GTM playbook
Winning new clients often costs more than you’d expect, but if their lifetime value is at least three times your acquisition cost, it’s a healthy investment.
Read
We’ve been having a lot of really positive conversations recently with people looking to build something in the care sector.
It feels like it’s the prospect of building a company that truly changes people’s lives, and the soaring, predictable demand for the sector that are two big elements informing decisions. Funding is a huge topic at this point so I thought I’d touch on the big question:
“So, how much money do I need?”
There’s a philosophical answer to that question, but I’ll give the practical one in relation to homecare start-ups. We’ve updated our cashflow forecast for 2025, and the headline figure for us is £70-£100k+, but with big variations. Here are the main variables:
- Your own monthly drawings – if you personally need £3k monthly from month 1, that’s an extra £36k in year one over someone else who has an understanding (and well-resourced) spouse, other sources of income, or extra savings. There’s no right or wrong answer, but lenders will want to see evidence of how you plan to pay your personal bills either way.
- Your Registered Manager plans – If you have a background in care or similar, you might be able to be the RM for a while. We do support owners who choose to do this, and it can save £30k in the first year.
- Your CQC Registration – following the traditional model of getting CQC registered can cost anywhere between £7k and £20k. Talk to us about how we can help manage the costs and risks involved.
- Your franchisor initial fees – Our fees are on average £20k less than some of our national rivals due to our Shared Success Guarantee. When you factor in VAT and interest on that difference, the total saving with a brand like ours is £32,435. If you needed to borrow to fund an extra £20k initial fee with another franchisor, that will incur monthly repayments of £763 over 36 months. That’s an extra £8,832 in year one loan repayments, pushing up the total capital you need.
- Your financial model – Are you going to provide high-touch, high-quality with associated higher margins, or Local Authority contracts with big turnover but razor-thin margins? You’ll need more working capital to deal with delays in payments, increased wage bill, and potentially bigger office teams with the latter
- Your funding arrangements – Big loan repayments can affect your cash flow. Loans are how most businesses get off the ground, but it’s something we always talk through with prospective partners. We work with all the big banks and are able to access various options, like repayment holidays and no early repayment charges, which helps.
I hope that is of interest – If you’d like to know what all this means for you personally, do just book a call with me and we can discuss.
Best wishes, Ben.