How I...

Author:
Chris Quickfall
Business:
Invate
Published:
10/11/2008 11:14:00

I started to set up the company whilst I was still at uni, but when I graduated I had to take a job to support myself. So it was really long hours, all very tiring. It was supposed to be a six month placement but I actually quit two months early so I could concentrate on the business, as that was where my passion lay.

After quitting the job I had no money coming in, so I was living on credit cards. I was outlaying all this money but had no idea when it was going to come back. I became poorer than I was when I was a student which I didn’t think was possible. My business was the kind that needed a lot of investment at the start to get it off the ground and I had started completely from scratch.

All my friends from engineering got good, well paid jobs when they graduated. As they were buying TVRs I was thinking, I could afford to buy a few TVR’s with all of this debt.

Trying to set the business up was a bit like being a rabbit caught in the headlights. But that was partly because I vastly underestimated how much support there is out there. We managed to raise finance from the likes of Business Link and Project North East. Prince’s Trust supported us in the form of both loans and grants.

We used that money to go to a bank and say, we’ve got this much through government organisations, can you double it? It was the first time I’d ever negotiated with a bank, and I’d more or less gone in as a student and said, “Can I have some money for free?” After a while though we got the banks to put in some money on top of what we had already.

We used that money to go to another bank to do what’s known as invoice financing. We had some money, but we didn’t have enough to buy, sell and sit and wait for a month for somebody to pay us. So what we did was basically sell our credits to a bank, and they’d give 90% of it back immediately and 8.55% back once our customer paid. That allowed us to have enough working capital to support the business and enable it to grow. We could increase sales without being concerned that we’re going to run out of money in two weeks time. That was one reason that allowed us to grow the company so fast.