Family Business Barking Up The Right Tree To Secure Growth

This Victorian garden mulch supplier, a family business run by three brothers, says debtor finance was the best way for them to free up short term capital to allow the business to expand.

The family business is now looking chipper thanks to their creative financing solution.

Two crucial business junctures for any family business revolve around succession, or the younger generation wanting to take the business in a different or larger direction than their parents.

Bark King, a family-owned business since 1975, supplies premium mulches and barks to metropolitan and rural areas around Victoria.

Director Stuart Johnston said the business, established by his parents, Harold and Dorothy Johnston, passed to him and brothers Robert and Jeffrey when their 86-year-old Dad died in 2003.

“We wanted to expand the business and bought new equipment, which was a big cost item,” Stuart says.

“We were using 5000 litres of diesel a day which was a huge outlay for us, and we wanted new equipment that would be more fuel-efficient.”

Their in-house accountant recommended they consider going to Scottish Pacific for debtor finance – they did so, and a decade later are still using debtor finance for the advantages it brings their business.

“Through Scottish Pacific our business has grown a phenomenal amount. Until we found them, we were really struggling because we were growing so quickly and had huge purchase outlays,” Stuart says.

“Using debtor finance has really helped our cash flow.”

Bark King employs 42 people, including a number of family members.

For other family businesses unsure whether debtor finance might be a good option for their growth, Bark King’s Stuart Johnston had this advice:

“Debtor finance was the only way we could free up short term capital to enable the business to expand,” he says.

“Having funds available on a weekly basis instead of between 30 to 60 days from invoices meant additional equipment could be financed to produce more sales. For us, it’s been a win-win situation.”

Bark King is a family owned business founded around 40 years ago, initially in road freight transport. Recognising market demand for garden mulch and bark products, Bark King developed their own client base and manufacturing facilities creating distinctive quality graded mulch.