Finding what you are good at, and doing it better or with more panache than your competitors, is a smart SME business strategy that Australian niche manufacturer Cole Clark Guitars has used.
Using mostly Australian sustainable timbers, with a Spanish heel construction and the world’s most natural sounding pickup system, Cole Clark guitars looks and sound different.The Melbourne-based business was founded in 2001 by Brad Clark and Adam Cole, with the aim of manufacturing Australian acoustic guitars differently from the rest of the guitar market.
This has been appealing to a range of renowned musicians including Alex Lloyd, Tex Perkins, Pete Murray, Ben Harper, Birds of Tokyo, Jack Johnston, Angus and Julia Stone and Snow Patrol. A Cole Clark guitar even found its way into the hands of the legendary Paul McCartney on his recent tour of Australia.
Cole Clark is one of hundreds of Australian manufacturers who partner with Scottish Pacific to fund their business growth.
Miles Jackson, one of the original shareholders in the business, came on board as CEO in 2012 after a career in the musical instrument retail and distribution sector.
“In July 2017, we started our own US distribution and within 12 months we expect to grow from selling our current 3000 guitars a year to 4000, with massive year on year US growth potential,” according to Miles.With the business doing well in Australia and the US, Miles’ plans for Cole Clark Guitars include expansion in the lucrative US market.
Cole Clark has plans to release an electric base, as well as other new ideas to diversify the product range.
Based In the industrial Melbourne suburb of Bayswater, Cole Clark has 39 staff in the business, including 30 on the floor making guitars, and a few based in the US.
“We recruit staff from guitar-making courses, often builders interested in making instruments. Many of our staff have been with us for 10 years or more, some are just starting their instrument-making journey.”
Cole Clark’s thriving workshop abounds with Australian timbers including bunya, blackwood, Queensland maple, satin box, black bean, river she oak and huon pine, as well as Australian-grown foreign timbers such as Californian redwood and European maple.
Being Australian-made, the guitars are pitched at the mid to high end of the market, for the pro, semi-pro or very keen amateur, with prices ranging from $2000 to $7000.
“Our competitors are 60 or 70 years old (one competitor was founded in 1833!), so we are very young in the scheme of things, and we’ve come a long way in a very short time,” Miles says.
The business needed a funding solution that would accommodate their needs as a fast growth start-up, and since 2010 that solution has been debtor finance.
“We use debtor finance (invoice finance) to assist with cash flow. It helps us to get things done, and allows us to even out the peaks and troughs we naturally experience in this business,” according to Miles.
“We look at it as growth funding that allows us to cover materials, wages and other costs while we wait to be paid for our goods.”
Cole Clark has a facility with Scottish Pacific for up to $500,000, and usually utilise around $200,000 to $300,000.“Having customers in Australia as well as the US export market works well for us, as when it’s slow season in Australia, it’s busy for us overseas. This, along with debtor finance, allows us to get the best from our working capital.”
“I’d definitely recommend debtor finance to other small businesses. For Cole Clark, it has been very handy. We sell product here and in the US and very quickly the Scottish Pacific funding kicks in, in time for us to pay wages and suppliers,” Miles says.
“Working with Scottish Pacific is very seamless. They get to know us, and our business, well. Our book-keeper works very closely with them to keep our business rock and rolling.”