Tony McDonough meets Gaynor McGrail,MD of I-Paye

ONE weekend five years ago, Gaynor McGrail, her husband Shaun McGrail and their friend Paul Hughes discussed an idea for a new business over a few beers.

By the following Friday, I-Paye was born. That was on April 1 – but no fools are they.

Five years later, it is turning over £60m – and that is less than last year’s £67.4m.

The Knowsley-based firm provides “umbrella” payroll and financial services help for contractors, freelancers and self-employed professionals.

Hughes is the technical and tax director, Shaun McGrail the finance director and Gaynor McGrail is managing director.

She said: “You may have a construction company who might want to hire a number of people on a project for a fixed period, but don’t necessarily want them on their payroll.

“They might go to an employment agency who will find the people and then, after talking to them, the agency may come to us and say ‘we have five or six guys here for you’.”

I-Paye provides this service across a number of sectors including construction, engineering, oil and gas and IT.

In the last few weeks, the firm has filed its latest accounts to Companies House which shows a drop in annual turnover from £67.4m last year to just under £60m.

McGrail blames the impact of the recession – particularly on the construction sector.

“Pre-recession we had around 2,000 clients, and we now have around 1,400,” she said.

“What has happened in construction is that projects were cancelled or postponed.

“However, now we are starting to see that come back.”

She adds that client numbers have risen by 13% in the last quarter, and claims the signs are good for this momentum to continue into 2011.

She said: “Our perspective is that we operate across a number of different sectors so the risk is spread across those.

“For example, if you look at the oil and gas sectors, there has barely been a fall in business at all.”

McGrail, 35, was born and brought up in Wallasey, Wirral. She left education at 17 to work in Merseyside’s long-established wealth management sector.

“When I was at school, it was the days when the careers officer would come in and advise you to go and find a job as a secretary,” she said.

She took a job with a stockbroking firm called Neilson Cobbold, which was later taken over by Rathbone Brothers.

She worked in back-office compliance and after four years went to rival Rensburg to do a similar job.

She later worked in the chief executive’s office doing statistical analysis.

And then came the late-night drinking session five years ago.

Both Hughes and Shaun McGrail were accountants who had both worked together at Deloitte. The latter later went to work for PricewaterhouseCoopers.

This was followed by three years of working seven-days-a-week, 12-hours-a-day, to put I-Paye on a firm footing.

In the middle of all that, the McGrails also found time to produce a daughter – Lily, now three.

McGrail said: “We didn’t expect it to grow as fast as it did and we really had to put in the hours.

“At one point, Shaun was holding down two jobs.

“We knew our product and knew our services.

“It has been a terrific last five years and a huge learning curve.”

I-Paye exists in a competitive market place, but the trio insists the range of services it offers gives it the edge over those competitors.

They all refer to what they call “the I-Paye way”.

One of the cornerstones of that is a policy of not employing sales teams, with face-to-face pitching to potential clients done either by the directors themselves, or at least by senior managers.

“It goes down very well with clients when the A-team turns up,” said McGrail.

“We think this is a very serious business and the people who are meeting the clients should be well-trained and well-informed.

“My main role is to raise the profile of the company – business development, marketing and media.

“The directors and everyone who works here agree about what we want in terms of the reputation of the business.

“We expect the highest standards of accuracy, compliance and customer service. We have an excellent team of managers that understands that very well, so we never have to wave a big stick.”

In the summer, I-Paye, which employs more than 30 people, opened a second base up in Scotland.

The plan was for that operation to break even within a year of opening, and in the first six months it has already moved into profit.

Another growing part of the business is the international arm, which is mainly looked after by Hughes.

That provides payroll services for British nationals working in other countries. He said: “There is a lot of talk about people coming here to work from other countries, but it may surprise a lot of people to learn how many British guys are abroad.

“For example, if you go to a shipyard in the Netherlands, you will find a lot of British guys there. It can be challenging to get your head around the tax systems of other countries. Some people think you can go and work there for a year and get away with breaking the rules.

“However, we know that is often not the case, and that is where I think we go further than other firms in our sector. A lot of people have been very grateful that we have guided them from day one.”

McGrail says more international expansion is on the cards, as well as a plan to open other offices across the UK. While the recession has slowed the firm’s growth plans a little, though she and the other directors retain big ambitions for future growth.

Last year, it was ranked 7th in the Sunday Times Fast Track 100 league table and topped the LDP’s Hot 100 list. She added: “We may open an office in the South West of England. Part of our service commitment is to react fast. If someone wants us to attend a meeting at short notice, then we want to be able to do so.

“We still have the same plan. Our ambition is to more than double in size in the next three years and we are prepared to do that organically, or through acquisition.”