Within a well known arboretum in southern England, several small private businesses had gathered themselves together in a gentle ‘co-operative’ comprising serious logging and milling, fencing, larger gardening contracts, tree-surgery, traditional furniture and countryside pottery.
The owner, a City Institution, was pleased to retain the asset and see the facility used, but wanted no deeper involvement. The individual businesses wanted to develop and expand but their unusual corporate circumstances meant they were not attractive to conventional bankers or investors.
Introduced to Mercantile by a helpful banker, our first task (after confirming the “Landlord’s” goodwill) was to discover whether or not this diversity of talents could be focused into a meaningful, single business suitable for investment and day-to-day trading. The challenge would be to capitalise on the “all for one and one for all” spirit, without falling prey to the petty jealousies of “my bit is worth more than yours” and so on.
The most effective course of action was to have each business valued independently, and then get the values agreed universally. This enabled the creation of a Limited Company comprising six equal shareholders each with different levels of unsecured loan account based on the valuation of their original businesses.
We worked in conjunction with a local accountant and the introducing banker, who was able to provide the relevant basic facilities for the new company. All that was missing was serious business administration and marketing.
Today there is a new Commercial Manager doing the Board’s bidding – with more than a few ideas of her own – and a positive balance sheet of over £3m. The board has increased to seven equal shareholders as a result of the introduction of an Angel Investor, who brought £400,000 with him.
The united company has moved forward in leaps and bounds. Second-stage investment is now needed for more milling space and machinery; increasing volumes of raw timber are being purchased; the fencing, contract gardening and tree-surgery operation has doubled in size; the traditionally crafted furniture is now appearing at the better Garden Centres; and the pottery is winning accolades at Chelsea and overseas.
In the course of twenty months a loose collective of ambitious business people has been transformed into a thriving, competitive and focused company.