After a tough time convincing people of the concept, today the business is in rude health. Nick Martindale reports

Going from competitive windsurfing to running a call-answering service may seem an unlikely route in life, but Ed Reeves, founder of Moneypenny, has never been one for convention. Born in India and brought up in Sri Lanka, he attended college in the UK and shortly after that received funding to pursue a career as a competitive windsurfer.

"I pretty much packed a surfboard and spent the next however many years living the beach life, on the west coast of Australia," he says. "I got quite good but it wasn't particularly fruitful. I made enough money to survive, and that was about it." After returning to the UK, he set up a windsurfing business in Wales - at one point owning three shops - but sold this when the sport fell out of fashion.

A spell in London followed, freelancing for a sports marketing agency, before he decided to move to Cheshire with his wife. "I was scratching my head about what to do and thought as an interim measure I would set up a business that supplied councils with vehicle graphics," he says. "It had potential to be quite a good business but my heart wasn't in it."

It was running this firm, though, that would prompt him to start up Moneypenny, with his sister Rachel Clacher, in 2000. "I was away windsurfing and somebody called my office and said, ‘Can you reload the fax machine because it's ringing out?'" he recalls. "The person who answered the call at the other end, purporting to be in my office, turned around and said: ‘There's nothing I can do. I'm just the answering service.' The net result was I lost some business. I rang Rachel and asked her to load up the fax machine for me. When I came back we sat down and just thought that was bonkers, and there had to be a better way of doing it."

Reeves had previously had experience of working with a business partner on his windsurfing business and had always said he would not do that again. "But in the back of my mind, there was always an exception with Rachel," he says. "We'd always spoken across the dinner table of doing something together but never taken it seriously. One of the beauties of working with a sibling is that for your entire lives, as all siblings do, you've fallen out and made up. That's a relationship which accommodates each other's needs and wants which is far stronger than anything that you gain from a normal colleague."

They also decided to give their other brother Thomas a five per cent stake, and agreed he would have the casting vote in the event of them being unable to agree; something they never needed to do. For the past seven years, Rachel has focused on the WeMindTheGap charity, which helps people from disadvantaged backgrounds in the north-west and North Wales get the skills and confidence they need to change their lives.

The duo was determined Moneypenny would be different to anything else out there in the market. "At the time, there were around 350 answering services in the UK, and each of them was purporting to be a call centre and just processing the calls," says Reeves. "We wanted to make sure that each person felt individually accountable for how that call was handled. Effectively, they worked for the clients rather than for us. As a very simple example, in the fax machine case it would be a case of providing another phone number, so it would be very easy to resolve. We set about employing people based on attitude, because we felt that we could teach them the skills. That was our point of difference; employing switched-on individuals who were accountable for how they dealt with each call."

Early issues

Finance was an immediate concern. "I think we had about £15,000 which we pulled together from credit cards and a loan, which obviously wasn't enough to set up a business of scale," recalls Reeves. Funding the development of the software was a priority; he recalls finding an IT developer who agreed to be paid on a piecemeal basis over the process of a year. "We had to fund the development of that through cash generated from within the business in the very early days, which is nearly an impossible task.

"But fairly quickly we stumbled on a marketing formula, which meant that we were able to use direct mail and get a positive return on investment. I think we returned £9 for every £1 we spent. That meant, by outsourcing all the direct mail process and ensuring that we were on 60-day terms with our provider, that we were able to generate a lot of cash in the business right at the outset and that's how we funded the growth. That shaped the Moneypenny model going forward. Even to this day, it works on the same basis. It means that we can manage debts and profit-forecast accurately."

Securing premises was a difficulty. "Because we were still quite a small business, trying to convince some of the limited landlords in the local area that we were a good bet to lease buildings to under fair terms was quite a challenge," he says. "There's lots of office space here but quite a bit of demand for the larger ones. We ended up having to buy office space rather than lease it." It now employs over 1,000 people, out of its headquarters in Wrexham, and even boasts its own pub in the office.

Over time, the business has evolved, both in the type of clients it caters for and the range of services it offers. "We started off very much focused on small and micro-firms and by that I mean businesses with less than five employees," says Reeves. "Our initial sell was around giving companies the perception of being a much larger, stronger business. We've around 6,000 companies using us like that.

"But I felt very strongly that the service we were offering was equally appropriate for large businesses, and that we should be replacing switchboard operators because we could do it far better than they could do it in-house with far better technology, and we could also save them money at the same time. We started knocking on the doors of big businesses and it was extraordinary because there was no concept of the service. We had to go through this process of education and then selling. It was hard. It was like pulling teeth." After about five years, attitudes started to change, and Moneypenny launched its switchboard offering, which now accounts for the majority of its client base.

Website live chat has been another development, and here Moneypenny is making use of artificial intelligence with some requests. "If somebody is asking a question that is effectively a stock answer, such as what are your opening times, that would be automated and the answer would just come up straight away," he explains. "If somebody was to ask something more complex, or non-repeatable, that would then flip over to a human."

Staff have responded well to this as it can help support them, he says, adding that it's required him to spell out the benefits so they understand it's not a threat to their own roles. "We have had absolute buy-in from the team into the benefits of AI, and they had a large voice in shaping the way that service works," he says.

Confronting Covid

Today, Moneypenny turns over around £60 million a year, and handles 20 million interactions from 21,000 businesses. It also has a presence in the US, having acquired VoiceNation in 2020, but is experiencing similar issues to those it encountered a few years ago in the UK. "Again, we came up against this challenge with bigger companies of how we educate and then sell," he says.

"We've not really cracked that side of it. But over the last year in particular that has grown very nicely with the pandemic. It looks now as if we're building up a lot of momentum out there and the future will be quite bright." He believes in 24 months' time that the US will account for around half of Moneypenny's turnover.

After an initial worrying fall in business in March 2020, Moneypenny has benefited from companies not being able to work from offices as a result of the pandemic, helping to set up clients so they can work from home. "We were able to distribute calls and contacts just as if the offices were fully manned," he says. "But we had our own challenges in terms of facilitating homeworking for our own staff. Our IT team had two weeks to turn a business that was totally office-based into one that was entirely home-based and adapt the software and everything else to facilitate that. They managed to pull it off, and the net result was that we managed to continue to deliver our service without any disruption."

By the end of 2020, the firm was seeing record growth with more customers using its services than before, although Reeves has also identified a greater willingness for people to give out their own mobile phone numbers for business purposes. "We win on one side and we lose on the other," he says. "We're winning overall, and the propensity for businesses to adopt live chat on their websites has increased massively too." Moneypenny itself will retain at least some form of homeworking in the future, he adds.

Passing on experience

Away from the day job, Reeves is building up a portfolio of business investments himself, including in the back-end data analysis firm He currently has stakes in six firms, with the aim of increasing this to 10 over the next year, investing anywhere from £250,000 to £3 million.

Despite this, he believes start-ups need to find their own feet before seeking external investment. "It's almost like there's an art to self-funding and organic bootstrap businesses which seems to be dropping away," he says. "It astonishes me. People need to remember that if they own a business entirely on their own then that's all of their benefits. They have no partner, and they gain that flexibility and that speed of decision-making. If they only own five per cent and the rest is owned by investors, that's a completely different kettle of fish. Maybe you limit your growth, but then what limited growth you do have your own yourself. It's 100 per cent of a pie or five per cent of a bigger pie, which needs to be 20 times bigger in order to make it work. I know which one I'd rather have."

One lesson he's learnt along the way is the importance of recruiting people on attitude rather than skills. "No matter what skills people have, unless they've got the right attitude they're not going to fit in," he says. "That's the same whether it's a new PA through to a new chief executive. That's the mantra which will carry forward in the years ahead for Moneypenny."

But he also believes a degree of naivety is no bad thing when starting up. "Rachel and I both said many times that if we'd realised how big a challenge setting up Moneypenny would be, we probably wouldn't have gone for it," he says. "That ability to learn to grow on a personal level, while the business is developing, is a great asset. A little bit of ignorance helps, as long as you are going to put in the legwork to support it."

Reeves, now 53, admits he's something of a workaholic, but still spends time windsurfing, surfing and sailing when he can, as well as being kept busy by his two children. "I'm also a budding helicopter pilot," he says. "I'm in the middle of doing my private pilot's licence, which is something I wish I'd done 30 years ago. Suddenly you feel quite old when you've got this whippersnapper instructor next to you and you're following rather than leading, but it's really exciting." Just like the journey he's been on over the past 20 years.