Stafford Franchise Cleans Up Despite Tough Economy
Business start-up secures significant growth A Stafford businessman who set up a franchise just before the recession hit six years ago is on track to reach a quarter of a million pound turnover, thanks to a funding arrangement that enabled him to effectively manage cash flow.
Chris Lunn, 47, had worked in sales for 20 years but had always wanted to run his own business. Lunn said: “I enjoyed a successful career in sales but six years ago I decided that if I wanted to pursue my ambition of being my own boss, it was now or never.”
After reviewing several options Lunn decided to open a franchise as he would be able to benefit from operating a proven business model and selling a high-quality, existing product, as well as access to wider training and support from the parent company.
Lunn opened Chemex Stafford in late 2007 providing industrial cleaning and hygiene products to businesses in Stoke-on-Trent, Stafford, Shropshire and Wolverhampton, including hotels, restaurants, schools, colleges and football clubs.
He commented: “I chose to open a Chemex franchise because the business model suited my background in sales and I could see they offer a truly personalised service to customers. I was also looking for a recession-proof business model and Chemex proved to be just that.”
In 2008, his first full year of trading, Chris achieved a turnover of just under £60,000 which he has managed to triple over the past five years. He also employs two members of staff that help with his administration and marketing.
To support the rapid growth of his business Chris required a flexible funding option that would enable him to release the value of his invoices to ensure he had the capital to purchase enough stock for new customers.
Lunn continued: “Managing cash flow can be really tricky for any new business, particularly when trading conditions are tough and payment terms start to move from 30 to 60 or even 90 days.
“I switched my funding facility from Lloyds TSB to Bibby Financial Services, because they offer a much more personal service and I don’t have to spend as much of my own time managing cash flow – which is really important when you’re the only person running the business.”
Lunn uses Bibby Financial Services’ Forward Finance, which offers 24 hour account access, allowing businesses to review their cash flow any time it suits them. The facility enables unpaid invoices to be uploaded to Bibby Financial Services’ online service, following which, up to 90 per cent of the invoice value is made available – often the same day.
Lunn continued: “Forward Finance allows me to retain control of my customer relationships, and provides me with funding as and when I need it. It’s great that there’s just one simple fee as I know exactly how much I’m paying. Also, the fees are much lower with Bibby Financial Services than they were with Lloyds TSB.”
Edward Winterton, Commercial Director at Bibby Financial Services, said: “Firms like this that employ nine or fewer employees account for 96 per cent of all UK businesses, which shows just how important they are to the economy.
“The multinationals may dominate the headlines but it’s firms like Chemex Stafford that can be most affected when payment terms begin to stretch.
“Chris Lunn is proof that you can start a business at any stage during the economic cycle and make a success of it.
“However, whether you choose to go down the franchising route or set up on your own, it’s vital that you seek the funding and support that suits the specific needs of your business.
“Invoice finance is a flexible funding arrangement that grows with the business and ensures your time is spent developing the business, not worrying about cash flow.”