Craft beer devotee Paul Kruzycki has what many would consider a dream job. He runs a profitable and growing clicks and mortar business sourcing and distributing craft beer.
In 2009 Kruzycki realised there was a wealth of fantastic UK-produced beer and wanted to make it easier for people to get hold of it by setting up as a mail order supplier.
The former building surveyor attributes this impulse to his entrepreneurial streak, but the growth of the business is also testimony to his resourcefulness. Ales by Mail began life with an £800 investment in what he describes now as a rudimentary website plus 48 bottles of beer in a warehouse.
Getting the business off the ground also required considerable powers of persuasion: talking a magistrate into issuing a license in the first place and talking couriers into the idea of taking on liquid deliveries in glass bottles.
Ales by Mail reached a milestone earlier this year when Amazon, which had been using the company as its marketplace vendor for craft beer, announced that it wanted to grow revenue from this segment to £500K and almost double the number of product lines it took from the company to 500.
For Ales by Mail, an Amazon marketplace vendor for only six months, the announcement was an astonishing one. But it left the company with a significant challenge: how to fund the growth. ‘It represented a massive potential uplift in our turnover, but, when the dust settled, we realised it was going to be a tough one,’ says Kruzycki.
Businesses that have established a customer base and a pipeline of orders have something in their favour – an often-overlooked ace in the hole – in the form of the trading potential of their invoices. For expanding businesses, realising the value of those invoices promptly and securely provides a viable source of growth capital.
While it had relationships with myriad breweries, Ales by Mail needed to pay them regularly and, for the most part, on 30-day terms. Facing much longer payment terms from Amazon, Paul realised his high growth business had a potential cashflow problem.
Conversations with suppliers established that there was little or no room for manoeuvre, but one supplier suggested MarketInvoice, at which point things began to move very fast, he says. Within days, the company was uploading invoices and more importantly accessing funds. ‘MarketInvoice was very, very quick and very efficient. There were hoops to be jumped through, but it is a great comfort to be able to manage our cashflow in this way.’
Being able to live up to Amazon’s expectations has meant continued growth for Ales by Mail. This year, growth over the course of quarter one was 88% higher compared to the same quarter in the previous year. Quarter two growth for 2015 is 65% up on last year. Not bad for a business that started with 48 bottles.