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When Spotted Cow Cookies started, baking cookies was a part-time job for founder Tahnee Walters, but as the calf grew into a cow it needed more money to become a viable business. Here’s the story of how a growing business milked its own sales for cash. 

Tahnee Walters knows the meaning of hard work. When the founder of Spotted Cow Cookies started the brand in 2003, it was one of three jobs she was doing at the time, alongside her roles as a nanny and a waitress. As a nanny she started baking cookies as one way to pass the time while looking after her young charge and found that not only did she enjoy it, other people enjoyed the delicious results.

After refining the concept of baking dessert flavours—such as sticky date pudding and caramel, , and lemon tart—into a cookie she walked the streets and knocked on cafe doors to ask owners to give the product a try in the hope that they would become customers. “People just loved the cookies and it grew from there,” says Tina Regan, finance manager of Spotted Cow Cookies.

In 2007, Spotted Cow Cookies became Walters’ sole focus. Previously she had sub-let a catering kitchen to bake product, but five years ago she decided she required her own premises to have a serious go at it. The business was growing and Walters needed a different kind of dough to keep it running; it was time for the money in the business to do the hard work.

Taking the cow to market

Although sales were increasing, the business was not yet profitable, which severely limited the options for securing funds. In the beginning, Walters had hoped to find help through government grants and other forms of financial assistance, “but it soon became apparent that they often weren’t available so she did it on her own,” Regan says.

Walters ended up working those two other jobs for several years in the first stage in order to bankroll Spotted Cow Cookies. “All of Tahnee’s wages were being funneled into the business to  buy the ingredients, hire the kitchen and for other business expenses,” confirms Regan. In the growth phase, however, she didn’t have that option because she needed to concentrate on the core business.

Regan says they started looking at a bank loan or an overdraft facility, but because the business was in its infancy, they had difficulty obtaining credit. The only other option on the table was selling part of the business to boost capital at the risk of losing control of the brand. That is, until a leaflet in the mail told them they could leverage their sales ledger for credit.

Regan says Spotted Cow Cookies now uses Oxford Funding as a cash flow provider. “Debtor finance was a fantastic option for us,  we are now using our  own money to grow the business.”

Using debtor finance means the business assigns its debtors (invoices) to the financier. Spotted Cow’s facility is non-confidential, which means that the business informs the debtor of the debtor finance arrangement on its invoices and receives a portion, usually 80-85 percent, of the money owed upfront. When the customer pays the invoice, the financier releases the balance of the money to the business, minus the administration fee and interest. Another form of debtor finance, invoice discounting, functions in a similar way, but as a confidential facility, so debtors are unaware of the financier’s presence.

Milking the cash cow

As finance manager, Regan understood that a strong foundation of positive working capital would need to underpin the business’ expansion to ensure its growth didn’t become growing pains. “We knew the business was going to grow at a rapid pace, it was just a matter of cash flow,” she notes.

Having a debtor finance facility meant that Spotted Cow Cookies could take on extra sales against the strength of its receivables, a key function when the business started chasing larger customers,  who often had longer payment terms. “If you want to sell to large corporate customers you need to accept their payment terms “For a growing business to carry debtors past our ideal 14 day trading terms we needed to look for funding options to ensure regular cash flow to support this growth

Securing debtor finance enabled the cookie bakers to pursue the jumbo customers because they could agree to the longer terms of payment, confident that their financier would supply them with 80-85 percent of the invoice value upon delivery of the goods. You can now munch on a Spotted Cow Cookie at 10,000 feet on a Virgin Australia or Skywest flight.

Before the business used debtor finance, it carried all of its own debtors. Now it has no fear of big sales because factoring ensures that it can’t over-leverage. “We have  approximately 75 percent of our invoicing with Oxford Funding, especially our larger customers,” says Regan, comfortable with the facility.

Alternatives to dairy

The self-funded business has come far since its early days as a part-time activity for Walters. Just as Spotted Cow Cookies grew out of Walters’ own pocket, it’s a relief to know there’s a way to fund growth from its own fodder without having to sell a stake in the business, says Regan. “One of the options we considered was to sell part of the business to raise the funds to be able to support the growth. A concern with selling part of the business is depending on who you sell to, you could lose a portion of control—it’s nice to be able to keep it in-house.”

Regan’s advice to other small businesses is to keep an eye out for all the options and to stop being scared of paying for finance. “A lot of people think debtor finance  can be quite expensive, however if you look at the leverage it  gives a growing business and the actual costs  to use the facility, it’s a fantastic option. If the alternative is selling part of your business, it really is about what that money allows you to do in terms of growth. To grow your own business with your own funds is a truly satisfying feeling.”


This article first appeared in the November issue of Dynamic Business.

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Adeline Teoh

Adeline Teoh

Adeline Teoh is a journalist with more than a decade of publishing experience in the fields of business, education, travel, health, and project management. She has specialised in business since 2003.

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