Quooker UK's Stephen Johnson: The cash rule that saved a £100m business

Two lessons sit at the centre of how Stephen Johnson built Quooker UK into a business worth over £100 million a year. One came from his father, decades before COVID existed to test it. The other came from a Premier League sports psychiatrist Johnson hired for reasons that had nothing to do with football.

Johnson is the UK managing director of Quooker, the business behind the 100-degree boiling water tap now installed in 750,000 British homes. He built it from a car boot of 40 sample taps and a six-month contract, after 26 years in his father's family furniture business ended with him being turned down for jobs on the grounds that he had ‘no skill sets’ beyond working for his dad.

Johnson sat down with Sir Richard Harpin on the Business Leader podcast to talk through the cash discipline that let Quooker treat customers fairly when every kitchen dealer in the country shut its doors overnight, and the internal shift, driven by outside expertise, that has let a business built entirely around one man's instincts scale to 170 people without losing them.

In our interview, you will learn about:

● The two-word rule from his father that saved Quooker's cash position overnight

● Why a Premier League sports psychiatrist has a standing seat in Quooker's leadership meetings

● Why Quooker employs all 120 of its engineers directly and has no subcontractors

● What happened when a lockdown TV advert turned into two years of doubling growth

A rejection-letter education

Johnson spent 21 years working in his father's fitted furniture business, Neville Johnson, learning every part of it from accounts to the factory floor. When the company sold in 2005 for £60 million, he decided, in his mid-thirties, that it was time to find out if he could succeed without his father's name attached to him. It went badly.

He sent off "thousands of CVs" and was told, repeatedly, that 26 years in a family business counted for nothing without formal qualifications or outside experience. The company that eventually took a chance on him was Quooker, then a small Dutch business looking for someone to build its boiling water tap brand in the UK. He got a six-month contract, a hire car and 40 taps.

Three taps, one visit

Working alone for his entire first year, as the Dutch owners wouldn't let him hire anyone, Johnson devised a method for winning over kitchen dealers. He sold the owner one tap for his home, one for the showroom and left a third on the shop floor for him to sell on. "In my first year, I opened 333 dealers and sold 999 taps," he says. "And the business has built from there."

The first person Johnson hired wasn't a salesperson but an installer. After a newspaper advert started to drive footfall into those dealer showrooms, an unplanned side effect emerged. Customers were disappointed to hear that they would have to source their own plumber to fix their shiny new taps.

However, recruiting a subcontractor was never on the cards. "I wanted to develop a business where we gave an amazing service," Johnson recalls. The principle of employ and not subcontract has held all the way to today's 120-strong national engineering team, which completes around 2,000 visits a week and has helped the business hold a 4.9 Trustpilot score across 750,000 installations.

‘Cash is king’: the rule that saved Quooker overnight

Long before the Covid pandemic struck, Johnson's father gave him two pieces of advice that he says came home to roost in March 2020: always manage your debtor book and always keep enough cash in the business to survive a year with no income at all.

"He said, 'I manage my debtor book because somebody who doesn't pay has got a problem. By managing my debtor book, I can see every problem in the business.' The other thing he said was that you don't know what's around the corner," Johnson recalls.

On the 24th of March 2020, Johnson watched the government announce a national lockdown and within hours every kitchen dealer in the country closed its accounts departments. This left an estimated £5-6m owed to Quooker, with no indication of when it would be paid. As he had followed his father's rule for years, Johnson wasn't forced to chase that money.

"Because I had worked to the philosophy of having enough cash to survive, I could take an approach with my customers where I could be fair to them and say, 'You don't need to pay me. You can wait until you reopen'," he says. "We leveraged brand equity in that period massively because we could treat our customers well. But I could only treat them well because I'd managed the business in a certain way that I'd learned from my father, and I look back on that as one of the greatest lessons."

Cash discipline bought Johnson time but it didn't bring back sales, which fell from around a thousand taps a week to almost nothing between March and June 2020. "I'd gone from 4 weeks of famine where I'm thinking, “This is horrendous,” to the most unbelievable growth that I'd ever experienced,’ Johnson says of what followed.

Sitting in an empty office, he decided to finally test an idea he'd had for a while. It involved selling taps over video call. A camera went into the showroom, an agency turned around a quick TV advert and Quooker began telling customers they could buy a tap from home. From mid-June 2020 to roughly mid-2022, the business doubled year on year. Video has stayed part of the business ever since.

The Premier League psychiatrist who taught him to let go

Johnson names his biggest mistake as staying too long as the person doing everything himself: "You're doing everything yourself and then you suddenly grow this business and realise you can't do everything yourself." The turning point was hiring Dr Martin Littlewood, a sports performance psychiatrist who works with Premier League clubs on the relationship between coaches and players.

"Football for me is very visual," says Johnson. "You watch a game and you can see who's performing and who's not." In my office, I sit and look out on 60 people and ask if I know how they're performing and how they're feeling."

He chose a sports psychiatrist over a conventional business coach deliberately, he says: "If I speak to business coaches, for me, it becomes very corporate and less about the drive and the enthusiasm." Littlewood still works with Quooker today, and sits in on meetings with Johnson and his staff to help work out what best performance looks like.

The process forced Johnson to get his own methods for running the business out of his head and into a form other people could use. "I don't want 170 Stephens in Quooker," he says. "I want 170 individuals but working to a strategy and a philosophy that I thought worked."Why every one of Quooker's 170 staff has access to a psychologist

Johnson also added a full-time staff psychologist alongside the performance coach. He offers one example he returns to often. A colleague whose father was diagnosed with terminal cancer used the psychologist's services to process the loss, returned to work within a month, and remains, in Johnson's words, "absolutely Quooker through and through".

"We ended up with an employee that was ready to deal with what would come," he says, "and as an employer, I didn't lose a member of staff for longer than I needed to."

Johnson is candid that holding onto a family-business feel gets harder as headcount grows. He still tries to greet every member of staff individually when he's in the office and personally notes birthdays and work anniversaries, but admits it's proving a challenge as the business scales.

This observation mirrors, he says, exactly what he saw go wrong when private equity bought his father's old business: "They don't understand the DNA and it becomes too corporate. They lose the family values and the entrepreneurship. I think they then lose the heart and soul."

Stephen Johnson's four lessons for leaders

Cash discipline is a decade of habit, not a crisis response. Johnson's father's rule about the debtor book tip proved to be the thing that determined whether Quooker could afford to be generous when Covid arrived.

Bring in outside expertise before you need it, not after you've burned out. Johnson didn't wait until the business broke to hire help extracting his own methods. He did it while still in control, which is what made the handover work.

Own the moment your product touches the customer. Employing all 120 engineers directly gives Quooker a level of control over service that subcontractors can't match. It's a big part of why the business has held a 4.9 Trustpilot score from over 13,000 reviews.

A crisis can surface an idea you already had. The video sales channel was a plan Johnson had been sitting on, which he had ready to go when a lockdown and empty order books finally forced him to try it out.

Listen to the full conversation with Stephen Johnson on the Business Leader podcast.