Sector: Food and Beverage – Hand roasted coffee shops.
Challenge: Raising cash to grow and differentiate in a competitive market that the banks and accountants did not understand.
In 2017 Leonardo da Vinci’s Salvator Mundi sold for $450m. It’s the most expensive painting ever. You may feel it’s somewhat overpriced, but in the rarified world of art, if someone thinks a piece is worth a certain amount, then that can quickly become its price tag. The oil, canvas and frame may only be worth a small amount, but the rarity of the piece, and the unique talent that went into creating it, can see the value of a painting soar into the stratosphere.
So what about your business? You may not have a da Vinci in the boardroom, but you could be in a strong position. Sales might be good Your team could be working well. But what if others don’t quite see it that way? What if they have a blind spot to your true value? That’s what happened in the case of Alchemy Coffee.
Alchemy was caught in a trap. Banks and investors didn’t understand the coffee sector or their business model. They kept under-valuing their assets. This had a knock-on effect. Because they didn’t appreciate the real value of the assets, they refused to allow them to borrow which in turn meant Alchemy couldn’t make the necessary investments to grow.
It was an incredibly frustrating time for them. They knew they had a great product, and happy customers but couldn’t convince the lenders of their true worth. As a result, their growth was compromised.
BGI looked at Alchemy’s vision and delved deep into their business model. They discovered that their hundred-year-old German coffee roasters had been written-down on the company’s books by the banks when they were actually of great value. From here we developed a clear and articulate strategy, one that could be bought into by the team, and implemented.
Alchemy was then able to engage their accountant with properly valued assets. This, in turn, meant they could have a different conversation with the banks. One from a position of strength.
BGI also gave them clear structure across all of Alchemy’s marketing, sales, operations, finance and talent. That helped them develop a way of working that focused on the right things at the right times, and not get blindsided.
The BGI Effect.
Alchemy got the bank on side and was given access to funds. They then grew their roasting capabilities to service increased demands. They then bought another business, strategically developed a group of companies and brands, and their revenues doubled.
They’re now strong enough to acquire more companies. They’re a business that runs as ‘investment ready’, knowing they can survive the most stringent due diligence.
In turn, the owner, Joe O Hara, was freed up to travel deep into the coffee growing regions to ensure he found the best farmers, thereby producing the finest coffee to roast and serve in his shops.
So what is the true value of your business, and more importantly, how much more value can you add to it? BGI has partnered with Value Builder, a Canadian company, with a proven track record of helping companies grow. They’ve devised a short questionnaire that can unearth not just the value of your business, but your value potential. If you’d like to find your score here.