On inspection, it transpired they had £10,000 worth of tools waiting to be repaired.
Additionally, with most of their customer base being based in the trades e.g. construction, plumbers, electricians, they had accrued over £40,000 worth of trade debt.
That’s a total of £50,000, or 2.5 times their normal monthly revenues – basically, cash sat on the table, waiting to be collected.
They told me about another product on the market, ‘garden studios’, which sold for £15,000 each, made 50% more profit, and took a third of the time to build.
When I challenged them on why they were selling sheds and not garden studios, they said ‘we bought a shed business so we’ve always sold sheds!’ – in essence, they were stuck in their early business model mindset.
Now, their sheds sell for 25k each, and they sell two or more of this product a month – and, as a bonus, as they’ve built up their own expertise they have gone on to halve the time it takes to build the garden studios making further efficiencies.