Evolution, Water and Lighting were in the midst of significant growing pains and were struggling with a lack of cash to fund future growth when they approached MGI. With our help they are now a vibrant and sustainable business with sales revenue more than doubling over the past two years.
As a fast growing pool supply business Evolution Water and Lighting has suffered its fair share of growing pains.
“18 months ago I had what I thought was a sustainable growing business with more customers than I could keep up with. But with more and more capital tied up in debtors and stock we didn’t have the cash to fund growth and expansion,” says owner Des Pacek.
“I began working with Grant from MGI to assess my financial position and that was a real eye opener. Far from being sustainable we were so strapped for cash we were at risk of losing it all.”
MGI worked with Des to undertake a detailed assessment of Evolution Water and Lighting’s finances. Using its traffic light report card system, MGI rates the financial performance of a business on a scale from a high of A+++ to a low of E—, highlighting potential problems that were impeding future growth and established quick wins to overcome these.
“Most importantly our discussions were focused on the future, not the past and what we needed get a better handle on to be able to fund our ongoing growth,” he says.
Securing funding for growth
One of the most crucial requirements was to secure an alternative funding solution.
“MGI reviewed our options and put us in contact with a finance provider who was able to help us with funding. That was a huge help.”
Meeting reporting requirements
Another challenge was that exceptional growth had meant that Des and his team hadn’t been able to keep their internal processes up to scratch.
There was no process to make sure debtors were followed up and financial reports weren’t being generated on a timely basis, meaning that decisions were being made on out-of-date data.
“MGI has been a great help in addressing both of these areas.
“They helped us get our stock take procedures up to scratch and they now have one of their bookkeeping staff working in our office two days a week. This has meant that we are now finally on top of our financial reporting,” he says.
Getting visibility on how each business was performing
One of the issues MGI identified in the early stages was the lack of granularity of financial information in order to see how each individual business division was performing.
“While we have three facets to our business (a supply division, a manufacturing division and a repairs division) I could only see how the business was travelling as a whole.
MGI put in place reporting systems for each of these three divisions so I now have a clear idea on exactly what is happening in every division,” says Des.
A promising future ahead
From a shaky start, Evolution Water and Lighting is now the fastest growing pool and spa equipment wholesaler, reseller, distributor and manufacturer in South East Queensland.
“We’re very appreciative of the assistance that MGI has been able to provide and see their continued involvement in our business as integral to us pursuing our ambitious growth strategy,” says Des.