Behind the business with Compass Costs
Compass Costs is now the largest Claimant Only costs practice in the UK, with almost 100 staff. Managing director Phil Hodgkinson takes Bdaily behind the business.
What key challenges has your company recently faced?
We do have an on-going challenge which is keeping up with our continual growth. I started the company
in 2002, remortgaging my home to set up Compass Costs, and leasing out a small office above a derelict
bakers in Wigan, with just one employee.
Within a year, we had taken a lease on a 2000 sq. ft office at the Tea Factory building in Liverpool city centre and grown to employing 15 staff, then the following year we merged with Law Costs Draftsman Armstrong & Company of Southport and grew again. In fact, in our first three years, we moved offices three times to help us cope with increasing staff numbers and our growing client base!
This month, we’re celebrating our tenth birthday and the firm now boasts more than 100 staff and a projected turnover for 2012 of £8 million. Projections are that the firm will have doubled again in size within the next two years.
Obviously I’m not complaining about the incredible success we’ve had, but it does pose some challenges.
Our sector is very specialised, and it is difficult to recruit quality people, meaning we have to trickle new work
into the business at staged intervals, and hold back a little at points.
What is your biggest achievement over the past 12 months?
We entered into a very lucrative contract with a large organisation 2 years ago, and despite some teething
problems, we have performed so well that we have recently been awarded a 3 year extension of the contract for the client. This was a real achievement as the decision to extend the contract was based on our high performance. It’s something which I’m personally very proud of, because it highlights just how far we’ve
come as a company and how good the team I have in place now are.
What is your biggest focus for the coming year?
Continuing to build on our growth curve will be a big focus for 2012. We’ll be looking at opening a second
office in London later this year, and at getting into the city market. Finding a solution to our current
recruitment problems will also be something we’ll be looking at closely because we want to be attracting the
very best talent in our industry. We do have a number of ideas already, but we currently have vacancies to
increase our workforce by 10%, and then by a further 10% again by June.
If you had to choose one top piece of advice for someone just starting out in business, or currently
operating within your industry sector, what would it be?
I think that the focus in business has changed over the last 5 years. There are always numerous business
opportunities in any sector, and the key to success is not just about providing the best product or service any more, it is about providing the highest standards of customer care. This involves good communication and a real attention to detail. Relationships are everything, and you have to stand out to be successful.
Can you share with us your view of the current landscape of business, in this region or generally and where your organisation sits within it?
We are lucky to be working within a niche sector which will always grow, even in a time of recession, and we
are also lucky to be financially secure because of that.
However, since the ‘recession’ first hit, banks have taken a very tough line with both existing companies and
any potential new entrants into business. They have moved from funding ‘anything that moved’ to funding
With less funding available for new start-ups, it’s becoming increasingly difficult for entrepreneurs with a
good idea to grow a successful business from scratch the way we have, which in turn, is stifling some of the
economic growth we so desperately need to see.
The Government are taking this line on taxing heavily any businesses who actually make profit, rather than
encouraging them to re-invest for growth by reducing tax on profit or even providing company tax breaks
for re-investment, which I think is wrong. They need to be doing more to encourage entrepreneurship,
innovation and stimulate growth.
In essence, I think there needs to be a major re-think at that level if we are to come out of recession any
time soon, but the government deficit is so high that I doubt it will happen. We have to bear in mind that
this problem is not one caused by this government or even the one before that. It is a historic issue which
has grown up in the banking sector over the last 30 years and it will take a very strong leader to have the
guts to do what is necessary, and bring in some tax lowering measures at business level to encourage re-
investment and growth.
It’s a tough business climate out there for many firms at the moment, there’s no doubt about that – but I also
think that businesses - certainly in our sector at least - are remaining fairly positive in their outlook which is
good to see.
This was posted in Bdaily's Members' News section by Phil Hodgkinson .