Thriving Against Odds: The Practical Tools Every SME Needs
Surviving and thriving in the business world is no small feat, especially when 95% of startups don’t make it past the initial years. The main reason for these failures? Finances.
Surviving and thriving in the business world is no small feat, especially when 95% of startups don’t make it past the initial years. The main reason for these failures? Finances. That’s why focusing on boosting financial resilience and maximising profits is key to positioning yourself for success and longevity.
Charles Wood, co-founder of Vitadrop, a pioneering hydration brand for Gen Z and Millennials, experienced rapid growth, hitting 2,500 national Coles, Woolworths and Coles Express storefronts in just 18 months. His key lesson: B2B SMEs can thrive by working smarter with available resources.The Vitadrop story proves that rethinking financial strategies, tapping into assets, and using working capital finance can genuinely transform your business. Boring? Maybe. But powerful? Absolutely!
Do More: The Vitadrop Approach
Vitadrop has had such a rapid growth trajectory – establishing itself as a fixture in major supermarket chains and chemists all around the country within just 18 months. Wood says it’s only been possible with practical financial strategies and the support of a flexible supply-chain finance facility, which enabled the businesses to unlock hundreds of thousands trapped in orders and put it into use.
Most entrepreneurs dream about their fledging startups making it big, but few actually see it come to fruition as quickly as the Vitadrop team did.
“We’ve had a massive scale up,” Wood says. “We had the Vitadrop brand incubated at our former agency four years ago, but then 18 months ago we jumped into business full-time. We saw hydration growing globally, and we wanted to get after it.”
That decision set off a chain reaction of scaling up. Today, you can find Vitadrop products in over 2,500 stores — from supermarket giants like Coles and Woolworths, to Coles ExpressTerry White pharmacies and even in pharmacy stores .
“We’ve launched 11 products and it’s been a crazy growth story so far.”
Win More: Becoming a Colesworthy staple with the right tools
Scaling up so aggressively, inevitably, comes with equally large working-capital requirements. So when Wood and his team looked closely at the numbers, they realised they were going to need some serious financial support on the trade side of their business.
“We got a supply chain finance facility with Fifo Capital, which allows us to purchase enough inventory to stock thousands of stores, even though our working capital isn’t at those levels,” Wood says.
This is key for a business like Vitadrop, which is hampered by much longer lead times than other fast-moving consumer goods businesses.
“We need to buy stock before we can sell it, and we need the finance facility because our lead times are quite long given our core range is manufactured in pharmaceutical facilities.. Even though we’re Australian made, that puts even more pressure on our working capital. So compared to say baked goods, which essentially needs to be made to order. We need to place an order that will take 16 weeks. That’s just to make the product. Then we need to put it into the supermarkets and they pay us on their own terms as well.”
With a long cash cycle, Wood needed a unique financial partner who not only understood the intricacies of their business, but who would allow them to grow quickly and take advantage of time-sensitive opportunities whenever they arose.
“Fifo Capital had the ultimate finance facility for our business,” Wood says.
Grow More: Plan for the worst, but be prepared for the best
While he knows that not every business will have the same growth trajectory or extensive lead times on products, Wood says it’s essential that SMEs and budding entrepreneurs plan ahead for two eventualities: the worst-case and best-case scenarios.
“When you’re an entrepreneur, you don’t quite know what’s going to happen in three to six months’ time,” he says. “So you need to run some scenarios of what would happen if your wildest dreams come true, and also what would happen if everything goes wrong.
“For us, we said yes to everything and we tried to pitch for everything. We didn’t actually think we were going to get it all, but we got it all and then some.”
Once you’ve done your planning, Wood says it’s then about making sure your cash flow is tight and accurate. You want to have a clear view of what your financials are like on a daily or weekly basis.
“That’s actually what will make you sleep better versus anything else you’re doing on the business.”
