Business Update – Growth-a-plenty

This is a little different than what I usually post. Unfortunately, I can’t include exact figures as it is confidential information. But what I can do is use percent figures and you can figure out the rest!

In Australia our tax year is starting July and ending last day of June. Therefore, we are coming up to an end of financial year.

In February of 2018 I decided on a job change. I was earning a decent wage at the Local Council but didn’t see a lot of growth in that role and it was a very stressful job. Mostly the people I worked with and for.
I decided a change was a better idea. The money I saved started my Portfolio.

I decided to come “home” and work with my dad on a business that he has been running since 1999 but had recently started to take off. Dad always says he started the business for beer and pizza money, which I find particularly funny because he doesn’t drink beer, but that’s besides the point.

In late 2017, we were approached by a large pet retailer in Australia (140+ stores) to sell our product in their stores. After much discussion we decided we would sell it to a wholesaler who holds stock for them and then sells in their stores, confusing I know. But regardless we are now selling to a wholesaler who sells to 700+ pet stores on the Eastern States of Australia. WOW!

Our business revenue has grown from somewhat respectable to starting to making a lot of money. This FY alone (our sales have been completed), have increased by 59.5% in a year. That is great. The business has two full time employees (myself and my dad) and one casual worker who helps us. He works maybe 10-15 hours a week. And the best part is, the business makes money on top of all these wages and manufacturing costs.

I’ve calculated a rough EBITDA for our business and we are currently around 17.85% margin. I would like to increase this closer to 20% in the next FY through machine upgrades, more efficient work routines and better time management. I believe this will allow a nice profit margin at the end of the year.

One major reason I want to grow this business and have it expand, is that in the end once my parents pass on (hopefully many, many years away) I will become a third partner in ownership of this business (two other siblings are the other partners). Growing the business makes sense, a great accomplishment but it will also help me in the future if this becomes a money machine.

End Of 2018/19 Financial Year Stats
Revenue Increase – 59.5%
Net Profit Increase – 61.5%
EBITDA Margin – 17.85%

Goals for 2019/20 Financial Year
Revenue Increase – 30%
Net Profit Increase – 30%
EBITDA Margin – 20.00%

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4 thoughts on “Business Update – Growth-a-plenty

  1. Really good news BHL, that’s exciting stuff. Hope it keeps going well over the many years ahead.

    One thing I thought of – Is essentially all of your product going to this one wholesaler? It could be an idea to build other relationships so you’re not too reliant on that one customer for the rest of the business’ life?

    Mr DDU

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