AcePro – How they grew a $300K/year business to $12mil/year in less than 4 years

Ben and Adrian had an entrepreneurial dream.

They wanted to build a large security firm, providing top quality security guards in Singapore. But every business owner would know that running a manpower-focused business like that would face serious challenges. Challenges not just from people management, but also fierce competition from the market.

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How it all started

Just like a lot of businesses, when AcePro first started, they started hitting the market by providing services at irresistible prices. They worked hard to recruit the best people for security management for condominiums, private apartments and commercial buildings.

Very quickly, AcePro bagged a number of new clients as the business started to see some traction.

But as the business started to grow, they started experiencing one fundamental problem of manpower-focused businesses.

Cashflow challenges.

Despite providing top-notch quality security services for their clients, AcePro was reporting a deficit for 3 long years. Just to paint an example of how a manpower-focused company like AcePro would typically operate.

Assuming below are their costs and revenue for them:

Costs of 1 manpower - $2,000/mth
Assuming AcePro charges -  $5,000/mth per headcount
And assuming they need 10 manpower for a new client

Their example of cashflow would be as follows...

What happened

Cash Inflow

Cash outflow

Net Balance in Bank

Acquired client by beginning of the month

Hired manpower for new client

N/A

N/A

$0

End of Month #1

Paid staffs salaries- Issued month #1 invoice

$0

-$20,000 for salaries

-$20,000

End of Month #2

Paid staffs salaries- Issued month #2 invoice

$0

-$20,000 for salaries

-$40,000

End of Month #3

Paid staffs salaries- Issued month #3 invoice

Collected month #1 invoices cash

$50,000 from month #1 invoice

-$20,000 for salaries

-$10,000

As you may notice, the cash net balance was always in the negative. Multiply the above example by hundreds of clients and thousands of employees - that would give you a realistic example of what AcePro was facing.

And then they tried going to the banks

They were searching around for solutions to their cashflow challenges, and they had to move dead quick. Any more delay to resolving that problem would cause serious financial damages as they would not be able to sustain the business much longer.

In short, they needed more working capital

General Rule of Thumb

Most stable businesses always have at least 3 months of revenue as working capital.

They went to bank after bank, applying to get a business loan. Sadly, none of the banks had the desire to accept the loan application.

None can blame the banks for that too. Even with the backing of SPRING to subsidise loans, banks do not want to fund any loans that have unwarranted risk.

Over the years, the banks have learned many painful lessons from funded deals that turned sour.

So often times, they would rather focus on businesses with long track record (at least 3 years in business), reporting growing revenue and net profit.

But that doesn't mean that businesses that are in deficit are bad businesses right? AcePro is one of such businesses that had solid professional credentials, dependable manpower and amazing systems.

How could they have been overlooked?!

Perhaps it was a blessing in disguise. Although businesses like AcePro may not pass the traditional lens of a solid business, they were well on track to make big waves in the industry.

The only challenge yet to be resolved was their cashflow challenge.

This was where alternative financing helped to resolve this stumbling block. From operating at a net loss every month, they were now operating at a much stronger financial position.

Now imagine the same scenario, but this time with proper financing.

What happened

Cash Inflow

Cash outflow

Net Balance in Bank

Acquired client by beginning of the month

Hire manpower

Took on invoice financing of $40,000

$40,000

N/A

$40,000

End of Month #1

Paid staffs salaries

Issued month #1 invoice

$0

-$20,000 for salaries

$20,000

End of Month #2

Paid staffs salaries

Issued month #2 invoice

$0

-$20,000 for salaries

$0

End of Month #3

Paid staffs salaries

Issued month #3 invoice

Collected month #1 invoices cash

$50,000 from month #1 invoice

-$20,000 for salaries

$50,000

As you can see, with the exact same scenario, this time, their positive cash balance has helped them to stablise the operations of the business, and allowed Ben and Adrian to focus on acquiring new clients.

In fact, AcePro after its 3rd year of operation became highly profitable. Cashflow problems are now a thing of the past. Revenues have doubled year on year and they are now seeing an annual revenue of S$12million per year.

In fact, Ben and Adrian are well on track to expanding the business even more as they recently acquired Inquiro Consulting, a tech-based security company.

Would you like to eliminate all cashflow problems once and for all?

Like Ben and Adrian, you too can start focus on growing your business instead of worrying about cashflows and cash cycles. 

Even if the banks don’t support your business, there are more suitable options for you.

Click here to find out more