Viv Cudahy was a fashion buyer for Harrods with great taste, a great eye for trends and a lot of entrepreneurial spirit. After the birth of her daughters, she felt the time was right to start her own business.

In 2010, a friend of Viv’s in the US invested in bobble, a funky, environmentally friendly water bottle that is reusable and filters as you drink. What is different about bobble? Its patented design removes chlorine and organic contaminants from tap water, replicating the experience of drinking mineral water without the cost – environmental and financial – associated with plastic water bottles. Viv was interested in home innovation and decided to set up a business called Auteur, distributing the iconic bobble in the UK, after negotiating a contract. At the time, most banks were unsupportive after the 2008 financial crisis. It was hard at first, getting finance and taking the project off the ground, but she persevered and stayed the course, as she was sure the product was special and there was a market for it. In just a few years, bobble is now ranged in premium retailers, such as Harvey Nichols, Harrods, Selfridges, John Lewis and Waitrose as well as in the grocery and high street retail sectors. Auteur sells a variety of bobbles, as well as filters, a filter jug and serving carafe and accessories. Viv had a five-year plan and felt the company was going in the right direction, but that more could be done. She said: “As a managing director, I knew we needed a new strategy and to take stock, not to just run the business operationally.
We didn’t want to rely on just one product and wanted to really expand and invest in design, which is what we are about, as a company.” When she joined Business Growth Service, delivered by Oxford Innovation Services, she was assigned business coach, Rosemary Brown. “It was crucial for me that this was a credible service. The fact I met the coach at a trade fair and she had a background in retail was also really important.” Rosemary Brown, who started working with Viv and her senior team, said: “It was a very good fit, because of my experience in the sector. I was able to pick up on the issues quickly and we communicated well. They have taken the advice on board and have been active and positive.

“The main issue was it being a single product company, but we expanded the business model. It is very rewarding to see how successful Auteur has become.” Viv said Auteur valued Rosemary’s approach which was “reassuring but challenging at the same time and it was good to have deadlines”. The business development coaching helped Auteur look at the business differently, scale up and embrace innovation across the company: diversification with a new product range and into more segments (they are now in 2,500 stores in the UK and Ireland), new recruitment and new processes. Innovative brands and cutting edge design are crucial to Auteur and its vision. Auteur went on to win Excellence in Housewares 2015 award and other regional awards. Viv said: “I wanted to build the brand and secure the core business first and then we were able with support from our coach to build the team, adopt a more collaborative approach, invest in training, define what we are as a company: friendly, ambitious and individual united in our positive attitude.

“We are confident, not aggressive, contemporary not formal.” Auteur is looking to expand its brand offerings in the design and innovation-led products for the home. Having already added to its portfolio of brands in 2015 with the launch of That! innovation products and Rivsalt (a Himalayan salt rock with a wooden board and grater which is a centrepiece and a new way of adding salt to food) they are planning more brand launches. They had added to their portfolio new unusual and design-driven products, such as a kitchen knife and ice cream scoop that thaw without melting, an eco-friendly defrosting board, ice cream bowls that keep ice cream cold among other innovative items. Continuing on their growth journey, this Oxfordshire company is looking at internationalising the business and delivering design products for the home that are useful but stylish.

New as well as mature businesses are always seeking additional funding so as to grow, increase profits, acquire assets or to overcome a cash flow crunch.
Fortunately, the UK has a vibrant and advanced banking and investment climate which caters for nearly all types of funding that businesses require. The challenge is identifying the right funding provider and the right type of funding for the business.

Grant funding
Grants are normally awarded by governments and quasi-government bodies (like the EU) and also by
local authorities.
Grant funding is often the cheapest and preferred method of getting additional funds into a business. The biggest advantage of grants is that they are a cheap source of funding as the grant-giver does not expect a monetary return such as interest or dividends from the company that has been funded.
The grant-giver merely requires that the conditions of the grant are achieved and that the company provides reports showing the impact of the grants. In addition, the grant-giver may require an audit of the scheme or project or products that have been funded by the grant.
The major drawbacks for grants are two-fold:

  • The grants may increase the administrative burden on
    the company as they often come with stringent reporting requirements.
  • Grants are often difficult to get. Because the money is cheap, there is often lots of competition to get a grant allocation and the paperwork required for application can be onerous.

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The types of funding available to entrepreneurs include:
• Grant funding
• Debt funding
• Equity funding
• Self-funding (either in the form of equity or debt)

Debt funding
Debt funding is the most common source of business funding provided by banks, financial institutions as
well as by private individuals.
The providers of debt funding generally charge interest. The debt providers will often require security for the money they are advancing to the business.
The security will often be in the form of a bond over the property being financed such as a mortgage bond over a piece of real estate or a general notarial bond of plant and equipment. Some providers of loans will also require the directors or owners of the business to provide personal surety over the loans.
The main advantages of loan financing to a business are two-fold:

  • The interest that is charged on the loans is tax-deductible.
    This type of financing therefore can provide the shareholders
    with higher after-tax earnings.
  • The owners of the business do not have to give up some
    shareholding to 3rd parties.

The key disadvantage is that debt can choke and suffocate a business. Failure to pay the interest and capital repayment in accordance with the agreement could result in the business going into distress. The key assets of the business can be repossessed by the lenders and liquidated. The whole business can be taken over
by creditors after a liquidation process.

Grant funding
Grants are normally awarded by governments and quasi-government bodies (like the EU) and also by local authorities.
Grant funding is often the cheapest and preferred method of getting additional funds into a business. The biggest advantage of grants is that they are a cheap source of funding as the grant-giver does not expect a monetary return such as interest or dividends from the company that has been funded.
The grant-giver merely requires that the conditions of the grant are achieved and that the company provides reports showing the impact of the grants. In addition, the grant-giver may require an audit of the scheme or project or products that have been funded by the grant.
The major drawbacks for grants are two-fold:

  • The grants may increase the administrative burden on
    the company as they often come with stringent reporting requirements.
  • Grants are often difficult to get. Because the money is cheap, there is often lots of competition to get a grant allocation and
    the paperwork required for application can be onerous.

finance image

Debt funding
Debt funding is the most common source of business funding provided by banks, financial institutions as well as by private individuals.
The providers of debt funding generally charge interest. The debt providers will often require security for the money they are advancing to the business.
The security will often be in the form of a bond over the property being financed such as a mortgage bond over a piece of real estate or a general notarial bond of plant and equipment. Some providers of loans will also require the directors or owners of the business to provide personal surety over the loans.
The main advantages of loan financing to a business are two-fold:

  • The interest that is charged on the loans is tax-deductible.
    This type of financing therefore can provide the shareholders
    with higher after-tax earnings.
  • The owners of the business do not have to give up some
    shareholding to 3rd parties.

The key disadvantage is that debt can choke and suffocate a business. Failure to pay the interest and capital repayment in accordance with the agreement could result in the business going into distress. The key assets of the business can be repossessed by the lenders and liquidated. The whole business can be taken over by creditors after a liquidation process.

Funding for business
Equity
Equity financing is when existing shareholders or new investors increase the principal capital of the business.
Existing shareholders can refinance the business by either subscribing for new shares or they could use retained earnings as additional sources of business finance.
The existing shareholders could also invite outsiders to inject capital into the business by buying shares. Inviting new shareholders has
the advantage of bringing new people with possibly new and different perspectives. This could help the business grow in that
the original owners can now tap into a wider talent pool when making strategic decisions.
The obvious disadvantage of the bringing new shareholders into the business is that the influence of the original shareholders is diluted. The advantage of bringing new shareholders is that the talent pool increases and the business will most probably grow faster.
As the business grows, it also faces bigger challenges because its
sells more products/services, it gets more customers, its supplier
base increases, its employees increase and the sophistication of management processes such as accounting, tax, legal and governance increases substantially.

Self-funding
Self-funding is when the business itself funds its growth through reinvestment of profits.
This is the most common type of funding especially for small- and medium-sized businesses. Start-ups which are often not bankable projects often rely on the funding provided by the entrepreneur and by the friends and family of the entrepreneur.
When a new business starts the entrepreneur and the business are often one and the same entity. There is no legal identity for the business. Self-funding of the business is often the only solution.
The entrepreneur will often secure loans in his own name for the benefit of the business.

To find out more as to how OI Business Services can help you
access finance and funding that is right for your business
please contact us on:
01865 261 494