Client profile: Assured Products

If there’s one thing that Peter Graham can never be accused of, it’s being afraid to get his hands dirty. The Northern saying, “where there’s muck, there’s brass”, is perfectly applied when it comes to Peter’s business acumen.

After some 15 years in retail management and buying with a major supermarket chain, Peter decided the time had come to change direction. At the beginning of the new millennium, he took a complete career change and moved into the car washing business. Although initially successful the venture capitalist owners of the overall company ran out of leverage and at that point Peter realised it was time to return to the retail sector.

“I’d had a bellyful of political agendas,” Peter confesses. “I wanted to start my own business and had a friend that was importing cleaning products which used ‘friendly bacteria’ to break down dirt and grime. I didn’t much fancy the janitorial market, so we began to investigate whether we could apply the bacteria to consumer products.”

It turned out that the little bugs were particularly effective in digesting “highly organic matter – basically the waste matter that comes out of your body!” explains Peter. “The pet market, in particular, proved an interesting opportunity with its large independent sector and most of their products being imported.”

Despite the recession, the partners set up Enviro-Works Europe Ltd in 2010, initially offering pet (Wee Away) then garden products. As the company grew and invested in additional brands, it was renamed Assured Products. Within a year, Aggie MacKenzie, the cleaning demon from the TV series “How Clean is your House?” had taken a shine to the Assured team and business really started to take off. Products are now supplied to major high street chains, pet shops, garden centres and TV shopping channels.

However, expansion required funding and, as Peter explains, “the banks didn’t want to lend. Simon, my business partner, and I had some money and the bank agreed a small overdraft facility, but it wasn’t enough to market our existing products and develop new ones. We had put in some money and were living off our savings.”

After his previous experience with venture capitalists, Peter was reluctant to give the company away to a business angel. “Simon and I wanted to keep control of the business ourselves. We talked to our financial advisors and we had heard about pension-led funding, but our advisor couldn’t get anything going. Then we found the pensionledfunding.com website, which was owned by Clifton Asset Management, and we contacted them.”

The Assured team met pensionledfunding.com’s Alan Crook. “We provided information on our pension funds and got some speedy responses on what could be done,” Peter explains. “And, we were really surprised at what could be done so quickly. We were looking for about £100k over a fairly short period of time and this seemed achievable.”

“The process was very smooth and quick, a matter of weeks, not months. We had to provide P&L and balance sheets along with our pension information, but that was it. All businesses should be able to provide this sort of thing. When you’re running a business you need to know where you are in six months to three years. It’s not jumping through hoops, it’s just basic business sense, but some companies don’t seem to think this is important.”

The partners did have to consider the up-front cost of pension-led funding. “You do look hard at the up-front fees because they are high and you can always find a lower-cost way of funding a business. However, we didn’t have to give away a large chunk of our business to fund our company and we didn’t put our homes or personal assets at risk. Everyone has to make a living and there is no such thing as a free lunch, but pension-led funding is too good to be true in other ways. I really can’t believe other businesses aren’t aware that it’s legal for entrepreneurs to use their pension pots to invest in their own companies.”

Assured Products agreed a straight loan against the business with a five-year repayment through the Directors’ pension scheme and then agreed a further IP purchase by the scheme some months later. “We set the loan interest at five percent as that also seemed a reasonable return for our pension fund.”

By the end of 2012, the funding had been put to good use and the Assured team are taking control of their future. “We’ve grown from about three product lines to sixty plus; we’ve opened a warehouse and we now share a factory so we can produce our own products,” says Peter.

“Without pension-led funding, Simon and I would have had to have given up and gone back to working for someone else. Without the money, the business would not be in its third year and growing, at least not without our homes being at risk. We’re on the road to our goal of running a successful business that makes good money, employs happy people and can be left to our children if they want to get involved.”

Business

After 15 years in retail management, Peter Graham and his partner set up a company providing cleaning products for pets and gardens. Aggie MacKenzie from TV’s ‘How Clean is Your House’ took a shine to the Assured Products and they appeared in major high street shops.

Funding needs

Expansion required funding and apart from a small overdraft facility, Peter couldn’t get any financing from the banks. Both partners were reluctant to give part of the company away to a business angel, but had heard about pension-led funding and decided to find out more.

Result

Assured Products agreed a staight loan against the business with a five-year repayment through the directors’ pension scheme and then agreed a further intellectual property purchase by the scheme some months later.

Going Forward

By the end of 2012 the funding had been put to good use and the Assured team were taking control of their future. The product line grew from three to 60 plus, they opened a warehouse and now share a factory so they can produce their own products.

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