Good things are happening in British business
Find out how some of our customers have evolved their businesses in innovative ways.
Read time: 5 mins | Added date: 26/10/2023
The Drinks Club went from a start-up in a shed to a full beverage solution.
Stuart Randall, founder and Managing Director of The Drinks Club, started out selling a single premium rum line from a shed, but it quickly became clear that it was wider product portfolios that really opened doors.
But wider portfolios need a good level of product availability, and that’s cash flow heavy. To ensure reliable stock levels, Stuart used Lloyds Bank’s Invoice Finance solution.
“As a new business in an industry with significant entry barriers, one of the only things you can bring to the table is a level of reliability and service,” says Stuart. “That’s what sets you apart. The cash flow that Lloyds Bank provided was key from the outset.”
Invoice Finance is a solution that lets businesses borrow against their accounts receivable to generate cash quickly. “It’s a great option for businesses that are starting out, looking to grow or that don’t have access to assets they can borrow against,” explains Lisa Nicholson, Stuart’s Relationship Manager at Lloyds Bank.
“In an industry that’s so cash flow heavy, we sit in a part of the chain that’s cash flow negative,” says Stuart. “Customers expect extended terms, but suppliers’ terms are tight.
“It would’ve been almost impossible for us to launch the company without Lloyds Bank’s support, and it would’ve been equally difficult to grow the business without the Invoice Finance solution.”
The Drinks Club initially started out with an Invoice Factoring solution. This offers support to manage a business’ sales ledger and credit control processes alongside funding. As the company grew, it moved to an Invoice Discounting solution. This allowed Stuart to take control of the company’s credit processes while securing cash against a growing debtor book.
It was all part of Stuart’s plan to streamline the company’s processes and to create efficiencies. Stuart’s family background gave him a strong work ethic and a hunger for success. But it also gave him a deep insight into the wholesale business and its challenges and opportunities. Stuart set out to do things differently.
Operating a simple business model, and with Lloyds Bank’s support freeing up funds to invest in systems development and automating processes, he’s achieved that goal. As a result, The Drinks Club operates with half the industry standard headcount per 1 million sales.
“We set out to automate as much as we possibly could, working with tech specialists to differentiate us from the legacy systems that hinder many of our competitors,” says Stuart.
“It means we can operate with as few as two admin staff if needed, then have sales staff focused on client relationships rather than paperwork, and maintain responsive stock levels, which is more efficient for us and our customers.”
Lloyds Bank’s Invoice Finance solution has also helped Stuart to invest in the future, and in sustainability.
“Because we aren’t living hand to mouth, we can reinvest in the business, and it’s enabled us to become quite progressive as a company.” he says.
Most recently, that’s seen The Drinks Club procure its first electric vehicle – an 18-tonne truck, and potentially an industry first. In the past, the weight of the products the industry distributes has been an issue when considering a switch to electric. The size and mass of the battery required to propel a vehicle significantly reduced its payload and therefore logistical viability. But, with larger electric trucks coming to market, offering far higher capacity, Stuart spotted an opportunity.
“We were seeing demand from clients to show how we were going to reduce our carbon footprint,” he says. “This makes a big statement and shows that we’re prepared to invest in sustainability. Lloyds Bank’s support has been vital in helping us to pursue that vision.”
As Stuart looks to the future, he’s focused on further growth, with plans to grow turnover and “become one of the most respected names in wholesale.” Key to that will be continuing to drive efficiencies and maintain his simple business model. “Having Lloyds Bank’s support has been important to that, enabling me to keep almost my entire business in an industry that’s dominated by PLCs.”
Chris Furnell, of Lloyds Bank’s Invoice Finance Product team, says: “Stuart’s success in launching and growing The Drinks Club is incredible, and I think it’s fair to say that the Invoice Finance solution we’ve provided has been a fundamental part of that. It offers flexible funding that really supports growth.”
Stuart agrees: “We’ve banked with Lloyds Bank from the start because they felt very much like a safe pair of hands. They’ve given us access to cash flow and they’ve monitored and watched us grow. Their trust in us, and our ability to trust in them, continues to give us confidence as we target future growth.”
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