lastly: Be happy, but never be content - always challenge yourself!

With thanks to all our clients over these last 17 years, it’s because of you why we do this.

I do hope the storey above helps someone make that life changing decision.