As an experienced mountaineer Jamie Smith knew many people wanted to learn ice climbing but the only option was doing it outdoors
After spending seven years in the RAF, Smith began working on the plans for The Ice Factor while studying at Strathclyde University business school. The adventure centre – complete with indoor ice climbing wall – was launched in 2000. Here he tells how the Kinlochleven business has grown.
What do you do?
We design and operate adventure centres. We provide a facility that allows climbers to practise, train and learn the core mountaineering skills. Moreover, we provide “off the street” instruction, allowing novices, from the age of seven up, to learn rock climbing and ice climbing. We also have an aerial adventure course and giant swing. Basically, we make adventure sports accessible.
Where did funding come from and who have supported the business?
My wife and I invested the initial £638k. I then raised additional funding through a business partner and we used that to leverage the finance. Subsequently, we raised £1.5million from Highland Venture Capital, with finance fro m HSBC Bank.
What is unique about your firm?
The indoor ice climbing wall is the biggest in the world. This presents a significant barrier to entry into the ma rket place for competitors.
What has been the biggest investment?
We are investing in a new Ice Factor in Inverness and another project in Vermont, US A.
Has there been a key moment?
I won the IoD emerging director of the year award in 2008 and at the event I met venture capitalists, business angels and Irene Grant, who was then head of corporate banking for HSBC in Scotland. Those contacts proved pivotal to our growth plans.
What is the business plan and how do you intend to grow?
We aim to establish a network of Ice Factor franchises. Our target is to sign one deal a year for the next six years, then seek an exit through acquisition or an initial public off e ring on the stock market.
Do you have any non-executive directors, mentors or key advisers?
Our non-exec director is Professor Phil McCully, of McGill University in Montreal. We met on the Entrepreneur Development Programme at MIT in Boston. His strategic input – and humour – have been a major strength
How does the company use technology and IT?
The plant room is the engine of the Ice Factor – it cools the ice and warms the building. No one had built indoor ice walls on the scale we did so this required a mixed team to get a bespoke system. Our IT system is being developed to give us a proprietary electronic point of sale system and integrated web 2.0 platform.
Who are your key customers?
Climbers and mountaineers – our core market is families who are looking for an integrated, shared experience. The Kinlochleven centre averages 130,000 annual visitors, making Ice Factor one of the top five visitor attractions in the Highlands.
What has been your best achievement?
In 2000 I was struggling to raise funding to get started. The Kinlochleven facility was a former aluminium smelter and needed £1.2million spent to decontaminate the building. I flew to Brussels to lobby EU ministers and encouraged 38 of them to come to Kinlochleven. I showed them the plans and commissioned a 5ft model of the vision. They provided £1.2million of funding towards the project.
What has been the biggest hurdle?
In July 2009, our bankers removed our line of credit, called in our overdraft and left us exposed. We went from being cash-rich, with a strong balance sheet and predictable turnover, to having a £400,000 plus cash call and slashed sales. HSBC reviewed our business and agreed to re-bank the company. Since then, we’ve found HSBC contacts have really opened doors for us. I feel for the first time in 10 years that our bank is a partner, not an adversary. Last year was our most profitable.
Where do you want the company to be in 10 years?
An established group, with eight or more branded Ice Factor Adventure Centres and turnover of more than £40million.