Cash-flow solution lets all-natural toys expand worldwide
Mike Wiesel liked to find dilapidated buildings, fix them up and sell them. He also managed other people’s properties for them.
But after 15 very hectic years, Wiesel needed a change and out of the city of Montreal. So he and his then-girlfriend Marie, now wife, sold everything and moved an hour outside the city.
“I decided to open up a country store, which was a complete lifestyle change.”
The Station Knowlton Country Store quickly became a local landmark in the Eastern Townships and, always an entrepreneur, Wiesel started producing his own products.
“We would produce natural soaps, put them out there in the store to dry, and we actually got a pretty incredible reputation from the natural soap line.”
But when Wiesel read the label on a commercial lip balm his daughter was using he knew he wanted to find a safer, more natural alternative — something that would be chemicalfree, yet still fun for a young girl to use.
He headed to the kitchen and starting experimenting. Soon, Wiesel had created do-it-yourself kits — not just for his daughters Helen and Katie but for anyone to make their own all-natural lip balms.
He soon had the lip balm kits in bags for sale in his store, where they quickly became bestsellers.
Then they added a soap-making kit, which was followed by a bath fizzy-making kit.
Soon after that the family moved back to Montreal (the country lifestyle was a little too idealistic) and Fundamental Toys — and its brand, Kiss Naturals — was launched, offering a variety of all-natural doit-yourself bath and skin-care kits aimed at children and youth.
“It was basically very grassroots. We found a list of all the best toy stores across Canada and sent them samples of what we were doing. Looking back now, it just wouldn’t have even happened today.”
Things were going well in Canada at the start, but expansion into the United States and a changing marketplaceturned out tobe as hot of reality.
Wiesel and his wife invested all of their savings into the business — even remortgaging their house — as they sought to expand.
“After going through borrowing money from every single person I knew, my brother, my wife’s family, my wife’s friend’s family, we decided that we’re either going to sell the business … or get a financial partner,” he says.
That’s when John Tsien reached out to him through LinkedIn, saying he was in the toy business and liked what they were doing.
“I said I’m at the end of my rope, and we need an investment,” Wiesel recalls.
A Hong Kong-based businessman, Tsien soon became a majority owner of Fundamental Toys, investing more than $500,000 into the company.
But, as they pushed further into the global market, it still wasn’t enough cash for operations — and, worse, because Tsien isn’t a Canadian citizen, Canadian banks wouldn’t help, even though the company makes money.
“Funding a business seems to be getting harder, not easier,” Wiesel says. “We’ve been with our bank for three years, but if you don’t fall within their parameters, it’s impossible to get a loan.”
Because Fundamental Toys is a manufacturer of gift items, Wiesel estimates about 70 per cent of the company’s business is done in the last 90 days of the year: the Christmas and holiday season.
But it still has to maintain a steady stock of supplies, everything from raw ingredients to packaging. The boxes they need in November, for example, have to be ordered in June. With such a long production cycle and limited access to bank funds, it was sometimes holding the company back.
“What happens then is, because you don’t have the funds, you don’t take the risks in the purest sense.”
That’s when someone at the bank recommended FundThrough to Wiesel. An invoice funding service, the Canadian company lets business owners like Wiesel and T si en overcome cash flow constraints by advancing payments on outstanding invoices.
Wiesel checked it out and by September of this year, they had signed up.
“We use FundThrough for a few invoices,” Wiesel says. “There are no hidden fees and it just frees up our money.” And it works quickly and easily. “I describe FundThrough as a company you can actually get results from,” Wiesel says. “It really makes sense.”
With help from FundThrough, however, Wiesel can pay his suppliers, maintain good business relationships and concentrate on growing the business — not fretting about chasing down payments or finding the cash to take advantage of an unexpected opportunity.
“It’s the lag time in manufacturing where turnover, or the time from when you buy materials to when you get paid, can be several months and cash flow can get tight.”
Recently, when a new customer put in a large order and wanted it in two days, the company was able to go ahead with the increased production without stressing about the immediate cost of the extra packaging.
“With FundThrough, you save all your time and energy to put into your business,” he says. “You’re so much better off taking that energy and putting it into what you do best .”
For Wiesel, that means developing new, all-natural kits for children and adultstotry.
“We have eight different kits. There’s a hair chalk, bath fizzies, soap and lip balm ,” he says .“And we’ re constantly developing new products .”
New markets, too. Currently, Fundamental Toys products are for sale across North America, including Mastermind Toys and Toys “R” Us in Canada, as well as Amazon, Whole Foods and Lakeshore Learning. They’re also for sale in Australia and New Zealand.
The company is finalizing approvals for the European market. And soon, they’ll be in Mexican toy stores, too.
“Our expansion will continue into more Latin American and European countries in the next year ,” Wiesel says.
“My desire is to make this company world-wide, in as many countries as possible.”
With Fund Through, you save all your time and energy to put into your business