The Collapse of Zedbox

How 9 consecutive catastrophic events devastated my business in one year. And what I’m doing to clear up the mess.

History: The Accolades

In summer 2017 I was awarded IoD Director of Year in the eastern region, I’d built a successful, industry-leading business with a great team, excellent year on year growth, multi million pound revenues and a substantial valuation.

Smart was a business that I’d started from scratch with a £99 table saw and built into a market leader with 50 staff, 2.5 acre factory site, a state of the art manufacturing facility and thousands of happy customers across the UK.

We’d won multiple awards and had become well recognised in the UK. Our commitment to training made us one of the largest employers of apprentices in our local area. With an excellent product range and the unparalleled scope for product innovation we enjoyed many consecutive years of 40%+ annual revenue growth with the substantial demand for our products climbing significantly every single year. Then I launched Zedbox....

The Plans

Given years of successful product and market development in our field, we felt pretty confident about developing what appeared to be a natural progression from garden rooms into residential annexes. With Smart now motoring nicely, I turned my attention to a new separate R&D facility specifically for Zedbox in the UK and for international product expansion. We planned our large brand new factory in Bury St Edmunds in microscopic detail and received bank, funders and grant backing for our £1m investment project which would have created yet another 50 jobs.

Zedbox was registered as a trademark worldwide and the partnership offers were flooding in. Within 7 days of launch we had over 10,000 consumer enquiries and over the following months we were taking an order every day and had built a substantial order book to fill the new production line. I had the backing of the bank, a team of top external advisors and a detailed 60-month business plan agreed by a top accountancy firm.

It was all going so well....

The Collapse

Two years later, having been devastated by catastrophe after catastrophe, Zedbox was bust and I had to sell Smart for next to nothing. 14 years of hard work, luck, risk and perspiration had become dust. In Thurston, Smart was saved by the safe hands of the incoming MBI team, a good solid business and the team of 50 people were saved, but down the road in Rougham, Zedbox and everything it stood for was gone.

The collapse of Zedbox had left a trail of devastation - customers, suppliers and staff were innocent parties in what had become a complete debacle. And it was MY fault.

In due course, when the fog has cleared further, I might just write a book about the details of those nine consecutive catastrophes. The catastrophic events at Zedbox were wide ranging and included, to identify just a few, HMRC changing its policies on our accounting principles (which knocked our cashflow), increasing quality issues which suddenly knocked on to increase installation times and costs by 400%, coupled with delays in the due diligence as I tried to sell my key asset to reinvest in Zedbox. Consecutive catastrophic events don’t just add to each other, they multiply the existing situation.

The toll on my team became apparent and I ended up doing 5 people’s jobs - and none of them particularly well. I can now admit to myself that I had a complete mental and physical breakdown. Then trying to resolve the issue by bringing in a new Zedbox MD caused even greater problems (and we’re now preparing our legal case against the individual).

It’s said that a typical business should be solid enough to withstand one, maybe two, catastrophic events. But we suffered nine. With five of those happening in just the last two months. Zedbox became a maelstrom.

Nevertheless, those individual catastrophic events did occur - and my business (and my health) were destroyed. I’d gone from hero to zero in just a few months. I was pilloried (and rightly so, by those who were effected by the collapse) as some kind of crook.

Whilst I’d lost everything personally, nothing hurt quite so much as the pain of the innocent parties who’d lost out as Zedbox folded. After the collapse, I spent several days, alone in the Zedbox office, attempting to contact the main creditors to explain the situation. The local press and especially social media had a bit of a field day at my expense.

The Resolution

So I created a multi step plan to resolve the situation. It’s going to take some years, but I’m a determined sort and, as a business friend called it, I formulated the “Redemption Plan”.

It involved five incremental steps.

1. To sort out my health

2. Establish if there was ever a way to repay those who’d lost out in the Zedbox collapse

3. Establish whether I should actually re-enter any kind of business environment

and then, if I’d managed to resolve the first three:

4. Whether I could develop a product of which I would be proud

5. Whether I could establish a business that would be solid, viable and manageable (as I had done with Smart) and strong enough to commence a repayment plan.

I started with my health. And, as this is about business, I’ll shorten this story and leave it that I’m now mostly recovered. It took over 6 months, with the love, help and support of those who decided to stick with me.

Secondly, I spent some of the summer developing a concept with my solicitors to ensure there’s a way to return funds to the Zedbox creditors. I'd lost everything, and this is a personal choice. I understand it’s never been done like this before and I’m excited that there’s now a way to create an independent Trust of which the creditors will be the beneficiaries. The ZB Trust www.zbtrust.org.uk is now being formed with a independent Trustee with sole task of paying beneficiaries over the coming years.

My third point was quite simply driven by Point 2. With Smart I’d built up one successful, thriving business and created many jobs. Whilst Zedbox had gone horribly wrong, I’ve learnt some enormous lessons and if I was ever going to find a way to repay creditors it had to be through a new business, not - as I’d often felt inclined - to hide away under a rock.

Point 4: Importantly though, I’m determined not make the same Zedbox mistakes again. I wasn’t hands-on enough with the development of the Zedbox product. Upon reflection, it simply wasn’t good enough. So, since last summer I’ve designed and developed a new range of Annexes from complete scratch. Solid, simplified, attractive and comfortable. Working with a few experienced individuals, who I trust and respect, we’ve developed a simply outstanding product and we are soft launching now. We’ve four different ranges- Ivyo, Instannex, St George and XB in 16 different sizes. They are all based on the same core. Take a look at www.gardenannexes.com

A good, solid business is therefore able to fund the ZB Trust. We’re assigning all profits of all sales of the XB range (likely to be our best seller) directly to the Trust, and ensuring the Trust encounters minimal overheads. With a fair wind, we intend that the Trust will soon be able to honour warranties and will return all funds to the creditor beneficiaries within four years.

So to Point 5. Well that’s today. I’m starting slowly and steadily, like I did with Smart. A low risk growth plan to build a great, solid business that won’t get side tracked by events. A very small team of trusted individuals and a commitment to excellent quality and excellent customer service through a network of Local Partners. I’m directly involved in every Annexe we create - and that’s never going to change. I'm now doing what I really love.

Thanks for reading this. Now, onto the next stage...... Wish me luck!

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If you are creditor of Zedbox Ltd, Zedbox UK Ltd or PDS Worldwide, you will automatically become a beneficiary of the ZB Trust and you will be contacted shortly. info@zbtrust.org.uk