Business · interviews · Sunday Times

How We Made It: Michael and Steven Lewis: Founders of The Underfloor Heating Store

WHEN their electrical contracting business went bust in the recession, brothers Michael and Steven Lewis had to rethink rapidly. “We went from six months of orders to nothing, which was terrifying,” said Michael. “We needed to do something new with our skills, and quickly, or our mortgages wouldn’t get paid.”

Part of their work had been installing underfloor heating systems. They found that suppliers knew little about the products: “You’d go to an electrical wholesaler and get that sharp intake of breath.”

In 2008, sensing an opportunity to get back in business, they founded the Underfloor Heating Store offering free next-day delivery of products such as heating mats, thermostats and insulation. In 2013 the company had sales of £7.7m and is expecting £9.5m this year.

Its rapid growth earned the Underfloor Heating Store a place in The Sunday Times Fast Track 100 league table of Britain’s fastest-growing private businesses.

“We’ve had to learn all the pitfalls of running a business, and how to get on as brothers and partners,” said Steven. “It has been testing at times.”

The company, based in Basildon, Essex, employs 25. Michael put a £50,000 personal loan from Lloyds TSB into the business, which began trading in 2009 with a further £100,000 start-up loan from Barclays. “That second loan was fantastic,” said Michael. “It enabled us to buy more stock, invest in computers and push the website forward.”

Today, about 80% of the company’s materials are sourced from British suppliers. As well as water and electric underfloor heating systems, the company sells wet room products and mirror demisters.

They no longer install the kit themselves. “It was a hassle getting good installers; they would let us down by not turning up or walking across someone’s cream carpet in muddy boots.”

They recommend installers on their website, where customers can find videos and instruction manuals on self-installation. There is also an advice line.

“We don’t employ sales people,” said Steven. “We have qualified plumbers and electricians on the phone who know what they are talking about and give the customer a confidence boost.”

Appearances on the BBC series DIY SOS and Channel 4’s The Home Show boosted sales. Steven is working on their first TV ad, due to air in September. “Michael is more academic,” he said. “I get to do the fun stuff, which is fine for me.”

The brothers were born and raised on Canvey Island in Essex and attended Furtherwick Park School. Their father was a railway engineer, and now owns a pub in Rainham with their mother. “We both left school not knowing what we wanted to be,” said Michael, who started working at Lloyd’s of London in 1990, aged 16.

He quit after four months and went to Israel to work on a melon farm, returning six months later to join his brother, who was pulling pints at their parents’ pub.

Michael then studied at South Essex College for higher national certificates and City & Guilds qualifications in computing electronics, design and programming. Steven took on trade apprenticeships in plastering and electrics.

“I would study everything if I could, whereas Steve is quite practical, so we work well together,” said Michael, who graduated with an Open University degree last year. “We have been quite lucky.”

In 2000 they had started an electrical contracting and property development business in Brentwood, Essex. It grew steadily until the housing crash in 2007. “We lost everything, all the money we had made,” said Michael. “We had no money, no work, big mortgages and young children. At one point my wife was selling my DVD collection to pay the bills.”

Moving quickly, the pair started the Underfloor Heating Store from Michael’s bedroom in Billericay. “We had to build a small cabin in the garden when the stock came in as my wife was getting tired of us using the house as a storage facility.”

They bought their first warehouse a year later. Today they have three, and a showroom and trade counter in Basildon. They have linked up with Samsung to become the biggest distributor of the manufacturer’s heat pumps and solar panels.

Steven and Michael, who each own half the business, are looking to export more, with Germany top of the list. Their website is available in nine languages.

The Underfloor Heating Store donates 10p from each order to Little Havens children’s hospice in Essex. Its contribution has now reached £30,000. “We realised we needed to give something back.”

Michael, 40, lives in Billericay with his wife, Paula, and their children Daniel, 8, and Ethan, 6. His advice to aspiring entrepreneurs is: “Never give up. Even when we doubted and everyone said we’d fail we carried on working.”

Steven, 36, lives in Leigh-on-Sea with his fiancée, Louise, and their boys George, 9, Henry, 6, and Hugo, 1. He adds: “You have to know your product and what you’re talking about.”

Link to article in the Sunday Times

PDF – Michael and Steven Lewis of The Underfloor Heating Store

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