He Took Over Another Gas Business After 3 Years As A Sole Trader w/ Dan Giles

Do you think that most engineers realise that their customer base is a sellable asset?

I don't think enough people do it. I think a lot of it may be down to them not knowing what they need to do. The first day that I took over Andy Gass's phone line, I was probably a little bit naive to think that I was going to be essentially answering the phone, taking the calls and working. So yeah, just having systems in place, people there to do, you know, because otherwise you can be quite sort of overwhelmed quickly. So the transition was pretty tricky. I'd say we may have lost a few customers along the way just purely because people sort of panic. They don't know anything about us, so they go to the next person that they do know. But I think what we have done is—

This is the Gas Engineer Podcast. I'm your host, Tulloch Priest, and today I'm joined by Dan Giles, founder of Phoenix Gas Home Care in Shropshire. Dan started as a sole trader in 2020. 3 years later, he acquired the customer base of another local gas business and brought their engineers into his team. Welcome to the show, Dan.

Hi, Tulloch. Thanks so much for having us.

A lot of engineers grow slowly by taking on more work and hiring, but Dan took a completely different route. In 2023, he acquired the customer base of AndyGas, brought their engineers, and used that to fundamentally change the business. It's not something we hear about often in the trades. So today we're going to get into how that actually works and whether it's something more engineers should be thinking about. In a sentence or two, why should people care about this conversation?

Again, if someone's thinking about taking over another business, I suppose this will give them some insight into what's involved, maybe the way that things should or shouldn't be done, and hopefully it'll help them along the journey.

Just to give a little bit of background, you were at a British gas multinational energy company, SSE, before starting Phoenix. Tell us more about your background and what made you Leave to go solo?

Yes. I joined SSE Home Services after a period of time in the Royal Navy as an engineer. Joined SSE basically in a training position for service leavers. Had various roles there from just a gas engineer, training gas engineer, breakdown engineer, and then moved into a training and standards role where I sort of just looked after auditing training engineers in classrooms but also out on site. Then moved into an area service manager's role, which I've done for the last few years, just purely managing teams of engineers that covered the sort of West Midlands area. And then following that, I sort of, well, we were made redundant, the whole field operation, after a buyout from OVO, and they already owned Corby Home Plan, which is a contractor network, and they just bought the 2 businesses together essentially. And yeah, we were sort of given notice for redundancy. But however, they wanted us to contract back to them, which was good in a way. Setting up on our own, it meant that we sort of had a guaranteed certain amount of work, which was part of our redundancy package initially.

Okay, so that was kind of quite a nice kind of way into running your or starting your own business.

Yeah, definitely. I mean, I suppose it took some of the risk away and some of the worries about is there going to be any work, because they guaranteed us a certain amount of work in the first year, which we all easily achieved because Because of the size of the customer base that they had. So yes, and also I'd previously sort of built up a small customer base, you know, just doing things at weekends and evenings, etc. So I had something to go at straight away when I set up on my own. So I wasn't— it wasn't too, you know, too scary, I guess.

And was this something that you kind of planned to do at some point and the timing of this just worked out quite nicely?

It's something I'd always thought about and sort of, you know, thought it'd be a good idea. I'd got quite a few customers that always asked the question, but I suppose having a decent job with the securities around it from being a big company, like, you know, like car, pension, decent salary, I think it probably would always have took that push to get me to do it, which I suppose looking back, I'm glad it happened. People sometimes ask me if I wished I'd have done it sooner, but I think things wouldn't have probably aligned if I had done it any sooner the way that it has.

I think it's always tricky to look back in hindsight because you kind of take the knowledge that you have now and you don't kind of have that same context of like the uncertainty and all the other stuff. So it's just really difficult to look back in hindsight.

Yeah, exactly. Like, you know, I mean, if I'd have done it sooner, I wouldn't have had the opportunity of contracting back to them to sort of like get that guaranteed work, and then things might not have happened the way they've happened to us to be able to take over another bit. You know, it's, uh, it all happens for a reason, I guess. Hi, Producer Alex here, wondering if you knew that you aren't subscribed to the channel. More specifically, 93% of you are not subscribed, and we really appreciate you tuning in right now, but you're missing out on even more interesting content. You're already this far into the episode, so why not subscribe to the Gas Engineer Software YouTube channel? Because showing your support genuinely makes a difference. It's free, takes a second to click, and helps us continue to make the content that you want to listen to. Speaking of, let's get back to it.

So after about 3 years, then it was quite a big move to— or was it a big move to take over the customer base of AndyGas?

I think again, just things happened at the right time. Like, yeah, it was a fairly big move because it meant taking on responsibilities of employing a At that point, whereas previously it was just me and I had a friend that used to contract to me. So yeah, I think it was quite a big move, but it happened at the right time because I was sort of at that ceiling point where I physically couldn't have done any more than I was already doing. So it was either like I either needed to start saying no to customers because we couldn't physically do anymore, or take on another engineer and give them the work and start building a customer base, got a bigger customer base. So I think acquiring Andy Gas allowed things to happen. Like, you know, we all of a sudden had more customers, but I also had another engineer that was able to get to those customers. So it all sort of fell into place, I suppose.

Because I'm guessing if you didn't take on the extra work, if you did employ somebody, you'd essentially be running that engineer at a bit of a loss until you got more customers. So you would need to kind of carry that. Is that correct?

Yeah, definitely. I mean, we needed— we would have needed to grow more because I was just at a point that I couldn't do anymore. So it didn't mean it was going to fill another engineer's week with work. So yeah, it was just the case that everything fell into place. And also that when we did take on Andy Das, that Darren, who initially came over, did want to come with him because that probably would have been a point that we couldn't have done it. We couldn't have taken the business over because I needed someone fast as well to come in and start.

Yeah.

Essentially just doing service work.

Yeah. And obviously the engineers know the customer base then as well.

Yeah. Well, they've got the continuity then of the customers that are expecting Andy Gas to turn up, essentially getting the engineers they already know.

What was actually taken on? Was it the customer list, ongoing contracts? Was it equipment or was it kind of everything?

So really it was just the customer book, customer base. We did take on contracts as well. We haven't got a lot of contract customer contracts, but we have got some. Again, that was another challenge in itself, trying to set up essentially contracts and then find a way that these regular payments can come to us from them. So like, you know, using various software to do that, it was a bit of a challenge, that part. Yeah.

How did the systems kind of change? Because you kind of went from just managing your own work to— was it managing 2 people straight away or just one more engineer straight Straight away, and then a second one joined.

Yeah, so initially it was just Darren, and then Ellie followed on probably just under a year after Darren being there. Their systems compared to ours were very different. Like, theirs was quite manual. I think they did have some software to produce some gas safety paperwork, but things were a bit sort of old and not really fit for purpose. And so us having to bring that customer base into Gas Engineer software just took a bit of time. Because of the way that we wanted to capture it so that we didn't miss any customers, we were just sort of like ringing customers when their services were due and then migrating that information into Gas Engineer software at that point.

Okay, so you had just a nice clean record and then you built up the history and stuff as you went.

Yeah.

If you could just kind of walk us through what the actual transition actually looked like. You've got Andy Gas customers that were actually were used to dealing with Andy Gas and now they've been told it's Phoenix. How did you kind of manage that, the customer kind of change there?

Yeah, so like I say, it was difficult because not all of the customers that were like existing Andy Gas customers were aware of what was happening. So it was difficult when we were ringing round customers to book work in because they were expecting to speak to the person they'd normally speak to on the phone from Andy Gas and they were expecting the person on the other end to work for Ambigas. So yeah, it was tricky. And just trying to— the ones that weren't aware, trying to build their trust at that point, because all of a sudden we're trying to tell them we're going to come and do their service. They're not really aware of who we are, even though we'd operate in the same area. These customers have generally been using Ambigas for years. So the transition was pretty tricky. I'd say we may have lost a few customers along the way, just purely because people sort of Panic because they haven't got someone they can call. They don't know anything about us, so they go to the next person that they do know. So I think that we did lose a few customers along the way—not not very many—but I think what we have done is worked really hard to sort of get those customers back, and we found quite a few customers have come back to us just through word of mouth. Really, they probably know someone that's that used to use Andy Gas that's now using us. They know what a good job we're doing. They've they've come back to us. So yeah, the transition was tricky, and obviously the most important thing for us taking on that customer base and having engineers there to serve. service those customers, that we wanted those customers. So we were just trying to do all we could to sort of get them on board with us.

Just like really rough figures, what kind of percentage would you kind of guess that you kind of lost initially before you managed to get some of those back again?

Oh, I mean, I'll put it— I'd probably say it was down into single figures, really. Maybe not even 10%. It wasn't a great amount of customers that we lost. It's just frustrating when, when you do lose any customer. For me anyway, I like to retain customers and build that trust and rapport and For me, that was just a little bit frustrating because I knew what a good job we did. But obviously for them, all they've got is the phone call at the start to sort of make a decision on.

Yeah, I'm just kind of asking just in, you know, for other engineers that are thinking of, you know, taking over a book of business, if they have kind of like a, just a kind of a guideline, you know, how much they could actually learn, just lose, you know, for their calculations. That was all.

I was just going to say, I think with And his business, I think it would have been different had time allowed. You know what I mean? Because it needed to happen quite quick with a couple of the engineers on maternity leave. It sort of forced his hand a little bit. It just had to happen fast because he got all these customers he'd looked after for a lot of years that all of a sudden, you know, if he couldn't get to them, he felt he was letting them down. So that's the reason he wanted to do do it that way. I don't think if it have Had the time, you probably would have done it that way.

Yeah, I have spoken to— there's been another company that's been on for the podcast, and they— well, they sold, but they did a gradual handover, right? So that way, you know, the existing company could have, you know, was saying, you know, here's your new engineer, he's going to take over. And I think that was a very successful way of doing it.

Yeah, I think I'd work better, but I think With ours, because it happened so fast, we didn't let— it was difficult to let enough people know what was going on, like, quickly. And because of the processes that— and systems that Andy had or hadn't got in place, because this— how the system— how his business run, it was a bit more sort of old-fashioned, the old, you know, bits of paper. It was difficult for him to get that message out to people quickly.

Okay, yeah, because you'd need to just manually go through, etc. Yeah, I can, I can I can see the problem here. That would definitely be challenging. Yeah. So a lot of engineers kind of reach a point where they want to grow, but the idea of hiring from scratch, building slowly from a customer base feels painful. So is taking on another business a realistic option for most people or more people?

I think definitely it is. I think what's important is knowing what you've taken on or what you're actually going to be getting. Because if it is just a customer base, then you're essentially buying the goodwill of your customer. If you've got a big service contract portfolio, then with regular payments coming in, then obviously that makes things easier. Or if you were buying property and assets as well, I suppose, yeah, it's just down to what you're buying really. I mean, for us, like I say, it was just a customer base and we were lucky that the customers stayed with us. But Really has taken that on. We could have been sort of taking on essentially nothing because customers might not have wanted to come across to us. And then we've taken on engineers to service that. And then you've got all of a sudden find that work.

Yeah. Yeah. There's definitely some risks involved. And it's, if the situation was different and you had more flexibility, I'm guessing if there was more of a, like a warm handover or something like that, that would have lowered the risk.

Yeah, definitely. Because then, you know, like I said, you've got that transition period then when they still are dealing essentially with the other business and their systems and processes, but also being able to sort of, you know, let the customers know what's going to be happening rather than it sort of being very quick. And sometimes I'd like to have them not knowing what's going on.

You also brought on engineers, Darren and Ali from AndyGas. Tell us about what it was actually like integrating somebody from somebody else's team into your business. What was that transition like?

Well, I suppose because of my background at SSC managing teams, it was sort of fairly straightforward for Aurus. I think I felt more that I was integrating into their team, if I'll be honest, because like their customers, they've worked together, they know each other, how they work, even though I did sort of know them both personally a little bit. So I felt like I was more integrating into their team. And then when we've got that sort of working relationship. It was more of like how we're all going to work together. But, um, yeah, I mean, it all worked out pretty well. I, I'm all for like with engineers allowing them the freedom to do things the way that they like to do things, as long as obviously everything's being— boxes are all being ticked. Because I find that if you start trying to manage the way that they do things, things like the way that you prefer to be done, is that things get missed. So I just allowed them to carry on with the freedom the way that they do things. And they, yeah, it all works out, works out well.

Was there anything kind of big that you needed to change to kind of fit in or to make it work?

Well, I suppose the main thing is being a business owner and being a sole trader previously is that when people ask you what time you work till, you say till you finish. But whereas when I've got staff coming on board, you know, they've got working hours. So for me, it was just like Recognizing the end of the day rather than just trying to get the job done. So that, that for me, and I still struggle with that now a little bit, to be honest, you know, but for me now, I just allow them to, you know, to carry on and get their job done at the end of the day, and I carry on working if I need to.

Yeah, I don't think that's, um, you know, just you. I think all business, small business owners do the same. Yeah, you don't have a choice with that. Yeah, a lot of engineers, we get quite a few engineers that contact us saying that they're retiring and they just kind of shut the doors without sort of selling the business or passing it on. And it does seem such a shame, you know, you know, you've spent all of that time building up that goodwill, etc. It would be nice to see that kind of, I don't know, passed on in a different way.

Yeah, I guess a lot of times family and that are involved and maybe it gets passed You know, down generations maybe, I don't know. I mean, um, and also I suppose companies don't necessarily set themselves up for sale really, because a lot of the times it's just, you know, a customer base essentially. There's no like contractual stuff around it. But maybe I'm hoping that we can change that at some point.

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I think initially I'd rather like hand something down to my son if he's interested. I think that's ultimately where I'd want to see it going to start with. But yeah, I mean, I think if I built the business to the right place and it was a saleable business and he wasn't interested, then yeah, definitely. I think there's a lot for me to do between now and then to make it saleable. I think at the minute I'm still operating Is like, well, it'd still need me to operate at the minute. I'd need to get it to a point that it works without me, which again is a challenge for me because I'm sort of a bit of a control freak and like to hold on to stuff. But, um, yeah, I think I'd need to, to do quite a lot of work to get it to that point at the minute.

How old is your son?

He's 13.

Okay, so it's a little way, you've got a little bit of time there.

Yeah, yeah, he's actually out with one of our engineers today because he's off school.

Yeah. Okay, good. And do you prefer being more on the tools or more kind of running the business? Which— do you have a preference for those?

I need to find a middle ground, really. And if I'll be totally truthful, that's where I'm at at the minute. I'm needing, like, as our business and our customer base is growing, which it is constantly growing, I'm needing to be away from the tools more, but I'm still needing to be on the tools at the same time to, to meet customer demand. So yeah, I like both. I like to be able to get away from in front of a computer and running the business in that respect. And I like being on the tools, and I get satisfaction from being out and repairing boilers and installing. I enjoy that side of it as well. But I think ultimately, for me to move in the direction I want to be moving in, that I need to start stepping away from the tools more and get get some money maybe to, to take over from what I'm doing.

Do you think that most engineers realize that their customer base is a sellable asset?

I suppose it depends. I mean, like, some, some business owners obviously just go to work to earn a living off, you know, not build a business. So I guess the ones that just go to work to earn a living, essentially, maybe just more like sole traders, and maybe not. But the ones that are trying to build a business, I think they've probably all got an end goal of wanting to It to be worth something at the end, not just shut the doors and that's it done.

Yeah, I think that even for people like a sole trader that's done a business, you know, build up the customer base over a long period of time, I still think that is incredibly valuable just because you have all of that goodwill. And it's so it's valuable to the actual engineer, but it's also for those customers because suddenly you have all these customers that need to go find another gas engineer. If the gas engineer that's retiring can find another gas engineer and, you know, that other engineer is going to look after his customers as well as he did, you know, I think it works for both sides.

Yeah. And I think that's the difficult thing is finding the right person because like you'd say, it's your customers that you've had for years. So although it is about selling the business and the business being worth something in terms of the monetary value, it's also about, you know, those customers of yours that you've Been with that family for years. You want to make sure that they're going to receive the service that they used to, because you're essentially probably going to still see them about because you're a local businessman. So yeah, it's just I don't think enough people do it. I think a lot of it may be down to them not knowing what they need to do to get it to that point as well. Like I said, people just go out and do their job and don't necessarily focus on the business aspect of it too much, just the doing part and getting the job done and getting the job done well. But You know, that's where, where I feel like I need to start moving in now is the business side of it and getting it more to a point that it can operate with various people missing from it at different times.

Yeah, I think, I think, um, I definitely agree with you. You can build like a business, but I still, I would still definitely argue that sole trader that hasn't put any thought into actually how to sell a business or whatever, that book of customers is, you know, it is extremely valuable. You know, it's just a kind of a— if it can't be passed on to anyone, at least you as an engineer can look at another engineer's work and think, yes, this person will do a good job and will look after those customers well.

I think it's difficult to put a figure on it as well, depending on how the business has been run, you know.

Yeah, that's always going to be tricky, whatever business you sell.

Exactly.

Anything else that would be useful for somebody thinking about this?

I think just preparation, like making sure that you've got everything in, sort of like systems in place to deal with it. People is important. If I'll be honest, when I started, the first day that I took over Andy Gass's phone line, I was probably a little bit naive to think that I was going to be essentially answering the phone, taking the calls, and working. And it got to about 11 o'clock on the first day, and I was meant to be fitting a house full of rads, and I hadn't even put one radiator on the wall. At that point, I rang my wife and said, I think you need to finish your job and take, you know, and come and work for us, essentially. So yeah, just having systems in place, people there to do, you know, because otherwise you can be quite sort of overwhelmed quickly. And, you know, if you're not getting back to people or not doing what you say you're going to do, you're going to lose those customers pretty quickly.

That would have been quite a tricky month or whatever notice period your wife had.

Yeah, she worked in a school as well, so it was pretty difficult. So yeah, it was just, she got out as quick as she could and I just managed the best as I could. And luckily it was in the summer months, so it wasn't as busy. But if it had been in the winter, there would have been no chance that we'd have coped.

Would you do it again if the offer came up again?

Yeah, I think so. I'm one of those that likes to look at the next thing, what's coming next. We've got stuff going on at the minute within the business that's a bit like another step for us as well. So yeah, definitely do it again. Some things that I might change, like I said, just being more prepared. It was the first time we'd done it, so I didn't really know what was going on. It was fairly informal the way that things happened. There was no sort of real handover as such because it happened fairly fast. But you just manage, and that's just what I always do, and just get the job done the best I Well, thank you very much for your time.

Really appreciate it, Dan, and I hope that's helpful for other engineers that are out there. Thanks, Adrian.