follow us on twitter @EliteFranchise find us on facebook connect with us on linkedin 

Franchise Opportunities           

Kate Lester’s franchise Diamond Logistics is a cut above

Written by Hannah Prevett, Emilie Sandy on Monday, 06 October 2014. Posted in Interviews

Logistics has not typically been considered a female-friendly industry. But Kate Lester says her feminine traits have helped her create a business built on teamwork, ethics and respect

Kate Lester’s franchise Diamond Logistics is a cut above

One afternoon, Kate Lester, founder of Diamond Logistics was working in her Guildford office when there was an unexpected interruption. “I was wearing a pair of bike leathers, bent over a filing cabinet and someone walked in, spanked my arse and asked, ‘Where’s the boss?’ I replied, ‘You just smacked her arse, so F-off,’” says Lester. 

Sexism is rife in the logistics business, she explains. But that doesn’t mean that women should be afraid to be women. “A bit of elegance, respect and decorum can go a long way. It’s very important for us to retain our differences and bring an entirely different perspective on things. I’ve had hairy-arsed lorry drivers trying to scream at me at the tops of their voices, and when I touch their arm and say, ‘Listen, would you talk to your wife or daughter in this tone or manner?’, they’ve said, ‘No’, and I’ve said, ‘I suggest you don’t do it in this depot either.’”

It seems particularly ironic that Lester began a business in a male-dominated industry, considering her father chose to move the family to the UK from Perth, western Australia, because “he thought the misogyny of Perth wasn’t the best place to bring up three ambitious daughters”. Lester’s parents had moved Down Under in the 1960s and after 25 years returned to Blighty with Lester, then aged 15, and her two sisters.

The transition was difficult. “It was a horrible time to come over here,” she confides. “I was taken out of school at a time that meant I was too late to join GCSEs and too early to join A-levels. I found it difficult to make friends; we moved to the southeast of England, which is not really known for its sociability.”

After taking her A-levels in economics, English literature and history, she took a gap year in which she says she became “a bit addicted to the green stuff”. The lure of money meant she never enrolled in the course she’d been accepted to study at the University of Sussex. “I had a couple of jobs working for different organisations where I probably had ideas well above my station,” says Lester. “I was really working on the team effort and trying to help bring everyone forward together but people would steal your ideas or you wouldn’t get promoted because people thought you were just an 18-year-old. So my ambition had always been to do something of my own but while I was finding my way I did everything from cleaning to working in a pub.”

She had also been inspired by her parents, who had both demonstrated entrepreneurial flair. Her mother had owned a boutique in Perth, though joined the NHS when the family relocated to England, and her father had always owned his own business. “He was frequently locked in his study until 10 o’clock at night,” says Lester. “I followed my father’s footsteps. I’ve got a similar temperament to him; I don’t mind the long working hours and I’ve got quite a thick skin.”

At 20, the opportunity arose to make her own mark. “I was working for a courier company that wasn’t doing very well and just as they went bust I approached their major client and said, ‘If I take this on and a couple of couriers, will you still work with me?’ They said yes – that was in March 1992, and the rest, as they say, is history.”

Only it wasn’t quite as easy as Lester makes it sound. When Diamond Logistics was in its formative stages, she had two very small children on her hands. “I conceived Chloe and the business in the same week,” she jokes. Chloe, now 21, is studying geology at Imperial College London, while younger brother Oscar, 19, will shortly begin a degree in art and art history at Plymouth University. 

“Self-employment is a marvellous machine for women to work and have children – and balance both of them,” Lester enthuses. “I don’t know how women who have PAYE jobs cope with having children.” Running her own business allowed Lester to focus on raising her children while also earning a good living, which was crucial as she was the only breadwinner, having been divorced three times. 

Starting the business was tough, says Lester. “Rookie error number one: I had no money. I literally had to start the business and live off it straight away. My earnings in the first year were £5,000 and even in 1992 that was a pauper’s salary.” While the business ticked along under the watchful eye of her management team, Lester set up a lucrative consultancy where she’d offer advice to other entrepreneurs setting up their businesses or help to turn failing companies around. 

The business continued to grow organically while Lester raised her kids and undertook consultancy contracts. At the beginning of 2011, she was doing some work for a company in Surrey. “I had taken them from £5m to £8.5m, brought them back into profit and totally transformed their performance statistics,” she explains. “I had been offered a share deal by the proprietor and therefore worked over and above the odds for a six-month period. But by the time it got to the May or June, I just thought, ‘Oh my God, he’s going to shaft me.’ And he did. He bailed out of the share deal.”

The upside was that it provoked something of an epiphany. “I just thought, ‘When are you going to stop doing this for other people, Kate?’ All of this going into other people’s businesses had meant I’d really taken my eye of the ball at Diamond. When I took a long, hard look at what I’d achieved at Diamond, it was nowhere near to satisfying my personal ambition and it was nowhere near what I was capable of. I’d just got caught up in the whole thing of earning lots of money and keeping my children in the manner to which they’d become accustomed,” she says. 

Reading the book Rich Dad Poor Dad by Robert Kiyosaki in June 2011 forced a shift in Lester’s mindset: “I started thinking about turning the business into a valued asset [the creating, owning and selling of valued assets and not merely being an employee is one of the central tenets of Kiyosaki’s book]. In 18 or 19 years of working, I had a business that was turning over bugger all; it wasn’t worth that much – especially given all of the effort I’d put into it over the years.”

First of all, this meant waving goodbye to the consultancy money. “It was difficult giving up that cash. I had to say goodbye to six figures a year and that was painful. But if I didn’t, I was never going to have the kind of asset that Diamond could be.” She also poured in her own cash reserves. “Divorce number three was really bad: he was going to take me to the cleaners anyway so I thought, ‘Fuck it, I’ll put all of my money into the business.’”

So Lester set about turning Diamond Logistics into a valued asset, and franchising was going to be the means by which she did it. The first pilots were in Bognor  Regis and Southampton. “That formed the avatar of what our franchises would look like in the future. It’s important that people have a lot more money than we had in the beginning – which was nothing – to start their business because we want them to spend money on sales and marketing, we want them to follow a formula.”

After all, Lester has grand designs for the franchise. “There’s no point establishing a load of little, local courier companies. We’re not doing this to flog franchises; we’re doing this to build the best courier network in the UK.” This means making sure every single franchisee is the right one, she adds. “Everyone we choose has to be someone we’re prepared to do business with for a long-term period. We’re building a business with them in a real partnership sense: they share our ethics, mission and values. That’s very much based on our shared success principle. You cut through my arm and it will have shared success through the centre, like a stick of rock,” she states.

Shared success is all about partnerships and collaboration – a novel idea in an industry that’s known for “big companies milking the masses”. The quality in the work comes from the quality of the team, says Lester. “Franchising was a way of capitalising on that quality because we didn’t have access to a lot of money. I did it without any help from the bank at all. I had a terrible bank at the time and they were very responsible for holding us back between 2001 and 2008.” These days, Diamond is a very happy Metro Bank customer. “When I came across Metro, I couldn’t believe that a) they were normal people and b) they didn’t seem like wankers. You know what banks are like,” she says. 

Lester admits that her foray into franchising has been a steep learning curve. “People ask why, at 20, I started a courier company and I say it was naivety and belief. This whole franchising thing was naivety and belief as well,” she says. Still, it certainly hasn’t held her back. “We’re in the process of securing bfa accreditation and we’re going to reach critical mass next year.” She’s also tweaked and refined the necessary literature for new franchisees. “My first franchise agreement was probably half a centimetre thick and the legal document was written on the back of an A4 piece of paper. My new franchise bible weighs half a kilo and the legal document has a hefty thud as it lands on a desk.”

Lester may have been a franchising newbie when Diamond delved into that world but there’s nothing wrong with learning on the job, she says. “If we’d waited until we’d perfected the art of franchising or waited until we’d perfected the art of replicating our business, we would have launched too late.”

The core business has evolved too. Once a same-day courier specialist, Diamond now offers overnight and international deliveries as well as warehousing services. “That gives us the stability of a three-legged stool,” says Lester. “We’re diversifying into related areas which are very complementary and it means we can be a one-stop logistics solution.”

Diamond’s client base is hugely varied: from kitchen-table start-ups that need a total logistics solution to blue-chips such as Rolls Royce, John Lewis and Maclaren, which may just take advantage of one or two of the core services. At the moment, the company is carrying out between 5,500 and 6,000 deliveries a week but this is escalating rapidly alongside the growth of the firm’s franchise network. “Our original goal was to achieve £40m turnover but we look like we’ll probably exceed that now,” says Lester. 

International expansion could well be on the cards too, with conversations taking place between Diamond Logistics and people interested in franchising opportunities in America and Ireland. Happily, Lester is a keen traveller, though she can more often be found heading east for her holidays. “I love travelling, particularly to southeast Asia,” she says. 

Lester’s experiences in countries such as Cambodia, where people have experienced appalling hardships, have informed the way she thinks and acts – both at work and at home. “I adore Cambodia. It’s one of those places where you feel so grateful for the opportunities over here. The people were left with nothing and yet they retain enormous positivity, happiness and hope. I think we learn such great lessons from visiting that part of the world. It’s a real humbler.” 

About the Author

Hannah Prevett

Hannah Prevett

Prevett likes to think she's something of an expert when it comes to small business. Having cut her teeth writing about tech, she latterly moved on to such illustrious titles as Growing Business, Management Today and the Sunday Times to indulge her enthusiasm for entrepreneurship: from P&Ls to private equity and all that's in between, you can't keep this girl away from the heady world of start-ups. 

Back in the day when she had spare time, she would spend it networking, horse riding, drafting and re-drafting ideas for novels, and playing auntie to her niece and three god-children. Those were the days...

Emilie Sandy

Emilie Sandy

Aside from dashing between the Cotswolds and London to shoot business types for magazines such as EF and TV stars for the Beeb, Sandy is also a visiting lecturer at a college in Stroud – not to mention a proud mother to son Freddie and daughter Fjola. She has photographed our cover stars since our very first edition. You know what they say – if it ain’t broke...

 

 

Strategic Media Partners