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Matt Legon founded Gnaw Chocolate in Norwich in 2010 with the dream of developing a chocolate brand that would put a smile on customers’ faces. He was presented with a huge opportunity when the chocolatier’s French distributors asked for a range of mini bars for the ‘impulse buy’ market, aimed at consumers looking for a healthier chocolate bar option.
To meet this great new growth opportunity, Matt needed to invest in a new wrapping machine. So he got in touch with New Anglia Growth Hub to explore funding opportunities.
Gnaw produced three new bars for testing that were so successful, Matt was going to have to invest in a new wrapping machine to be able to pack the volume of new bars being ordered.
With a turnover of £1.3m in 2017 and ambitions to grow that to £3.5m in 2018, it appeared on the surface to be perfect timing. But Gnaw had become a victim of its own success. Funding this high growth opportunity was immediately feasible. So to achieve this significant step-change in production, Matt realised that he’d have to finance the new equipment to cope with the projected demand.
Matt had known about the work the Growth Hub does from his networking so got in touch once he realised the size of the financial commitment needed for the new equipment.
Business adviser David Sparkes met with Matt to find out what his issues and challenges were. It was very clear from the outset that grant funding would help Matt to fast-track production and distribution of the new mini bar range. So David suggested that Matt apply for 20% part funding from the Small Grants Scheme.
Matt had run Gnaw from the outset on a self-funded basis, achieving excellent profitability while not taking on any debt. So being able to access grant funding rather than taking a loan was ideal for him.
Matt is very clear on the benefits he has realised from engaging with the Growth Hub.
“In a nutshell, I’ve been able to scale-up my production line quickly, and it has freed up my resource to focus on developing our international strategy and negotiating with our international customers rather than having to search around for finance,” he said. “Undoubtedly, this has enabled us to act nimbly and take advantage of this great opportunity to enter a new sector of the market. Speedy new product development is a critical success factor in our industry and the Growth Hub’s support has certainly enabled us to proceed quickly with our plans.
“My investment banking background enables me to read numbers very clearly,” he continued, “so I can make decisions on whether or not opportunities are worth going for. I would encourage any business owner planning for significant growth and possible funding to make sure they, or one of their team, has an intimate knowledge of their finances, sale volumes and profitability projections. That will help you to identify where the investment needs to be made and you will avoid wasting your time and money.”
David Sparkes said, “Gnaw is a great success story for Norfolk and Matt’s situation is one that is fascinating in that his challenges were all about managing super-fast growth effectively so that he didn’t overstretch the business’ resources – human, financial and mechanical – but knew he had to act quickly to make sure he didn’t miss out on the great opportunity that presented itself.
“After our initial conversation we put the wheels in motion to submit an application for grant funding from the Small Grants Fund. For a successful application, a business needs to present a detailed business case to demonstrate how it complies with the criteria, be prepared to answer a number of follow-up questions and host visits from the representatives of the fund scheme.
“My role was to support Matt in his submission, help him to understand the requirements and to be the main interface with the scheme. I’m delighted that we’ve been able to help one of Norfolk’s star companies to grow and prosper. It’s exactly the type of situation that the Growth Hub was set up to support.”
If your business has ambitious growth plans and needs help with funding the vital components that would deliver them, we’d love to hear from you. Pick up the phone and call us on 0300 333 6356 and we will put you in touch with one of expert advisers who’ll arrange to come and meet you to discuss your plans.