Debt Financing Tips with Paul Sherratt

WEBVTT

NOTE
This file was generated by Descript

00:00:05.023 --> 00:00:09.257
Welcome back to our bonus episode
for the Finance Focus podcast.

00:00:09.257 --> 00:00:15.032
Today we have Paul with us from
gloveglu he's very kindly agreed to

00:00:15.087 --> 00:00:17.457
share some of his top tips under ten.

00:00:17.750 --> 00:00:21.458
You'll catch a feature episode on
your podcast platform and we have

00:00:21.458 --> 00:00:25.158
a deep dive into Paul's fascinating
and fast growing business, gloveglu.

00:00:25.558 --> 00:00:27.058
Paul, welcome back.

00:00:27.150 --> 00:00:31.620
What would be your number one top
tip to starting a retail brand?

00:00:31.843 --> 00:00:36.481
Number one top tip I would suggest is,
pull together your business plan and

00:00:36.481 --> 00:00:39.671
I'm not big on a detailed business plan.

00:00:39.671 --> 00:00:41.751
But I think fundamentally,
where do you want to be?

00:00:42.331 --> 00:00:42.991
How do you get there?

00:00:42.991 --> 00:00:43.891
It's as simple as that.

00:00:43.967 --> 00:00:46.904
Putting the basics in place
for that is number one,

00:00:47.069 --> 00:00:49.979
I always say, if it doesn't work
on the back of an envelope, then

00:00:50.429 --> 00:00:53.009
no matter how much detail you're
going to go into, it's not going

00:00:53.009 --> 00:00:55.089
to work, on a detailed spreadsheet.

00:00:55.089 --> 00:00:57.759
One of the things you were talking
about in the longer episode was

00:00:57.759 --> 00:01:02.059
around, I think you called it a
dashboard where you had a tech stack

00:01:02.059 --> 00:01:05.869
that gave you all the information
that you needed to run the business.

00:01:06.416 --> 00:01:09.926
One of the challenges with that
is trying to decide exactly what

00:01:09.926 --> 00:01:11.336
it is you want on your dashboard.

00:01:11.366 --> 00:01:14.216
You know, there's so many
different things you can measure.

00:01:14.876 --> 00:01:16.306
Always want to know what my revenues are.

00:01:16.666 --> 00:01:18.766
Which is easy from a
dashboard point of view.

00:01:18.956 --> 00:01:22.196
Always want to know what the bottom
line is, which is harder because, you

00:01:22.196 --> 00:01:24.736
know, cost of goods aren't dropping,
they're dropping in at different

00:01:24.736 --> 00:01:25.906
stages and so on and so forth.

00:01:25.906 --> 00:01:28.605
So, then I think for me it's
having the ability to look at

00:01:29.235 --> 00:01:32.085
those revenue numbers by channel.

00:01:32.115 --> 00:01:34.155
B2C, it's easy, it's a Shopify dashboard.

00:01:34.195 --> 00:01:37.822
B2B, through Cin7, through
our CRM and Amazon is, again,

00:01:37.822 --> 00:01:38.812
it's an Amazon dashboard.

00:01:38.812 --> 00:01:41.002
It's either Amazon direct or
through Seller Board that we use.

00:01:41.002 --> 00:01:43.362
So relatively easy to
understand those numbers.

00:01:43.362 --> 00:01:48.182
We've just, moved over to Float as a cash
flow tool, and one of the nice things

00:01:48.182 --> 00:01:50.942
within Float is the scenario setting.

00:01:50.942 --> 00:01:56.292
So you have the ability to go, okay,
for example, if one of our major

00:01:56.292 --> 00:01:59.472
retailers, I'm thinking that this year
they're going to treble their business.

00:01:59.772 --> 00:02:00.072
Okay?

00:02:00.072 --> 00:02:01.722
What does that mean from a
production point of view?

00:02:01.722 --> 00:02:02.772
What does that mean from a cashflow?

00:02:03.132 --> 00:02:03.972
Okay, what does that mean?

00:02:03.972 --> 00:02:05.172
Do we need more staff?

00:02:05.622 --> 00:02:07.182
Do we need a new bottling plant?

00:02:07.242 --> 00:02:07.992
Whatever, whatever.

00:02:08.022 --> 00:02:14.082
So I think the scenario model within
float is great because that then chucks

00:02:14.082 --> 00:02:18.492
out the other end A whether we can
afford it from our existing cash flow.

00:02:18.492 --> 00:02:21.342
B, whether we need to take
on an internal investment and

00:02:21.342 --> 00:02:22.902
we can play around with that.

00:02:22.902 --> 00:02:26.412
So that's going to be a super useful
tool in terms of looking forward.

00:02:26.482 --> 00:02:30.352
What have been the biggest learnings from
the fundraising that you've done to get

00:02:30.352 --> 00:02:31.672
your business to grow to where it is?

00:02:32.057 --> 00:02:34.037
Probably you need more than you think.

00:02:34.234 --> 00:02:38.097
So we've had occasions where I
believe we need a particular number,

00:02:38.097 --> 00:02:41.687
and again, this goes back to this
scenario planning and forecasting.

00:02:41.687 --> 00:02:44.477
You think you need a particular number,
nine times out of ten actually that

00:02:44.477 --> 00:02:49.217
number is, ends up being slightly
more and therefore you then in the

00:02:49.217 --> 00:02:53.157
situation going back, or we need to
raise something else, which is not great

00:02:53.210 --> 00:02:56.270
when you're taking on debt, because
more often than not, it's much better

00:02:56.270 --> 00:03:00.020
to take on that slightly bigger number
and manage it as opposed to taking on

00:03:00.020 --> 00:03:02.350
three or four different smaller Mm-hmm.

00:03:02.360 --> 00:03:02.900
ones.

00:03:02.920 --> 00:03:05.110
So I think there's scenario
planning where then there's also

00:03:05.140 --> 00:03:06.730
upside and downside, isn't there?

00:03:06.940 --> 00:03:11.315
Finding a baseline there you can
feel reasonably confident that

00:03:12.055 --> 00:03:15.853
that's likely to be the output or the
requirement from a cash perspective.

00:03:16.488 --> 00:03:22.878
And look at the Ts and Cs, look at
how you are paying that debt back.

00:03:22.998 --> 00:03:26.258
Look at the interest that going
to be paying on that debt.

00:03:26.623 --> 00:03:27.853
Can you afford to pay it back?

00:03:28.133 --> 00:03:32.563
It's clearly an obvious one, you know,
how frequently are you pulling cash out

00:03:32.563 --> 00:03:35.013
of the business to push back to that debt?

00:03:35.013 --> 00:03:38.313
And I think we've caught ourselves in
the past that, we've got to a point

00:03:38.883 --> 00:03:42.798
what there may be some deadlines and
we past those deadlines, and suddenly

00:03:42.798 --> 00:03:46.278
everything ratchets up quite substantially
from an interest point of view.

00:03:47.148 --> 00:03:50.838
Which maybe we hadn't anticipated that, we
hadn't planned it, we hadn't thought about

00:03:50.838 --> 00:03:55.846
that and suddenly you are then playing
seriously, playing catch in a way that

00:03:55.846 --> 00:03:58.866
you shouldn't be if you'd either taken out
the right product in the first place or

00:03:58.866 --> 00:04:05.136
recognize what as and when those points
will come where it gets super nasty.

00:04:05.500 --> 00:04:07.230
It's about getting the
right product, isn't it?

00:04:07.410 --> 00:04:09.870
And uh, it's not always easy.

00:04:10.460 --> 00:04:11.900
Maybe sometimes you don't have any choice.

00:04:11.968 --> 00:04:14.614
So, you know, at the end of the
day when we, when you're growing

00:04:14.614 --> 00:04:19.706
as rapidly as we've grown, you
pedaling bloody hard and quickly.

00:04:19.947 --> 00:04:24.006
As an entrepreneur, you just want to
keep pedalling hard and pedalling quickly

00:04:24.140 --> 00:04:27.698
and therefore sometimes if there's only
one solution there that's going to allow

00:04:27.698 --> 00:04:31.818
you to pedal hard and quickly, then to
some extent, you're forced to take that.

00:04:32.313 --> 00:04:36.063
But again, the bigger you
get, the easier that gets.

00:04:36.063 --> 00:04:38.403
Suddenly you've got choice
of more products and more.

00:04:38.403 --> 00:04:42.813
It just, again, it's this whole
cycle that you go through.

00:04:43.443 --> 00:04:47.493
But being in the communities that
I'm in, again, I get the reassurance

00:04:47.493 --> 00:04:50.583
that, you know, people around me
going, oh yeah, we've been there.

00:04:50.613 --> 00:04:51.393
Oh yeah, we did.

00:04:51.393 --> 00:04:52.353
Oh, that was two years.

00:04:52.353 --> 00:04:53.613
Oh, don't worry, you'll get through that.

00:04:53.613 --> 00:04:57.453
So if, you know, if you know you
are not the only person having those

00:04:57.453 --> 00:04:59.283
challenges, it's very comforting.

00:04:59.965 --> 00:05:00.125
Excellent.

00:05:00.125 --> 00:05:00.700
Thank you very much.

00:05:00.700 --> 00:05:02.420
That wraps up our Tips under Ten.

00:05:02.490 --> 00:05:07.020
Once again, all our contact details and
details for Paul will be on our show notes

00:05:07.020 --> 00:05:09.150
on the platform of your podcast choice.

00:05:09.810 --> 00:05:11.250
Thank you much, Tracy, and thank you Paul.

00:05:11.760 --> 00:05:12.450
Thank you very much.

00:05:12.450 --> 00:05:13.130
Thank you.