Contractor interview: steve sammut grows a business despite everything

If you wanted to look at a contractor for whom persistence has paid off, Steve Sammut would be a prime example.

Building A Business From Contracting

The 40-year old Sammut has built a business contracting in schools for music lessons. At one time these were paid for by the education system, but in recent years parents have to pay for them themselves. Since 1994, Sammut's Aldershot, Hants-based Southern Counties Music and Publishing Services Ltd. (which trades under the name Scampsmusic) has provided instrumental lessons in schools to more than 16,000 students across the UK. There are clearly a lot of Brit guitar-pickers and grinners who have Scampsmusic to thank.

Gap-Filling Strategy

Sammut started the business with his wife about 15 years ago when they saw an opportunity to provide these lessons under contract with schools which could no longer offer them themselves.

''We thought of it as a gap-filling strategy at the time, and we just did it as self-employed teachers, and we love teaching music,'' Sammut explains. ''But the business grew rapidly on a word-of-mouth basis, because head teachers really loved our services, and they operate in so-called 'clusters,' groups in which they share ideas.

The word spread, and we began to not only teach ourselves, but to work with teachers whom we sent out on jobs,'' Sammut says. About five years ago, Sammut put his business together into a limited company shared with his wife, and began to grow a true small business out of the contracting.

Getting Through Tough Times

It was then that some gloom appeared in the otherwise bright skies. Sammut decided to admit a financial investor to the business, one who promised great things. Sammut's wife sold out her shares to the financial investor, but the great things did not materialise.

''We had to buy the share of the business back from the investor, and this took a lot of capital,'' Sammut complains. ''Fortunately, we were able to get a mortgage on the house and that financed our business so that we could keep all our employees. My wife came back and began working again, and of course she was paid with dividend income.''

Anger at 'Income Shifting' Proposals

Sammut expresses great anger at the proposed 'income shifting' legislation, which fortunately the Treasury has delayed for a year. ''My business could not have survived if the 'income shifting' bill had been passed,'' Sammut exclaims. ''We needed to share the risk, by taking a mortgage on the house together, and to share the reward in dividends or we wouldn't have had enough income to keep going and to pay the teachers. That law would have caused us serious problems and you can see what a nightmare it threatened small business with.''

Crisis Passed

Sammut not only got his business through this crisis, but he continued to grow it and now has it back making serious money again. But challenges don't faze Sammut. When he's not working, he's working out: he represents the UK in athletic events for the hammer throw.

''You need to have a real passion and belief in your product and your own capabilities to deliver a business that works,'' Sammut insists. ''When you make the transition from the comfort zone of employed to self employed work you accept the risk and choose to put not only your time but your life investments on the line. The government needs to reflect on this policy very carefully, especially with regard to husband-and-wife directorships. For every head of a business there is a neck. Without the neck nothing works!''