Within a well known arboretum in southern England,

several small private businesses had gathered themselves together in a gentle ‘co-operative’ comprising serious logging and milling, fencing, larger gardening contracts, tree-surgery, traditional furniture and countryside pottery.

The owner, a City Institution, was pleased to retain the asset and see the facility used, but wanted no deeper involvement. The individual businesses wanted to develop and expand but their unusual corporate circumstances meant they were not attractive to conventional bankers or investors.

Introduced to Mercantile by a flairful banker, our first task (after confirming the “Landlord’s” goodwill) was to discover whether or not this diversity of talents could be focused into a meaningful, single business suitable for investment and day-to-day trading.

The challenge would be to capitalise on the “all for one and one for all” spirit, without falling prey to the petty jealousies of “my bit is worth more than yours” and so on.

The most effective course of action was to have each business valued independently, and then get the values agreed universally. This enabled the creation of a Limited Company comprising six equal shareholders each with different levels of unsecured loan account based on the valuation of the original businesses. We worked in conjunction with an enthusiastic local accountant and the introducing banker, who was able to provide the relevant basic facilities for the new company.

The milling division had some spare capacity, so there was no urgent need for extra investment in plant or machinery, and plenty of good quality local people were available to staff and support the expansion of the whole concept. All that was missing was serious business administration and marketing.

Today there is a bought-in Commercial Manager doing the Board’s bidding – with more than a few ideas of her own – and a positive balance sheet of over £3m and rising. The board has increased to seven equal shareholders as a result of the introduction of an Angel Investor, who brought £400,000 with him.

The united company has moved forward in leaps and bounds. Second-stage investment is now needed for more milling space and machinery; increasing volumes of raw timber are being purchased as home-grown logging no longer provides sufficient; the fencing, contract gardening and tree-surgery operation has doubled in size; the traditionally crafted furniture is now appearing at the better Garden Centres; and the pottery is winning accolades at the Chelsea Flower Show and overseas. In the course of twenty months a loose collective of ambitious business people was transformed into a thriving, competitive and focused company.

If your business has realistic potential, The Mercantile Group can provide the support that you need to succeed and turn ambition into reality.

Contact Andrew Hawkins or one of our Regional Directors on
+44 (0) 1480 830 494
for a free confidential discussion of your circumstances.

This essential first step consists of a detailed assessment of the past history, current circumstances and future prospects of the business, viewed from our objective position.

We hold discussions with all the shareholders/directors, other senior personnel and anyone else who might make a valid contribution. All possible options, including personal objectives, will be identified, debated with the stakeholders and actively considered prior to us proposing our recommendations.

It is important to understand that this is far from a ‘tick-box’ exercise and is an essential part of the process that cannot be side-lined or avoided, as it forms the basis for all future activity and also provides a valuable snapshot of the business.

The Appraisal process gives you an objective view of every aspect of your business and typically lasts four to six weeks, although shorter timescales can sometimes be accommodated when necessary. The resulting presentation is a valuable document in its own right, containing specific recommendations to achieve your objectives. More importantly Appraisal prepares for future business planning and restructuring activity and sees the beginning of objective opinions which will form the basis for future presentations to potential lenders and investors.