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Q&A with Mike Beese, Director of DecTek

We were recently fortunate enough to speak with Mike Beese, Director of DecTek, a multi-award-winning printer and manufacturer of advertising, marketing and promotional products.

In this wide-ranging Q&A, Anton Nebbe, head of PR, asks Mike for his views on everything from Covid and Brexit to how his father’s advice helped shape his approach to business, and what it’s like working with Close Brothers Asset Finance.

Tell us a bit about yourself…

I’m a proud Welshman, currently based in Pontypridd (pronounced pon-tuh-preeth). 

In terms of my professional background, my father was heavily involved in engineering and encouraged me to follow a similar path, so I was placed onto an engineering apprenticeship I ended up doing very well at.

He formed a trophy-making company and went from retail into trade and then into manufacturing. I was merged me into the company and managed to revolutionise the way they produced the sports centres for the medals, allowing us to supply on demand. I also started to bring on board digital technologies, which helped the company grow significantly.

I wanted to expand into other areas, but my father wasn’t as enthusiastic as I was. Despite this, we continued to work together for 12 years before I felt I needed to chase my own path.

For me, it was the right time because I’d always been very interested in art and wanted to incorporate it into my work. At the time we were on the cusp of the computer technology revolution, with huge demand for badging for computers, so I seized the opportunity.

I soon had another employee – we grew very quickly before getting additional workspace and branching out into point-of-sale and labelling, among others.

Throughout, I relied on digital response and was competing against people who had flexo and screen printing, but my strategy in the market was low volume, high frequency, high margin, which allowed us to grow rapidly.

Today, the company has grown to 30 staff and I have around 7,000 trade clients who we respond to very quickly because we have multiple modular production lines that follow a path and make a component with no tooling involved.

There are significant market opportunities available – for example, we get involved with gaming companies; we produce plastics; laser cut metals, wood and even fabrics. We can supply (on demand) anything from 100 to 1 million units, but on average, we supply 1.5 million units every month.

How have you coped during the pandemic?

The recent pandemic had a dramatic impact on DecTek’s turnover but it gave us time to develop and seek new market opportunities,

With this in mind, DecTek had sourced additional digital technology and manufacturing processes to support its traditional range of products and services.

From the onset, Close Brothers Asset Finance supported our application and fostered our funding application through to its eventual completion and equipment installations.

Dectek has now secured its future growth ambitions and looks forward to an unprecedented growth curve out of the current pandemic.

Close Brothers Asset Finance has been an integral part of our growth strategy and has given us the confidence to grow within the challenging economic lockdowns.

What are you thoughts on the ‘digital revolution’?

We’re in the midst of one and Covid has aided this. Take video calls, for example; in the past, if I had to deal with something, I’d jump in the car and it was a day out, but now, we can do things remotely and we’ve become more productive.

We’re now conducting machine demonstrations via video conference and I’m now far more ‘global’.

Supply and demand has also grown because of the likes of Amazon and eBay – people want things tomorrow and they want them simplistically.

We’ve identified a void we can fill and I’ve formed a separate company focused on packaging, and I’m very, very excited by that.

What’s the impact of the pandemic been on your business, the print and packaging sector, and innovation?

It’s spurred innovation, most definitely. At the start, in common with almost all other businesses, the pandemic had a huge financial impact on the company – we went from being an expanding company to having zero sales, which initially caused us great concern.

We had to find a way to keep the business running for 3 months because we had operational commitments and so on. Once we got through that, we took the opportunity to conduct a strategic review of the business and to look at where we were going and where we wanted to be.

This resulted in us refining our production systems, workflow processes, productivity levels, and how we engaged with clients. From that, we started supplying Covid-related material, signage, face masks and floor graphics.

That then led to a surprisingly seamless technology shift and we realised there must be great potential for other products out there, including packaging.

We put out a number of enquiries and questionnaires to clients to see if they required packaging and there was a huge response. Based on that feedback, we acquired 10,000 square foot of manufacturing space and £400k of new equipment with another £500k to follow.

We’ve also engaged in an apprenticeship programme to start rejuvenating the youth, along with a digital academy we’re running in conjunction with two colleges.

Having had the time to look at the potential sales from packaging and the possible margins, and having a strategy of low volume, high frequency, high margin and quick responses. From that on the back of which they can support other clients.

The pandemic has made us become highly collaborative with our client base and with our supply partners, including the likes of Canon, HP and others, all of who are hungry for new ideas and products – we are helping them better understand what their equipment can support, and other industries they can move into.

Speaking of apprentices, do you feel the role and opportunities for apprentices has diminished? 

They had diminished, yes, but post-Covid there’s going to be a huge requirement for new people in our sector.

In the past, apprentices would normally make up about 5% of our employee base, but we’re aiming to scale that up significantly to around 35% apprentices, which is staggering. We’ll have a training programme to support this and we’ve also received the financial support to help us train the apprentices and ease out of Covid.

What should companies be doing now?

I believe that post-Covid, many companies aren’t going to be able to cope with demand – it’s going to be a very different world in so many ways. We’re all going to have to be ready and in the starting blocks, whether we like it or not, and anyone who isn’t, is going to have serious problems. I really believe that.

Even now while we’re still living under restrictions, we need to start planning.

What’s an example of changes you’ve made?

We’ve partnered with some large e-commerce companies and become a fulfilment company for them because we’ve maintained our services and we’ve gained relationships from that.

Just recently, we secured an annual £500k contract as a direct result of Covid and partly because of Brexit.

We’ve generated a lot of goodwill and developed many relationships during the pandemic.

What’s the impact of Brexit been like?

Two years ago it was big because of price hikes, but it was the same for everyone. I’ve been advised some components and materials will increase in price dramatically, but only temporarily, which is why I won’t be getting into any kind of pricing war.

I’m personally looking to work more closely with my competitors and to look at our cumulative strengths so we can support each other in the trade, which I haven’t done before.

I previously only did 15% or so of business in Europe but there are opportunities in the pipeline that may dramatically change that to over 40%.

My point is, there are reasons to be positive – business at home will increase and we will still have our chances in Europe.

All that being said, it’s really a wait and see, even now.

What’s next for the sector?

The pandemic has given people the time to think about their lives, and many have used the opportunity to form their own businesses. These people will be needing support – financial and otherwise – because it’s a very different kettle of fish running your own business compared to managing someone else’s.

Companies will also become more open and share knowledge more readily.

From an order perspective, the volumes won’t be there anymore – it’s about smaller and more regular.

Contracts will also need to be renegotiated for all sorts of reasons, and response times and understanding a client’s needs will become a much sharper focus – better customer service will be the result.

Trading will become more UK-sourced because of the issues of importing from elsewhere in the world.

What’s your business strategy like?

I thrive on disruption. My father said to me when I started my business: ‘don’t wake up in the morning smiling, wake up, stick your chin out and if no-one takes a swing it’s been a good day, but expect it!’.

And he was right because disruption causes greater market opportunities and if you can cause it, you stand to benefit.

The days of resting on your laurels are long gone. I took on a client in London and bough his business for a good price and managed to claw that back within six weeks- once Covid is out of the way, they’re going to be bringing in significant revenue.

The cash that business generates will allow me to look for – and employ – those with better skillsets than me so I’m no longer spinning 10 plates.

I even stopped all online advertising, which saved me enough money to employ a Commercial Manager and invest in trade organisations and magazines, which have been phenomenal. This is bringing in responses we almost can’t cope with!

What’s are you looking forward to?

We’re looking to become the first UK company to manufacture promotional products, package them and supply the fulfilment and distribution.

We can buy in product, print on it and then with the same machinery we can make the packaging.

I’m really looking forward to bringing a team in – this company’s become too big for me to run on my own. To do this, I will need to spend on people, training, equipment and facility. It’s a good problem to have!

The opportunity is limited by me – since Covid I’ve employed three of my boys, all of who’ve had apprenticeships and they’re thriving and absolutely loving it.

I now have a continuity plan – in a few years’ time they’re going to be able to grow the business far better than I can. I’m very lucky they have different interests and skills.

Have you been attending conferences?

Yes, my Commercial Manager has been, probably about one a week. These have been very useful to connect and network, even virtually, understanding what’s happening out in the market – who’s innovating and who’s retiring, and so on.

Why do you deal with Close Brothers Asset Finance?

Like yourselves, mine is a personality-driven business. The rapport I have with my Relationship Manager is quite staggering – he gives me great advice but also responds in an instant, which is what I need.

I feel ‘guilty’ about asking for finance, which I think many business owners will understand, but with Close Brothers, the question is always, ‘what do you want next’ – you actively want to help, but not in  way that’s pushy.

How it works with us, if a client reacts positively to a sample, we have to react very quickly.

Firstly, when I make the enquiry to Close Brothers Asset Finance, it’s always a very positive reaction and you give the impression of being appreciative, alleviating my guilt for asking, which is the first hurdle overcome.

Secondly, you get a very quick response with everything generally concluded within a week or 10 days. 

For example, in March 2020 we needed £50k for a Canon printer, which is a big investment – and had our second one within six weeks. Then to support that, we had an additional cutting bed and I’ve just ordered the fourth one.

Regardless of my financial requirements, I know Close Brothers Asset Finance will assist in some way – including support and advice, for example, which equipment to lease and which to go down the Hire Purchase route. You have become part of our internal team even though you’re external.

I had a relationship with two providers but because of the way you do business and personal touch, my relationship with Close Brothers Asset Finance has flourished.