Accelerating the scale-up process
Arriving at the optimum point to accelerate scale-up activities is different for every business. For HiB that time came five years ago after 20 years of successfully growing the company. HiB had carved out a niche supplying high-end designer cabinets and mirrors to independent retailers in the UK and the Middle East.
“We have created a niche and have become the market leader,” explains managing director Robert Ginsberg. “Sometimes, you have to create a market to scale.”
HiB sells products that had been traditionally viewed as accessories that people buy last in their bathroom upgrades. “But customers are now choosing a bathroom cabinet or mirror with LED lighting, integrated bluetooth speakers and charging points as a key item when designing a bathroom experience,” says Ginsberg.
Recording stellar revenue growth
Over the last five years, HiB has grown its revenues from £8-9m before and after the global financial crisis to £21m in 2017.
Ginsberg says the company worked with its long-standing relationship lender Lloyds Bank to roll-out a growth-focused invoice factoring programme, by raising working capital against its receivables. Its regular sales and purchasing patterns supported this finance option.
“We had a cash flow struggle between needing the stock to support growth and having cash to support this,” explains Ginsberg. This strategy helped HiB grow its revenue from the £8m level to around £15m. “It provided the boost and energy that we needed for three years until the increased sales generated cash,” he adds.
Having just two relationship managers at Lloyds Bank since 1990, Ginsberg says HiB benefited from this “consistency and stability” and didn’t really need to look around for other finance options.
Human capital and relationships drive success
Many companies have to increase their marketing budgets to win valuable market share, but Ginsberg says “we achieved growth because of strong relationships with our customers”.
Human capital is a very important area that has helped us grow and scale up, he explains. “Our area sales managers have long-term relationships with our customers and that has created trust in our company.”
Creating a consistent long-term team
Ginsberg says that trust has been created by HiB’s long-serving board of directors, many of whom have been with the company for 20 years or more.
In July 2017, HIB appointed operations and logistics directors at the company’s main base – an 85,000 square-feet distribution centre in Tamworth in the Midlands – both directors had started 20 years ago as warehouse staff.
Crucially, the company values its staff and their wellbeing.
If you look after your employees, they’ll look after you.
Robert Ginsberg, HiB
One of HiB’s core values is “caring for our community”, which includes caring for other team members and the leadership setting good examples for the team. “Being truly considerate and caring about the team can generate good loyalty,” says Ginsberg.
Delivering the 2030 vision
Planning years ahead can sometimes involve elements of guesswork. But Ginsberg says that communicating a growth message is important for scale-ups.
HiB has an eye on international expansion with a major retailer in Europe and has expanded its domestic reach by moving into the residential real estate developer and specifier market.