Illustrious Homes: growing by contracting

Illustrious Homes is a Camden-based building contractor which works on construction projects for clients in social housing, commercial construction and private residential building.

Camden Council is one of Illustrious Homes’ newest clients, which will help the company to achieve further growth over the coming years.

The company’s journey did not begin with public contracts. Founded a decade ago, Illustrious Homes started as a bathroom and kitchen fitter in the private sector.

But, as managing director Kunle Barker explains, the business really only took off when it looked at undertaking public sector contracts.

“A friend told me it would be worth looking at working for councils and local authorities. Although they can be lower margin, you get continuity of work and solid contracts, which is great for cashflow,” he explains.

Kunle Barker, CEO of Illustrious Homes

Kunle Barker, CEO of Illustrious Homes

Barker decided to give it a try. The company sent digital marketing brochures to the main contractors in London, and got its first lucky break by winning a contract with Lakehouse, as a subcontractor fitting out kitchens and bathrooms.

Lakehouse, one of Camden Council’s main contractors, works through a long-term five-year framework contract to undertake all of the major refurbishment work. As is usual in the construction industry, this work is then subcontracted to smaller businesses to deliver and provide the work.

Illustrious Homes’ first contract with Lakehouse was part of a scheme by which Camden Council encourages its suppliers to promote supply chain opportunities to SMEs and sub-contract locally to support local economic growth.

Thanks to its relationship with Lakehouse, Illustrious Homes were able to build a reputation as a key subcontractor within the social housing marketplace. This has also allowed them to run training courses, training school leavers and also winning refurbishment contracts directly.

“Lakehouse’s MD, Sean Birrane, was extremely helpful by promoting good business practices within his organisation, which allowed us to develop as a subcontractor, and so now work directly with Camden Council,” says Barker.

A key part of Illustrious Homes’ growth story is the business it now does directly with the council. It was not necessarily an easy sell to begin with, but the company has reaped the rewards.

The company has won a number of ten-year contracts and five-year contracts working in Camden and the wider area.

Barker explains: “While there are multi-million pound contracts which are better suited to the larger contractors, Camden also has smaller projects – worth between £250,000 and £500,000 – which would not necessarily be a priority for the larger contractors. But for us, these projects are perfect.

“Having built up a relationship with the council and with the council leader Sarah Hayward, we were able to explain why these types of contracts are better suited to smaller contractors such as ourselves and why it makes sense for the council to work directly with us.”

The cost saving to Camden Council by contracting with a smaller business directly, says Barker, is usually around 20 per cent.

“It’s a cost saving for Camden Council and keeps Camden spending local, but we’ve benefited too. Working directly with Camden Council has improved our profit margins significantly. We’re looking at around 10 per cent more profit than otherwise.”

Illustrious Homes is on track for a forecasted £6m turnover in 2015-16, which represents a 500 per cent growth in turnover since 2010. The company has also created 32 full-time jobs and employed more than 700 temporary and contract staff from Camden and the surrounding areas.

“To win public sector business, you need to understand what it is that the council needs and wants. And what is it about your service that means you can meet those needs. How will you communicate that? You need to adopt their language and align yourself with them,” says Barker.

“We’ve built up a reputation to deliver really good-quality work under important budgetary and time constraints,” he concludes.

“If volumes continue how we expect them to, we will double our workforce and double our turnover this year. Everybody wins: it’s about making sure the right people win the right jobs for the right amount of money.”

 

The Government is opening up the public sector’s £187bn annual spend. The new Contracts Finder provides small and medium-sized enterprises with a single online public sector marketplace to find opportunities by price, location and sector. Businesses can register for free for contract alerts

Businesses can also get advice from buyers. Workshops to help small businesses write bids are advertised on Contracts Finder in the events section. 

Businesses can also find subcontracting opportunities and use the open data on Contracts Finder to create apps, expand services or create a new company.