How Jonathan Hey made a fortune flipping homes
By
James McKeigue Jan 11, 2013
Print this article
Westbury Garden Room's Jonathan Hey
In the early 1980s, Jonathan Hey knew an easy way to make money – “buy a house, do it up and sell it”. The property market was in good health, and the process was made all the more profitable because the government of the time was handing out grants to homeowners – to build indoor toilets.
In 1981 a lot of houses still just had outside toilets. The only trouble was that Hey, then 22, didn’t have the money to buy a house. So he asked his employer, a farmer, to help him save.
“I knew I would spend it all if I had it, so I got him to give me half in cash and put the rest into a bank account.” Eventually, he saved enough to buy a property in Hertfordshire with a friend, who was an electrician. The pair did up the house together – “we had to get a plumber in to help with the toilet but... we were able to do a lot ourselves” – sold for a profit, and moved on to the next project. It was the start of a string of successful deals.
But by the late 1980s, Hey was tiring of the “feast and famine” nature of the business. “All the money would be tied up in a house and I’d be waiting for a sale before I could have some.” Also, the booming housing market meant more competition. “Everyone started to do the same thing as us.” So in 1987 he switched to installing conservatories.
To begin with, the going was tough. His new firm, Westbury Conservatories, got just three customers in the first year. “It was hard to get people to trust me. I was a small firm. They’d always ask if I’d done the conservatories in the brochure.”
As the decade progressed and housing boom turned to bust, things didn’t get any easier. But Hey persevered, and gradually his reputation grew, along with his sales. By 2000, Westbury Conservatories was selling £1m of conservatories a year.
But the real breakthrough came in 2001, when Hey tackled his biggest problem. The joiners who supplied the company “weren’t reliable and that meant I was sometimes forced to let my customers down”. So he spent £700,000 buying a joinery firm. While it meant that Hey had to learn fast about manufacturing, “it improved our company completely”.
He invested heavily in software-controlled machines that made products faster, and more efficiently. The new machines also meant more could be done in the factory, so less time was needed on site. This boosted profit margins, allowing Hey to spend more on marketing and win more customers. Group sales – there is also a window and joinery unit – hit £5m last year. Hey now employs almost 50 people.
Recently he has also decided to focus more on higher end ‘garden rooms’ than conservatories. “Conservatories were getting cheaper and often becoming badly-put-together rooms with bad insulation and ventilation.” To mark the change in emphasis, last year he renamed the firm Westbury Garden Rooms.
Hey, now aged 51, continues investing heavily in new machinery and last year splashed out £500,000 for a new tooling centre. The new investment hasn’t gone smoothly and there have been some teething problems, says Hey, but “this year it will make a big difference” to the group’s prospects.
Published in
People in the news
| More
articles
by
James McKeigue
FREE - MoneyWeek's daily investment email
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.