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Team Member Claire Bryant
Author: Claire Bryant

Surviving Swinging Lockdown Levels

March 8

From humble beginnings in 2006, NZ Muscle is a true grass roots New Zealand company. With a huge range of health foods, nutritional supplements, and vitamins, they bring their customers the best products from across the globe. With products for all shapes and sizes, male or female, for the hardcore bodybuilder and the everyday gym goer. Protein powders, protein bars, creatine, weight loss, pre-workouts, intra workout, post workouts, sportswear, NZ Muscle do it all!

When you first meet Dion, Managing Director of NZ Muscle the smile he greets you with does not show the pressure and pain he was feeling just a few months ago. Like many kiwi businesses the last 12 months has brought a forced change to the way we operate our businesses and ultimately how we live our lives. For Dion, this meant he was faced with an uncertain future and rapidly declining sales when the first lockdown hit back in April last year.

During the first level 4 lockdown NZ Muscle were forced to stop operating the business entirely, including ecommerce. As a response to this, the decision was made to quickly activate a ‘buy now, supply later’ campaign at below cost prices to generate cashflow. This was their best option to cover immediate outgoings and kept them afloat for the time being and allowed their customers to show their support.

However, once the first lockdown lifted, a rebound occurred – faster than he had expected. This created a new set of problems. Demand saw stock levels rapidly dip and cashflow could not keep up with the purchasing requirements. These timing issues are common in business, but they were certainly more amplified due to the swinging and swaying of the COVID-19 Alert levels.

Talking with his Advisor Dan Henderson, Managing Director at +MORE they looked at an innovative way to access relatively cheap capital and provide a buffer in his cash holdings to weather these large swings COVID-19 was delivering to his business. The solution was to utilise the BFS to restock to cater for the demand in sales. The Government backed Business Finance Guarantee Scheme (BFS) loans can help small and medium businesses access credit for cashflow, capital assets and projects related to, responding to, or recovering from the impacts of COVID-19. You can apply for Business Finance Guarantee loans until 30 June 2021.

Together Dan and Dion developed a sustainable business plan using the BFS to pump additional cash into the business to support critical and timely stock purchases without having to strip out all the cash in the business. This meant that Dion had cash reserves as we bounced back into lockdown, was able to ensure he kept current with his tax and other obligations and jump onto the new growth surge as it was happening.

As a result of this decision to utilise the BFS, Dion is now investing further into new brands that have a higher margin and are locally sourced to reduce the investment required in stock as well as expanding into fitness equipment which is a new business opportunity for NZ Muscle.  Dion went from surviving these swinging lockdown levels to thriving with the help of the BFS and +MORE’s proactive engagement.

Working with Dan was pivotal in a few ways says Dion. “Dan and I realised pretty quickly on that sitting still and doing nothing was only going to make things worse. Talking with Dan opened our thinking, he was commercially focussed and not simply reviewing the numbers. We looked at what strengths we did have and made a plan to ensure we got through the next year.” Accessing the BFS was critical to our survival during that time and the process was made simple with the support of Dan and the +MORE team.

If you would like to discuss with +MORE the possibilities of the BFS or other business planning ideas, please flick us an email info@plusmore.co.nz.