Corporate Q&A: “If you can’t fund your stock you can’t grow”
Grainne Kelly is the founder and CEO of Bubblebum UK, designer and manufacturer of innovative travel solutions for families, including BubbleBum, the inflatable car booster seat for kids. Despite the fact that the company exports to 28 countries worldwide and is stocked in major retailers globally, funding remains its biggest challenge, she tells GTR.
Name: Grainne Kelly
Company: Bubblebum UK
Title: Founder and CEO
Sector: Design and manufacturing
GTR: How has Bubblebum’s exporting business grown since the company was established in 2009?
Kelly: Soon after the company was founded we were featured by the innovation-spotting network Springwise as one of the “top 10 most innovative companies” and, as a result, were inundated with distributors. We started exporting immediately and every month moved into another territory. We were growing far too quickly. Within 24 months we were in 24 countries, which to some would be great, but to us, as a small company, wasn’t – we weren’t focusing.
We also decided to focus on the US at the same time. We were struggling to get the product ready for the US market, because none of the crash test laboratories would respond to me. So I rang them up and told them I was going to pay them a visit, and very quickly I started to get answers from them. I moved to America in early 2010 with my family to try and understand the marketplace. Thank goodness I did – we would have never been able to get into the American ≠market if I hadn’t gone over. We stayed in the US until early 2011 and then moved back again.
Over the last 12 to 18 months, we have changed our strategy significantly. We are now hyper-focused on the e-commerce market – specifically in the US. We’ve also changed how we sell to stores: we choose one major retailer as our regional partner, and for the other retailers we will only do promotions. We’ve learnt that to be perennial in store is very costly because you’ve got many marketing expenses. It’s all well and good for our egos to be there, but it’s not very good for our pocket.
GTR: What has been a recent success story in terms of exports?
Kelly: Our relationship with Amazon in France, Germany, Italy and Spain. Amazon is a core partner for us globally. We used the money we won in the Open to Export award in the German and French markets specifically to take on board native speakers, for example, which has completely turned around our listings and searchability.
GTR: What is the biggest challenge facing your business?
Kelly: It’s always funding. We’re growing, and so are reinvesting every year. We have a long lead time, so we always have a two-to-three-month period at the same time every year when funding is always tight. We work around it with our suppliers and our customers and so have always managed. But with the growth rate that we’re anticipating in the next two years we will need to put further facilities in place. The bank doesn’t want to lend any money; they’re completely risk-averse. The only support the bank has provided for us is invoice discounting, and we can get that anywhere. There are many other niche companies that are prepared to do unsecured loans and their lending rates are not extortionate.
Every small business owner that I know has got the same issue. The problem is that if you can’t fund your stock you can’t grow.
GTR What do you think banks need to do to be able to remedy that?
Kelly: They need to put their big-boy pants on and start lending again. The only people they’re lending to are people that have lots of money, who don’t actually need it.
Banks say that they are lending and haven’t declined any offers to credit. But they’re not putting the offers through to credit in the first place.
GTR: How are you bridging your two-month funding gap today?
Kelly: We’ve formed a great relationship with our supplier. We’re on top of our cash flow, so as long as we let people know well in advance, there are no surprises.
GTR: Where do you see the best business opportunities going forward?
Kelly: Most definitely online in every territory. Today consumers use the store as a showroom: they look at the product in the store, and then go on to their phone to scroll through Amazon and read the reviews. While they’re still in the store they click buy and have the product delivered to their home, so that they don’t have to carry it with them. The difficulty for a lot of the major retailers is that the corporate world is very clunky and slow to change and therefore hasn’t moved with the times.take me back