An interesting article in the DT about Halstock Cabinet Makers whose average order is £100,000 and has sales of £2.5million with a staff of 32.
Halstock would make a complex Equity Fingerprint, the business plan resource, as it was created in 2001 by a merger of three small kitchen design companies. Richard Miller (former army officer and city slicker) bought a majority share in the firm in 2005 and only co-owner and operations director Roger Evans remains from the original founders or bosses. It is not clear how much Miller paid for his stake but presumable Halstock was in a bit of a mess as he is quoted as saying “I didn’t put any money into the business. I wanted us to trade out of a hole. If I had put in capital it wouldn’t have shown where the weaknesses were.” It turned out these were in managing the expectations of the customers who I guess were allowed to keep changing their minds without charge.
Good lessons for the Cambridge Cluster and all enterpreneurs. Halstock do have a fancy website – very, very upmarket!
Hats off to Simon who says: “My aim of course is not just to make other people rich but to share in and contribute to their success. My philosophy is therefore to play a significant part in the business, not just to provide funding, and stick with it until it is up and running. It’s horribly risky of course because it means you don’t have the time to do much else, and if it doesn’t work you are older, wiser but poorer. But it seems to me more likely to succeed than angel investing at arm’s length. It’s like betting at Newmarket to win on one race, rather than each way on all the races. But you need to breed the horse, train it and ride it too!
This seems to be working with Quotient and Lysanda, but I need one or two more to be sure of a minimum outcome. Talking of which, I have found some promising technology in the Engineering Lab which I am casting my eye over.”
Third time lucky we hope but I guess this time the valuations will be high in the early stages – will I be invited to the party?
Image via WikipediaBabylicious provides healthy food for babies and kids all in special size containers. It saves the parents all the cooking and preparation time which used to bring the family together – now just microwave!
Production is outsourced with the only problem being to make sure the recipes scale from the home to 200 kilo batch production. Routes to market are via Waitrose and Boots.
Sally Preston started the business with family funds of £75,000 and two years later she raised new money from private investor. She says that she took no pay for the first three years and says that she is comfortable with her shareholding.
It is similar to Innocent drinks but they started with a team of three Cambridge graduates and a £250k investment which left four equal shareholders. Innocent also sub-contracts all the manufacture and concentrates on the marketing and selling but the Innocent drinks appeal to a much larger market and not cash-strapped young families.
Babylicious seems to have the same problem as Cobra Beer – working on fine margins in competitive markets.
Equity Fingerprint, the business plan resource, shows that multiple founders with multiple rounds of resources (people and cash) is an easier way to start a business than the lone founder.
One intriguing part of the Babylicious story is that Preston had to spend £34,000 to enforce her trademark as someone tried the equivalent of cybersquatting. It is not only the cash but so much time from a lone founder. Is Babylicious such a good name?
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