Like many of the best ideas, Vincent Weldon’s decision to set up in business with his brother came about over lunch. Back in 1994, Jim was working as a refrigeration engineer, while Vincent was with a forklift company, when they got jobs close to each other.
“We ended up meeting for lunch a few times a week, and we started talking about something we should do together,” recalls Vincent.
Some six months later, Tech Refrigeration & Air Conditioning (Tech RAC) was born, funded with a loan from AIB and some personal savings, and engaged in the sales, installation, maintenance and service of refrigeration and air-conditioning systems.
Getting customers was a key focus, and the nascent company was lucky to acquire two quite large customers early on – St James’s Hospital and the original franchisees of McDonald’s restaurants in Ireland.
“It was a great start for us,” says Weldon, noting it helped the company in its recruitment efforts.
“Getting engineers was a major problem. If you’re a new company, without a track record behind you, you’re trying to get them to leave companies to get them to come and work for you. It’s was a leap of faith for them,” he recalls. And there were other challenges.
Learning curve "I don't think it really went along the lines of the plan we had initially. Every week brought something new upon us that we hadn't envisaged or thought about happening before. But it was all part of the learning curve – how you deal with that informs how you run your business from there on."
Within a year, however, Tech RAC had about 10 employees, working out of a Portacabin in Dublin Port, which it shared with another company. This low-cost approach meant it could save money by sharing resources, such as photocopy and fax machines.
Some 2½ years later, however, the business had evolved to the point where it made sense to move out to its own premises in Blanchardstown, west Dublin: “We had strong growth each year; we were growing turnover and margin and were able to attract better premium from our customers.”
Then, however, around 2006/2007, Weldon noted a change in the environment.
“At that stage, there were some warning signs. Our three biggest markets are construction, retail and hospitality, which were three of the worst-hit sectors in the recession. We were finding that getting money out of clients became a lot more difficult. We were dropping some customers we couldn’t get paid from, and others wanted to renegotiate terms.”
During the recession, Tech RAC saw many competitors go out of business, but the company managed to keep growing its turnover by “spreading the load a little wider”.
“Initially it was just refrigeration, but then we did air conditioning, then spread a bit wider again, going into catering equipment, hot grills/friers, dishwashing equipment,” says Weldon, noting they were able to pick up projects from companies that had gone to the wall.
While its margins took a hit, it kept going strong through the recession. Key to this was the conservative approach the company had adopted since its early days. Neither of the brothers, who together own all the business, took money out – instead they ploughed all profits back into the business,
And, apart from a term loan which it repaid early on, it didn’t have any borrowings.
With pressure on margins, however, the company did have to make some cuts. Rather than let staff go or cut wages, Tech RAC took a different approach, requiring staff to build up 40 hours of overtime credit before they would get paid for it, and cutting back on the travel allowances it offered.
Since then, the environment has improved. According to Weldon, the level of inquiries has trebled over the last 12-18 months. “You can take from that that people aren’t going to spend money engaging consultants unless they’re going to go ahead with the work,” he says.
Tech RAC is now the largest service, maintenance and installation provider in its sector in Ireland, employing 78 and counting the likes of Facebook, Paddy Power, McDonald’s restaurants and Google among its high-profile clients.
Last year it posted turnover of about €7 million, and Weldon expects this to be up by about 18-19 per cent when year-end figures to the end of last month are finalised.
“We’ll try and maintain that level of growth if we can. Growth of around 20 per cent is a nice target to aim for.”
Until now, the company hasn’t received any outside investment and both brothers own 50 per cent each of the company.
“In the past we had some inquiries, but we didn’t engage at the time. We’re still very actively involved in the business. If you enjoy what you’re doing, you don’t really consider it.”
Future plans However, as time goes on, this may be something they reassess. "We may bring on board some new directors to go into areas we wouldn't have specialised in before. But first and foremost we're going to keep doing what we're doing at the moment."
And how has the sibling relationship stood up since those early lunches? “You’re going to have times when you don’t see eye to eye, and times when when you do. But the healing after not seeing eye to eye is a lot quicker – with someone else it may be more difficult.”
