Kayak Manufacturing Company Working Capital

October 10, 2017

by a searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School in Philadelphia, PA, USA

Hi Everyone,

I'm working on helping a kayak manufacturing company raise some capital and I am going to help them restructure. The Company does about $1.3 million in revenue and has an average gross profit margin of 56%. They are roughly at break even and I'm obviously working on figuring out where I can cut some SG&A costs.

As we go into next year they have made some product innovations and they are expecting $2.0 million in revenue and a 20% EBITDA margin. The business is very under managed and with the right focus I think we can create some great growth opportunities.

We are looking for about $500,000 in working capital to help them get current on payables and provide some growth capital. It could be some type of debt, equity, or debt with warrants. I'm looking for any banks that you think might be interested or even any potential investors you may know of. It's not a large check size, and their books are not great, as I'm sure you've come across in some other small businesses.

If anyone has interest, knows anyone who may be interested, or have any ideas for getting this funded, please let me know. My email is redacted and cell phone is###-###-#### .

Thanks,

Tim

Reply by a professional
from The University of North Carolina at Chapel Hill in Raleigh, NC, USA

Tim - reducing transportation spend is one fairly quick way to generate working capital, albeit not the $500k you're looking for. Importantly, it's non-dilutive, so that's a plus. Showing that you have a plan for increasing transportation procurement efficiency will likely be an asset in securing funding. Happy to take a look at what you have to estimate savings potential and timeframe. You can see what we have done at wynnefordsolutions.com. Thanks, Bill
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Reply by an investor
from Hobart and William Smith Colleges in Dorset, VT, USA

The cheapest source of working capital will always be your vendors and customers. They have the money, you just have to be very persuasive to get them to give it to you. Everyone else will take it on tough terms and be less of a partner. I know, it sounds impossible but it's not.

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