fulfilling growth potential - boost capital · 2018. 5. 1. · much money as we had been in...

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Fulfillinggrowth

potential

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How Boost Capital Can Help• Unsecured financial solutions from

£3,000 to £500,000

• A decision in principle within 24 hours

• Access to working capital in as few

as five business days

• Funding can be used for any

business need

Finance Solutions for Small Businesses£3,000 to £500,000

Call 0800 138 9080

In 5 days

Email: [email protected]: www.boostcapital.co.uk

T he UK is seeing increasinglyfavourable economic conditions forsmall businesses.

The Small Business Index, a respected study onconfidence among small companies undertakenby the Federation of Small Businesses, has risento its highest level in three years. However, companies of a limited size continue

to face significant challenges. Healthybusinesses with sound revenue models spend alot of time and resources on cash flow, asituation which can place growth opportunitieson the back burner.Consequently, ambitious operators with plans

to expand are finding their endeavours arebeing stymied by a lack of finance options. For this guide, I spoke to five businesses that

found a common enabler for their short-termfinance needs. Getting the vital funding in placemeant these companies were able to takeadvantage of growth opportunities presentedto them.I hope you enjoy their stories, and that you can

draw on their tenacity to inspire you in yourown business. n

Best regards,Ben LobelEditor, SmallBusiness.co.uk

3

4 Leatherhead Van and Truck

6 Boardwalk Surf

8 Wholesale Linen

10 The Cuban

12 Tex Mex

13 Boost Capital comment

Contents

Welcome


We’ve been selling vans for 25 years, andaround two years ago we took over asite that had been supplying vans for a

decade or so. We formed Leatherhead Vanand Truck, with myself and many other familymembers working in the business. At the time we came in, the site was selling

probably 10-15 vans a month. We identifiedthe potential to sell around 60 a month, butwe needed money to buy stock. A few yearsago, a company like ours could buycommercial vehicles through a stocking loanfrom a finance company, but this method offinance has gone out of favour. Most of theindependent finance companies that offeredthis type of loan have gone bust, merged withother institutions or just run out of money.We did manage to secure £25,000 of bank

finance five months ago, which we spent onfive vans, but it took two years of our bankmanager trying to persuade his credit peopleto give us the loan. The bank manager washelpful, but it wasn't a method of funding we

could rely on moving forward.The main way we have raised funds so far is

through people such as other dealers who putthe money up to finance the vans, but inreturn for half of the profit, on an SOR (sale or

4

LeatherheadVan and Truck

Owner: Ryan Butcher

Founded: 2011

Based: Dorking, Surrey

Type of business: Van andtruck sales

Challenge/opportunity:Moving away from financiersdemanding a profit share

Fast Facts


‘We've got 45 vanshere, and once themoney is paid backwe will go back tothe 'well' and get

some more capital’

return) basis. However, we were giving awaytoo much profit using this method so weneeded to look at other options.

The finance struggleInitially we looked at such avenues as thesmaller banks and peer-to-peer lending. Theproblem is, while our company has a very goodreputation, the motor trade in general doesn't,and this means companies such as ours can bereceived poorly by banks and people who investthrough peer-to-peer lending. Also, the fact thatwe were turning over £2 million a year, buthaving figures showing we were giving awaynearly £200,000 a year in profit, meant that itwas difficult to get any money out of anyone.We discovered Boost Capital through an

online advert that came up after searching formerchant funding. There's a van site down onthe South coast that does bodywork; they dopaintwork and bodywork on our vans. They

had previously used us for a referencebecause they wanted a loan from Boost for anew ramp. We talked to a representative atBoost and I remembered where I had heard ofthem previously. We ended up getting £50,000 from Boost

which paid for about 12 vans. I'd definitely usethem again. I was very impressed by the speedof the transaction, and it could have beenfaster still; it was only held up from our sidebecause they needed confirmation of ourlease from our landlord who lives in Spain.Apart from that, the whole deal would havebeen done in a few days. Compared to the process of giving away as

much money as we had been in profits, Boost ischeap money. We've got 45 vans here, and once the money

is paid back we will go back to the 'well' and getsome more capital, and in a year's time all thevans will be ours. n

5


I started the business in October 1990 afterpreviously having a surfing-orientatedretail business for two years. Originally the

company comprised one store of approximately2,000 square feet but it's now three stores of atotal of 6,000 square feet, all in Newquay.Although Newquay is a seasonal town, we havemade an effort to stay open every day of theyear except Christmas Day. I originally raised money for the much smaller

surf store in 1988, with a deposit of £5,000. Idid it by saving every penny I had over a periodof 18 months to achieve that deposit in order toget the business moving. Back in 1990, getting the word out about our

business was all about running double pageadverts in the surfing press, most of which weremonthly magazines. This was probably thepredominant strategy in the pre-internet days. The biggest challenge of the last five years has

been online competition. But instead ofmoaning about being undercut by onlinesuppliers, we embraced the situation and joined

the online revolution ourselves.In 2008 we built some offices on our rear flat

roof and employed two IT people to developour online sales and marketing. We've beentrading online since then. On the online side theturnover has gone from 0 to £30,000, to£60,000, to £90,000 per annum.

Taking stockAt the end of last year we were faced with agreat opportunity. A direct competitor of oursunfortunately had gone bust at the end of 2012and there was a chance to acquire a substantialamount of their stock at a massively reducedprice. The only problem was we didn't have theavailable funds to snap up the goods as it waswinter; we were in the middle of the off-season. I didn't approach my bank for the money

because I didn't think there was much point; Ibelieve banks are closed shops at themoment. My IT manager investigated theoptions and talked to a representative ofBoost, we put all our data in front of them and

6

Boardwalk Surf


‘If I couldn't havefinanced the deal I would

have had to let theopportunity go, but with

the financial help wewere able to go ahead’

they came back with a positive. In the end we managed to pick up the stock

for £20,000, but it actually would have beenworth four times that through wholesale. If Icouldn't have financed it I would have had tolet the opportunity go, but with the financialhelp we were able to go ahead. We countedout the stock, put a value on it, negotiated afigure and that was that; it went straight intoour warehouse. I would use the method again. I find this

process of raising short-term finance has beenvery efficient. It's a very viable avenue of raisingfunds over and beyond what the banking sectorwould be able to offer. I imagine most peoplewho would turn to short-term finance havealready exhausted an option with the bank andBoost would be the next option that's viable. Overall, it's a sensible way of making payments

against your sales, on a fixed percentage. That’sa clever way of paying back the money,reflecting turnover in the business and apercentage of that. n

7

Owner: Tim Smith

Founded: 1990

Based: Newquay, Cornwall

Type of business: Surfequipment retailer

Challenge/opportunity:Chance to buy discountedstock

Fast Facts


Finance For Any Business Need

“Boost Capital provided me with an accessible, honest approach to my business and its financial needs.”- Fashion Retailer, Cambridgeshire

Call 0800 138 9080Email: [email protected]: www.boostcapital.co.uk

I started the business in April 2008, usingpersonal savings to get the company offthe ground.

In the beginning, I had purchased a small£100 job lot of wedding products from eBayas our existing mortgage company haddeclined in profit in 2007 and I was thereforelooking to find another form of income. I then decided to source these products from

wholesalers in order to set up an online shopand sell wedding accessories on a regularbasis. The business did well and customerswere requesting other items, so weprogressed to sourcing wedding linen for thewedding and hospitality industry and slowlygrew into a successful wholesale company.Wedding trends change constantly and I

eventually felt it was time to introducedifferent styles as well as providing bothbudget and bespoke products for individualcustomer needs. Finance was required toimport bulk orders of the new stock.Customers were advising us that the wedding

industry was becoming more and morecompetitive and wanted to know if we haddifferent styles to offer in order to make theircompany stand out from the others.Bank loans were considered but this had

8

Wholesale Linen

Owner: Athanasia Norman

Founded: 2009

Based: Sutton, Bedfordshire

Type of business: Linenwholesaler

Challenge/opportunity:Diversification of productlines

Fast Facts

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‘The business is now able tooffer products for the lower

and upper market whichsuits individual budgets’

proven difficult for us. Although the companyhas been established since 2008 as a T/Astatus, the company changed to LTD in 2012and because of this three years’ auditedaccounts were required and these were notavailable. I discovered Boost through asearch on Google for business finance andthe problem was solved.

Order of the dayIn order to import the new items we had toplace quite a large order for the new ventureto be profitable. We obtained samples andput forward our new designs to ourcustomers which proved to be very popular.The business now offers products for the

lower and upper market which suits

individual budgets. We have competitors butit is customer service that is important,talking to your customers in order toestablish new trends and needs.In terms of advice to other businesses, I

would say always research the products yousell to ensure there are no upgraded versionsand new designs. Get to know yourcustomers and ask them if they would like tosee any other products or services added toyour existing range.Boost Capital offers a very quick way of

raising finance and talk to you all the way,Ryan was excellent with regards to answeringany questions with the whole applicationprocess. If you are struggling with your bankthen don’t give up! n

9


I have a restaurant and bar in Camden,North London, which was opened in2004. The business cost around half a

million originally and we used bank capital atthe beginning which has all been repaid now.Business has been affected in recent years bythe recession, but the summer of last year hitour trade hard too. The combination of the Queen's Jubilee, the

Royal Wedding and the Olympics was great forLondon, but it was drawing tourists away fromus and towards other parts of the city. We arelocated in a tourist area; 25 per cent of allinbound tourists to the UK come to ourlocation, half a million people on a weekendmight visit where we are. However, Londonersand tourists were encouraged to stay awayfrom certain areas, so to prepare ourselvessufficiently, the business needed to bestabilised in the short term with cash. In the hospitality business you need a critical

mass of staff. We're open seven days a weekfrom 10am to 2am and all the time you need

receptionists, people to answer the phone, abartender, waitress, you need to keepcapacity up. We didn’t want to sell any equity, and while

something like short-term finance might seeman expensive product, if it's something youuse in the short term it doesn’t mean you loseequity in the long term, so it's cheap really.

Considering finance optionsWe thought about whether we would belooking for an investment partner and maybeshare some equity. A bank loan was out of thequestion; they just weren't lending in ourmarketplace. Whether it be semi-secured orunsecured lending, leasehold restaurantproperty businesses are not flavour of themonth when it comes to banks. However, wedid manage to get an overdraft facility fromthe bank, which fortunately we don't need touse. However, we needed extra moneybecause we didn't want to run out. You needcash to operate a business.

10

The Cuban


‘As a result of oursuccess followingthe Olympics, weare converting an

upper floor toincrease covers’

The money we borrowed we actually endedup paying back early, because we did betterthan we expected during the period after theOlympics and, so far this year, we've seenmassive growth. After the dip during theOlympics there's often a honeymoon periodfor two or three years in host citiesafterwards, when people want to go and visitthe sites. We knew about the effect of theinternational advertisement the host citywould get, statistics told us that it wouldhappen and it is indeed happening.We renovate the premises every three years

to keep our product at the right standard. Asa result of our success following theOlympics, we are converting an upper floor toincrease covers, and as a knock-on effect ofthe financial assistance we received fromBoost it’s likely we’ll be able to fund thisthrough our own profits rather than having toraise money. n

11

Owner: Roger Payne

Founded: 2004

Based: Camden, London

Type of business: Restaurant

Challenge/opportunity: Cashflow/refurbishment

Fast Facts


I started my current business six years agoafter having several restaurants before.Running a restaurant pays better than

being a chef! Originally I had some money of my own to put

into my current venture, but I had hoped toraise some bank finance too for workingcapital. However, the bank reneged on anoverdraft facility after I signed all thedocuments. At the time I needed £30,000, butfrom what people I knew were saying aboutbanks and their lending habits, I didn’t bother.Bearing in mind the legal fees, arrangementfees, it’s incredibly costly.

A much-needed solutionI eventually found Boost, from whom Iborrowed £15,000. The money was set asidefor some overdue renovation work on thekitchen. I needed to sort out holes in the walls,a new kitchen floor, bringing it up to standardas it was creaking at the edges a bit. I’ve gone through about £5,000 so far, some

of that has also been on marketing, mostlydirect household to household leaflet drops.You could spend £5,000 on newspaper advertsbut it’s not necessarily worth it. Direct mail hasbeen the most responsive thing I’ve ever done;it’s more common for takeaway outlets to usethis method, but we’re seeing the same 5 percent uplift as they do if we carry out a largeleaflet drop, and that’s thanks to our cashassistance from Boost. It’s hard to survive in this trade, particularly in

a restaurant with just 29 covers. I try and be astax-efficient as possible, try to keep theoverheads as low as possible. Needless to say,you’ve got to do everything well, from serviceto food; you have to give the full package. Wegive out a card to customers asking how wouldyou improve the restaurant. The generalresponse is we wouldn’t change anything.There's an awful lot of positive feedback. The business environment is a challenge, but

despite this I hope to open another restaurantone day. n

12

Owner: Donald Mavor Founded: 2007 Based: Edinburgh, ScotlandType of business: Restaurant Challenge/opportunity: Refurbishment/marketing

Tex Mex


13

Small and medium-sized businesses arethe foundation of the UK economy. Yetthere are a great many healthy small

businesses that are struggling to get access tocapital to fulfil their growth plans. Finance options for small businesses in the UK

have for a long time been fairly limited. Inreality, the perception has been that the onlyviable option is to go to the high street banks,although many see this route as difficult too. Thankfully, the landscape has and is changing;

there are feasible alternatives which smallbusinesses should embrace as part of theirplans for kick starting growth. At Boost Capital we speak to many small

business owners who see real opportunitiesto grow, but are quite often faced withhundreds of hoops to jump through whenapplying for a high street loan, only to find

out they are declined.However, with new funding options

available, small businesses are starting tojump on their growth opportunities. Boost Capital is a direct funding provider and

has now financed hundreds of small businessesthat have been able to grow as a result. Theyhave come to Boost Capital for a variety ofreasons; remodelling or renovation, buyingstock at a discount, expansion or to buyequipment. How they use the funds is up tothem – after all they know best what works fortheir business.A Boost Capital small business loan can also

be funded in as little as five working days andcan fund anywhere between £3,000 to£500,000 meaning that business owners canaccelerate their growth plans quickly and geton with doing what they do best. n

13

Boost Capitalcommentary


Fulfil Your Growth Potential

Call 0800 138 9080Email: [email protected]: www.boostcapital.co.uk

fulfilling growth potential - boost capital · 2018. 5. 1. · much money as we had been in...

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