Four of us started LAN 2 LAN in 1994. We had all been in IT provision for at least 10 years and had witnessed the collapse of profit margins for hardware.

We knew we would need to differentiate ourselves from other IT value added resellers as there was no way we could compete with the big boys, like Computacenter, solely on the supply of goods.

But if we managed to show we cared about our customers, we could offer a personal service a larger organisation would find difficult. One of my proudest achievements is to still have customers who have grown with us since those early days.

Our business was formed with just £20,000, no bank borrowings, and no customers. We very quickly decided that Lotus Notes was going to be a key product for us. Lotus’s own figures showed an 8:1 ratio of service revenue to product revenue. This had the twin benefit of improving margins and reducing the drain on our cash flow.

We started the business at the best possible time in the economic cycle, when firms were starting to loosen their purse-strings after the recession of the early 1990’s. By the time the internet boom had started, we had a solid company with the expertise to exploit the opportunity. We had also formed some strong partnerships with suppliers, and vendors.

Our turning point came very early on when we discovered one key strategy we hadn’t thought through – funding product sales. Our £20,000 didn’t go far, about half the money was spent in forming the company, funding a small office and equipment. This left a float of just £10,000.

In 1994 an office PC and printer could cost £2,500, so when we sold 10 PCs to a customer, paying a distributor without borrowing money became a balancing act. I’ve always recognised a strong line of credit is fundamental to the success of the business, so our policy is to always pay distributors on time. This has resulted in us having an A1 credit rating from Dun & Bradstreet, which puts us in the top 3% of IT companies in the UK for financial stability.

In order to preserve our cash flow and improve margins we had to keep emphasising services and support earnings over product revenue. We needed to start employing technical support staff. Fortunately, from our years in the IT world, we already knew of many people with the right skills and attitude to succeed, and some of these became our first employees. We also only ever took on a new member of staff when we could afford to.

The IT world changes as quickly as any industry, and part of the skill is to catch the wave and hang on. LAN 2 LAN has moved in the past three years into IT security and mobile computing. These are exciting areas, which fit nicely with our existing portfolio. One lesson I learnt at the beginning was that we can only really succeed in these new areas if we are serious about providing a better product than our competitors. This inevitably means spending money on new specialist staff and technology, and training existing staff to be able to support the new technologies.

Having four equal directors/owners has been one of our greatest strengths. We can bounce ideas off each other, and know we will get an honest opinion. This has enabled our growth to be smoother than most firms.

For the future we will use our knowledge to develop our people, create new services and improve the quality of our existing ones, as this is what customers want.

In the past eight years John Goodman and his co-founders have grown LAN 2 LAN from a £770,000 turnover business to one with revenues of £6m. The Woking-based firm, with a staff of 35, has achieved 15% year-on-year growth in a tough market.