Mark Bramall of Dyke Yaxley has recently assisted a client to avert a potential cashflow crisis by projecting forward to estimate the business’s likely requirement for working capital as they approached their busiest trading time of year
The business, which sells high-end luxury food products by mail order, had been growing rapidly in recent years, but was finding its reliance on the busy Christmas market a continuing problem. Half of their annual turnover was concentrated into the last couple of months of the year, but the cost of producing and holding stock throughout the year always caused problems. In previous years, this had resulted in the directors finding it necessary to inject personal funds to cover the shortfall.
However this year, Dyke Yaxley suggested the board prepared financial projections in the quieter summer months, which would enable them to calculate the likely need for finance, and approach potential banks to fund this working capital requirement, before a crisis developed later in the year.
Mark Bramall assisted in the preparation and presentation of this business plan, and introduced several of his banking contacts to the company. The Shrewsbury office of Barclays Bank understood the business model, and offered an overdraft facility of £200k, which the client was delighted with. The company is now ready for the Christmas rush, but is also concentrating on developing its product lines into other related high end goods, which have a steadier demand throughout the year.
