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  • Writer's pictureTerry Fisher

Growing With Cashflow

Updated: Sep 22, 2023

This blog might come as something of a surprise, as you'd most likely expect for a serial investor like me to say that 'you must take on investment to scale', but that's not always the case.

Of course investment into your business at the right time can - and should - be like throwing fuel on to the metaphorical fire, but the key part of that comment is 'at the right time'. Too many people that I speak to - often those pitching me their proposition - look at an investor's cash as the silver bullet they need to solve all their issues, challenges and hurdles.


The plus side of taking on investment is that you can often speed up the process of business growth, the downside is that if you are heading in the wrong direction you just expedite getting to the wrong destination faster!

A slower - but often more stable - way of looking to scale up your business is via cashflow i.e. you reinvest your own profits back into the company to enable expansion. As someone who has used both methods, in this blog, I am going to share how my first major business used cashflow to grow... to a certain point then brought in external funding to accelerate.

Back in the 1980's (if you are too young to remember those heady times lucky you!) when I first started Travelworld, access to capital was a lot (and I mean a LOT) less easy to come by. Even access to information on how to grow via a cash injection was also a lot less simple to find, so many of us business owners could - and would - only grow our businesses as fast as cashflow would allow. For example, once we’d got started and the first Travelworld store was generating enough profit we would look to find another site to open and then repeat the process.

As I have often shared, the hardest thing in business - in my opinion - is to go from one to two shops. Once you've decided you can hand over control and trust someone else, then you've got a choice to make; do you look for outside investment, or are you trying to grow by bootstrapping it, organically using your own cashflow.

Within the travel industry we had created a very unique proposition so our stores became very profitable, very quickly. When I look back at what elements enabled us to create such high margins it was; unique offering, huge demand from ideal customer base and - at the beginning - no competition. We were fundamental in crafting the 'last minute package holiday', which was a market that simply didn't exist until we 'invented' it. Our competitors misunderstood that niche within the sector to such a level that they used to be our biggest sources of leads... they would literally send customers out of their shops to come and see us on a Saturday!



I'll share more insights around creating an innovative business model in future blogs, but let me get back to the cashflow side of things for now.

Because we were 'the only game in town' we had favourable agreements in place with the tour operators, they saw us as their partner in creating sales of previously unsellable stock and the profit margins reflected our value accordingly. Whereas most other independent travel agencies would sell generic holidays in a generic way, we focused on creating a bespoke travel offering for a specific audience. The fact we had a niche in ‘last minute deals’ meant that customers came through the door ready - and willing - to transact. This meant we could take a standard travel agency, rebrand it to Travelworld, change the focus to our ‘last minute deals’ model and increase the store's profitability almost instantly.

When you bootstrap a business - if you keep the margins right, which is absolutely critical - then one shop funds another and it can become like a domino effect. What happens is the first store funds the second and then as soon as that second shop gets up and running at full kilter that can fund the third and the fourth shops. Four doubles to eight, eight doubles to sixteen and so on.

If you keep a very close eye on those essential margins (yes, it is so important I have mentioned it twice in two sentences!) and as long as you keep the costs under control, then it (can be) fairly easy to scale that way. Don't get me wrong, this is a slower option because you're not bringing outside investment into the business, but it does mean you retain control, you don't dilute ownership and you can move at your own pace.

To give you an idea of the value of bootstrapping vs investment let me tell you that the above 'double the numbers of shops with bootstrapping model' was exactly what we did with Travelworld, and that allowed us to grow from one single shop to 32 stores in around 8 years. Not bad I hear you cry, but then we bought in external investment and went from 32 shops to 132 stores in 3 years... as I mentioned earlier investment can be like throwing fuel on the fire, when you are adding scalability to an already proven and tested, working system.

In summary, there is no right or wrong when it comes to scaling - you can do it with or without funding. I have done both and both can work. Slow and steady can sometimes win the race but there are occasions when investment-driven speed is the preferable option.

Whichever you choose, I wish you well on your entrepreneurial journey and adventures!

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