You need courage if you are serious about growing your business
TeamSport are an indoor go karting company with tracks nationwide. Chief Executive, Dominic Gaynor discusses his approach to business and how TeamSport evolved as the business grew.
“I think business leaders need to be courageous if they are serious about wanting to grow their companies,” says the Chief Executive of TeamSport. “If they don’t map out the journey,” he suggests, “then they won’t have the vehicle in place to get anywhere.
“In business, if you are going to have any regrets, then they should be about something you didn’t do, rather than doing something which didn’t go the way you thought it would. You’ve got to have the courage of your convictions and dare to challenge yourself.”
In the beginning
Virtually his whole career has been with what is now the country’s prime indoor go-karting company. It all started when he decided to go to Australia after university. To help fund the passage, he took a job with what was then called Go Karting For Fun, partly because it was close to his parents’ house where he was staying. The work involved sales, something he was comfortable with but which – he thought – wouldn’t result in him wanting to stay long-term.
“My natural inquisitiveness meant that I began to put my nose into other areas,” recalls Gaynor. “Such as asking why were we increasing our spend in Yellow Pages when we hadn’t invested enough in a website. I stayed for a year but really got on well with Paul Wrightman, the owner, and we stayed in email contact. When I said I was travelling back to the UK in 2004, he suggested I came back to the company on an ad hoc basis if I preferred, while I decided what I wanted to do.”
Cannily, Wrightman gave the ambitious Gaynor plenty of rope. “I was allowed to make a lot of changes,” explains Gaynor, “including re-branding the company as TeamSport. We were looking for corporate customers, and I felt the previous name gave the perception that it was an activity for kids.”
“Intuition,” he suggests, “means your brain is able to take a shortcut to get to the answers quicker. Usually it’s influenced by experience – I didn’t have much at the time, but I was willing to try things, and I had a vision.
Growing the business
“We were very sales and marketing focused compared to others in our very fragmented market. And in the four or five years up to 2012 we managed to increase the number of sites from three to nine, just by bootstrapping it really.
“Paul focused on new site openings, he loved organising that, and I was ‘in’ rather than ‘on’ the business. It was incredibly exciting working for someone who gave me the opportunity to do things. Effectively it was on-the-job business schooling, but with no risk to me. Paul then suggested I should consider studying for an MBA. It’s something I wanted to do because although my story was compelling, it came without any qualifications to underpin it.”
Gaynor completed a four-year part-time course at Henley Business School, paid for by TeamSport, which of course for the company meant he was locked in until graduation. The course came with the added benefit of having all the projects related to the TeamSport business. His dissertation was on customer perceptions of electric karts. Four of the sites are now all electric.
Gaynor though, extended his academic brief to cover the open road. “Range is a big problem with electric vehicles, what needs to happen is for manufacturers to agree on a single battery technology across all vehicles. Then, instead of a driver having to wait to recharge their vehicle, a robot would simply remove the battery and drop in a new one. It would take less time than filling up the tank with fossil fuel.”
As sales and operations director of TeamSport, Gaynor had a small shareholding, but, he says, “even without it I would have viewed the company as my own business, and that’s the feeling I want my general managers to have about the company.”
Taking over the driving seat
Then Wrightman got an approach, but the offer would have meant Gaynor relinquishing his stake. “Paul said to me, if I could get the backing, he would prefer to sell to me,” he recalls.
It took some time to get over the finishing line. Gaynor started talking to the banks and private equity late 2011, but completed the deal predominantly with a private investor (family office) and bank debt in 2013. “At the time, private equity didn’t really take our sector seriously,” he recalls. “They saw us a nice, fun business, but that was it.”
A secondary buyout in November 2017, with Duke Street, demonstrated a fresh appraisal had emerged over the intervening years. By that time TeamSport had grown to twenty-eight indoor venues. Each fit-out of a site requires some £1million of investment, so capital is necessary for Gaynor to be able to add to the infrastructure and people resource in advance of the business having to call on it to function.
Fresh thinking had also resulted in clear differentiation between TeamSport and other players, such as having multi-level tracks rather than a flat circuit. Investment was made in providing hospitality facilities, such as a bar overlooking the track, and changing facilities akin to those at a private gym. “Think about the trend in cinemas now in terms of quality of facilities,” says Gaynor. “That’s what we were implementing. We realised customers were willing to pay for a premium experience, so that’s what we focused on. At some point, I suppose, when we had opened our seventh location, I could see this was a model that would work for the future. I recognised the opportunity to build a national brand.”
Management structure as the company evolved
It used to be that each site general manager would report to Gaynor. But as the company grew he made the decision to promote a couple of them to each look after a particular region, in addition to being responsible still for their own venues. Then as the company grew some more, four regional directors were appointed who report to an ops director, who in turn reports to Gaynor. He sees the latter as a key appointment for the development of TeamSport. “Steve [Evans] ran the first ever Virgin Active health club and grew the operation to 120 sites,” he explains. “When we were opening one new site a year, which is hardly disruptive, it was a different company in terms of size. Now we have 750 staff, so it’s just no longer possible for me to know and to manage everyone.”
What’s interesting is that he doesn’t miss being away from the track per se, because his passion has always been the business rather than karting as a pursuit. “What I really miss though is seeing people come off the track with a wide grin on their faces,” he admits. “In business terms, the challenge for me is to be able to be close enough to know what is happening at the customer interface, which is why I have made sure that the managers we employ can see the business through my eyes.”
He still fits in as many sites visits as the calendar permits. “I firmly believe people at the venues have the answers to most of any problems the business might have,” he asserts. “The leader’s job is to ask the right questions to pull out the necessary information.”
“To communicate, we used to email out a PDF every month to all of the staff,” he explains. “But I realised that’s not talking to the business but talking at the business. So we launched a video newsletter, but found that less than half of the staff were viewing it. Their age profile means they’ll only check their email a couple of times a week, if that, because they prefer to use other platforms. So now we text them the link to get them to view the video.”
On a macro level, the company has appointed a culture and people director. “A fun product needs engaged people to deliver it,” asserts Gaynor. “You can’t simply tick that box when the business has grown with sites in far-flung parts of the country.”
Not surprisingly, the company has a set of values, which include putting the customer on pole, being one crew, stand up and stand out, have a big emphasis on small details. “Those values were distilled from workshops which involved our staff,” explains Gaynor, “and they are core to the business. Our employee of the month award is measured against them; staff appraisals have to include examples to show how each person has been working to those values. But if a leadership team simply says here are the values, then we’re talking about imposed behaviours; the staff aren’t living and breathing them.
“If you want to grow a business effectively, you have to invest in the infrastructure and give people responsibility. Good people don’t want someone standing over them, and in any case I wouldn’t have the time to run every element of a business of this size. You’ve got to learn to accept and embrace that or you’ll throttle the business. The biggest challenge for a fast-growing business is to give its people the time and space to grow.”
The general managers aren’t responsible though for a full P&L because, says Gaynor, because elements of it, such as negotiating and then paying the rent, are out of their control. Instead the company rewards them on the success of what they can influence, such as keeping employee churn below an agreed number.
Competition isn’t restricted to the track. TeamSport introduced live reporting so that all of the general managers and the regional directors can see the performance of each site in real time, and the data, which relates to the company’s KPIs, is also presented in league table form.
“It doesn’t matter if a location is bottom of the table as long as they are achieving what is expected; that’s fine,” explains Gaynor. “This is meant to be fun as well as motivational, not something to beat people up with.”
And fun is a reason why consumers are spending more money on experiences rather than retail, Gaynor believes. “It’s fuelled by them owning enough stuff, a desire to be seen on social media, and not wanting to miss out.
Looking to the future
“We have a clear goal in terms of the sites we want to open, and we have bankers who understand that, so we can set ourselves up to take advantage of the right opportunities when they come up. You need bandwidth to be able to involve key people in acquisition work or your existing business can be disrupted. Having the resource in place in advance provides more certainty that a business can deliver its strategy. The one thing which will stifle growth is uncertainty in the process.”
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