Tips for cooking up business success

On the 16th of November, the Prosecco and Gin Festival comes to Newcastle. It’s set to attract locals and tourists to sample artisan tipples produced across the North East and the rest of the UK. Food and drink events, the popularity of which is rising, are a prime opportunity for businesses to introduce products to new customers and build brand awareness.

Earlier this year, Eventbrite announced the number of festivals listed on its ticketing platform dedicated to food, gin, prosecco and beer has risen by more than 600 per cent since 2014.  However, attending one-off events such as food festivals requires upfront investment. For food and drink businesses, often at the start of their growth journey, the cost of additional staff, equipment and inventory can be challenging. 

Our latest Working Capital Index found that North East businesses had more than GBP65 billion tied up in excess working capital – which is the day-to-day cost of doing business and includes everything from stock and equipment to staff wages and unpaid invoices. Much of this is money that could be released and used to provide an injection of cash when firms need it most, including to pursue the opportunities presented by new events – such as the Prosecco and Gin Festival           Being aware of when to expect busy and quiet periods is the first step to ensure a healthy working capital position.

By planning well in advance, food and drink businesses can spread the initial outlay required to take advantage of an increasingly busy calendar of events over a longer period of time. The next challenge is to fully understand the pressure points in your firm’s cashflow cycle. That’s why we’ve worked side by side with businesses to develop a specialist working capital management tool that allows firms to evaluate their cash flow.

This provides businesses with an increased understanding of their financial picture and allows them to assess whether they will need to take steps to improve their cashflow before investing in growth opportunities. For food and drink businesses that sell directly to retailers, restaurants and bars, an important practical way to maintain a healthy cashflow is to invoice and collect debts on time. But this isn’t always possible.

Invoice finance can help here. It allows suppliers to release up to 90 per cent of the value of their invoice book, typically within 24 hours – a perfect option for wholesalers awaiting payment for a big order. Meanwhile, for businesses starting to target events for the first time, asset finance – loans that are secured against equipment being financed – is available to invest in new equipment needed, such as a stall or food truck.

With a number of food and drinks event on the horizon, there are great opportunities presented for food and drink businesses to take advantage of.

As well as offering our advice, we’re committed to lending up to GBP700m to North East companies this year, and we’ll be by the side of Newcastle’s businesses to help them cook up success. 

You may also like...