Innovation just ain’t easy. Take Ecclesfield-based R3 Products’ experience as an example. A group of entrepreneurs with well-established track records comes up with the idea for recycling waste plastic.
Their plan is to turn it into a range of construction products that will save developers tens of thousands of pounds, by cutting the amount of wood, concrete and bricks that is routinely sent to landfill. They choose Sheffield, because, with its steel heritage and their local connections, they reckon it will be easy to tap into the sort of power they need to run the heavy-duty plastic-processing machinery they need.
It looked like they had got all the pieces for the jigsaw.
In reality, the fact that R3 is up and running, exporting to the Middle East within a year of opening a factory and poised to launch trials of a pioneering new product is a tribute to the tenacity of its founders.
The achievement, as chairman and former DavyMarkham chief Kevin Parkin readily admits, is also thanks to the support the company has had from advisers Barber Harrison & Platt and Nabarro, bankers HSBC, Sheffield Chamber of Commerce and Sheffield City Council.
“The biggest surprise we had was that three guys with grey hair and pretty decent track records were turned away by just about everyone we went to for funding,” says Kevin Parkin.
“People would court us for months and when it became obvious to us they had no intention of getting involved, they would tell us: ‘Great concept, brilliant idea, come back after you have been in operation for 12 months.’ One bank told us it would only back a business with a plan that showed it would turn over £5 million in the first year. When I asked them how many companies they had found to back on that basis they said they had yet to find one.”
Fortunately, someone suggested they approach HSBC, who straight away told the firm that it would be far harder than they thought to get the asset finance they were seeking and came up with an alternative.
“They were the only bank to give us that advice,” says Kevin Parkin, adding that HSBC’s help had been “exceptional”.
Although asset-based finance wasn’t on, the bank did offer to provide facilities, if R3 could find a third party willing to invest and offer unlocked sources of funding.