Client profile: PS Golf Ltd
- "There is no reason why I would not recommend it to other business owners.”
- Part of existing pension transferred into a SSAS
- Secured £70,000 against stock
- Consolidated with further loan of £75,000
Risk goes with the territory when running a business and pumping significant funding into the operation can take that to a new level.
Phil Smith was the last man standing, running the only remaining Nevada Bob golf store in England and mainland Europe, and believed after 23 years of selling clubs, balls, shoes and clothing, he knew a thing or two about his business.
The Nevada Bob’s Golf franchise, which had 60 stores across the continent by the year 2000, had retreated from its out of town presence, leaving just an online-only operation. However, Phil believed he possessed the experience to make a success of his Colchester store, PS Golf Ltd.
The problem was “the banks didn’t agree”, said Phil, 60. “My only option was to look for alternative sources of funding.”
That came from an unlikely source, himself. Phil had never heard of Pension-led funding or the option to borrow from your own pension when our letter dropped through his door, but he needed finance and decided to invest some of his pot into PS Golf – twice.
Phil said: “It was not something you really like to do but it was a choice of pulling the plug on the business or getting through difficult times.” Phil said he and partner Sue were taking a risk but how that has paid off.
With help from Pension-led funding, part of his existing pension was transferred to a Small Self-Administered Scheme (SSAS) and, first up, he secured a £70,000 loan against his stock. A further top up was consolidated with a loan of £75,000 loan the following year to be paid back over four-and-a-half years, although Phil intends to clear that early.
“The first deal was not enough, so we did it again,” he said.
“Over the last three years the business has started to turn around. In 2015 and 2016 there was a reasonable increase in trade. The industry had been suffering but was getting cleaner.
“In 2017 business has gone through the roof. Our performance is up 45 per cent on last year to date.”
The mild and relatively dry winter is one of the reasons for the stellar start to the year as well as a change of marketing strategy to focus on social media which has altered the profile and lowered the average age of his customers. PS Golf have responded by reviewing their product range.
The introduction of an in-store simulator has “dramatically increased” the number of clubs sold. Customers can now see the improvement a new set makes to their game without leaving the store, which is a conveniently placed just off the main A12 outside south of Colchester in Essex.
PS Golf also specialise in lady’s golf with a mezzanine floor dedicated to women’s equipment and clothing, boasting the second highest turnover of Lady’s Footjoy shoes in the South East.
Phil, who plays off a six handicap, said: “Using Pension-led funding meant I had an opportunity to carry on the business. It was down to myself and Sue to decide it was an opportunity worth taking.
“The process was fine, it did the job. It was quite clear how it was operating and what it was about. There is no reason why I would not recommend it to other business owners.”
(Pension-led funding carries financial risk to the borrower like any other commercial credit facility)