Page 81 from: May 2008
May 2008 081
Clearly profitable
Mike Nicholls joined the family business in
1973 after having taken a degree in chemical
technology and worked in the plastics indus-
try for some six years. Initially, his intention
had been to start up his own business in the
plastics industry and to work part-time in the
family concern. ‘But it soon made sense to
concentrate on the business that was already
established and was clearly profi table,’ he says.
Mike is the fi rst to acknowledge that the busi-
ness was in need of some tender loving care
when he turned up for his fi rst day some 34
years ago. At the Charlton facility, the vertical
baling press was housed in a small shed, the
yard was very open and therefore regularly
under water. Owing to the conditions, it was
impossible to use fork-lift trucks and so a very
old crane was employed to stack, load and
unload lorries. ‘So an operation that could have
been carried out using one fork-lift truck need-
ed three people using the crane,’ he explains.
‘Even starting the crane was a trial and, at times,
it needed a team of people to push the crane
from one side of the yard to the other.’
Total baling capacity was little more than 100
tonnes per week at that time but the business
was eminently profi table owing to low over-
heads and the high value of baled mixed
paper, a tonne of which equated ‘very nearly
to a labourer’s weekly wage’. That brief boom
period effectively fi nanced the company’s
move to its present site in 1978. The late 1980s
was also a lucrative period and enabled the
fi rm to purchase the site now devoted to con-
fi dential shredding.
Very competitive
The London area has a high concentration of
processors and so a large number of recovered
fi bre generators. ‘The market is therefore very
competitive and premises are also very expen-
sive,’ notes Mike, adding that these pressures
have led to the closure of a number of opera-
tions in London over recent years. Partly for
this reason, he believes family-owned recov-
ered paper fi rms are in danger of becoming ‘a
dying breed, especially in the larger cities’. He
also perceives the following threats: subsidised
local authority collections having an adverse
effect on commercial operations; some ele-
ments of health and safety legislation posing
‘unacceptable risks’ to owners; and in large cit-
ies in particular, fi nancial returns from the
property being more attractive than the poten-
tial income from running a business.
Mike also identifi es ‘succession problems’ as
one which many family fi rms will increasingly
struggle to surmount. ‘Children and grand-
children will be tempted by more attractive
alternatives,’ he believes.
Practical induction
Mike’s son Stuart joined the fi rm on a full-time
basis in 1989 although he had worked part-time
on Saturdays and during school holidays from
the age of 14. Clearly sharing his father’s sharp
sense of humour, he takes up the story thus:
‘I had no strong, overriding ambition to work in
another industry and so I joined the family
business – at fi rst with
a view to getting a
proper job eventually!’
In line with the
approach adopted by
most family business-
es, Stuart was expect-
ed to acquire an inti-
mate knowledge of all
the practical aspects of a recovered paper pro-
cessing enterprise. ‘My fi rst job was a mixture
of everything – from paper sorting through to
seeing new customers,’ he recalls.
Even when a younger person entering a family
business goes through an exhaustive ‘hands-
on’ induction process, he or she does not
always receive the credit deserved, according
to Stuart. There is ‘a generally-held view that
you are there by default rather than on merit’,
he says. ‘Any success is put down to the genera-
tion or generations that came before you, but
any failures are put down to yourself.’
Mike agrees with Stuart’s assessment. ‘The
second and third generation fi nd it diffi cult to
quantify the success they achieve and the son
is, to a degree, in the shadow of the father,
who is probably in the shadow of his own
father,’ he observes. At the same time, he
insists that Stuart was not slow in making a
positive impression on the business. ‘He rea-
lised pretty quickly that shredding, if done
properly, was a more sensible business for us,’
he explains, ‘because the ability to charge for
recovered paper collections was limited. His
decision to progress this side of the business,
probably at the expense of the traditional
recovered paper operations, has been instru-
mental in our overall success.’ Stuart agrees
that his biggest impact on the business has
been in ‘pushing the shredding side of the
business and in marketing that service’.
Mike goes on to praise Stuart’s ‘wider vision
and focused approach’ while acknowledging
that his son’s IT skills ‘have been very valuable
in achieving our goals’.
Controlling your own destiny
The main advantage of a family business is ‘con-
trol of your own destiny’, according to Mike.
‘But with that freedom comes responsibility.’
Both he and Stuart share a deep-seated
devotion to the business which can sometimes
lead to disagreements. ‘I think Stuart and
I fi nd it easy to debate possible changes in the
business – but we
don’t always fi nd it
easy to agree,’ says
Mike with typical
good humour. Stuart
chips in: ‘In terms of
decision-making, we
tend to have the same
philosophy and agree
on the main issues. When we come across
something on which we vehemently disagree,
we tend to stick to our guns and meet in the
middle after the dust has settled – neither of us
admitting that we have backed down!’
This passion for the business and the oppor-
tunity to work closely ‘with someone who you
can trust’ are identifi ed by Stuart as two of the
main strengths on which family fi rms can
call. As for planning for the day when his
father decides to leave the business, Stuart
says: ‘Retirement is something we have dis-
cussed, but without making any fi rm plans.
The chances are that I’ll retire before him!’
The chances are
that I’ll retire
before my father!’
Mike Nicholls: ‘I have great admi-
ration for Stuart’s ‘wider vision
and focused approach.’
Stuart Nicholls: ‘When we come
across something on which we
vehemently disagree, we tend to
stick to our guns and meet in the
middle.’
Nicholls & Pearce is extremely active both in the domestic and export recovered
fi bre markets, shipping it’s material as far afi eld as India, China and the Far East.
RI_027_Father&son-Nich&Pearce.indd 3 14-05-2008 13:54:21
