How Brixx Helped IT Firm Cindercone Reach New Heights
“Brixx will help us decide when our company has reached its ideal size,” says Martin Hepworth, Director of IT firm Cindercone.
Cindercone was started by two ‘techies’, Martin Hepworth and Nick Claydon. The firm offer a wide variety of technical services, with best in class EDI processing software, custom development services and integrations to ERP, CRM, eCommerce and EPOS systems.
Working mostly with business to business SMEs, Cindercone help their clients integrate software.
“As a business grows to SME-size, they typically have many disparate software systems which need to be centralised. There may be customer, supplier, warehouse and partner systems that need to be integrated with a central business system. Cindercone understands systems, business protocols and business process, technical data and creates the flow of business online. A good example would be where a business has an online ordering system with information that then needs to be keyed in to get it to the next stage of warehouse fulfilment, packaging or invoicing. Cindercone automates the process between the systems, freeing up employees to carry out higher-value actions for the company,” explains Martin.
Talking about the company’s journey to finding Brixx, Martin says “Brixx modelling was a whole new area to us. Having started the business as two ‘techies’, we didn’t think of ourselves as businessmen with an evolving business. We were very successful at winning new clients and work. The company was getting busier and busier without any real plan. We didn’t use any software at the start, and our measure was ‘we’re doing okay, we’re making enough money’. Starting to feel a little bit of burnout three years ago, we decided it was time to re-evaluate our business. Asking ourselves ‘What’s this all about?’, we realised that we wanted to be able to enjoy the success of the business. If we wanted to realise the value of the business, we would have to get serious about what we were doing.” It’s a situation many business owners will be able to identify with.
Martin was lucky enough to qualify for a place on the sought-after Goldman Sachs 10k Small Business growth programme, the ideal way to re-evaluate the business. Course participants are tasked with identifying and executing the steps necessary to enable them to scale their ventures, create employment and expand to new markets. They then develop a business growth plan they are prepared to implement back into their businesses.
On the course, Martin identified three main areas of growth for Cindercone. His next challenge was to create a financial model of those three scenarios, to develop plans and options within them. One avenue identified was to create software as a subscription rather than service base and Martin needed to plug in variables to try out ideas. “For example, if the team wanted to model bringing in a new consultant to do technical work – what would the variables be for how many days work was required, at what rate, and the subsequent cost to the business to work out potential growth”, explains Martin. Brixx proved to be the ideal software to meet Martin’s expectations.
Since the course ended, Martin has mostly used Brixx for ‘what if’ scenarios on prices and people. “With Brixx, employee costs are set up on the system, so it’s easy to see the effect on the bottom line if we gave an x% salary increase to employees or bring in an extra person. The financial effect can be modelled really quickly and easily. It’s easier to see where we need to bring people in to reach the targets. Our plan was to double revenue and head count over next three years. Revenue is dependent on how many hours we sell, so therefore we need headcount for selling and fulfilling. We certainly wouldn’t have been able to recreate projections on Excel, it would have been such an onerous process that I wouldn’t have pursued it!”
“With Brixx, employee costs are set up on the system, so it’s easy to see the effect on the bottom line if we gave an x% salary increase to employees or bring in an extra person. The financial effect can be modelled really quickly and easily.” Martin Hepworth, Director of Cindercone
Martin confesses that Cindercone don’t use Brixx as much as they should and could. “We did find it more flexible than its competitors and it was easy to test different scenarios out. We use Sage for our P&L and balance sheet, but don’t do a lot with cash forecasting because of the way we’ve structured the business.”
Cinderone runs as a lean business and they have not needed to source finance or investment for the business, which is the point at which many business owners need Brixx software. “As a software company we don’t need to invest in physical stock. We sell our intellectual property and time which gives a different effect on the cash position. We tend to save up to fund website and marketing plans, CRM upgrade etc with our cash savings. Should we be in need of investment in the future, I can see how Brixx would be useful for showing the profit projections. If we were to sell the business, it would be great for demonstrating the potential of the business to prospective buyers.”
Considering Brixx a good tool, Martin doesn’t use it every week but when he has focussed time to think through a business idea, it’s ideal. “We use it on an ad hoc basis to model new ideas and look at recruitment. We certainly use the reports, they’re nice and you can see the modifications. Our audited account reports are done through accounting software package Sage. Brixx is great for seeing the effect on profit and loss, for example seeing the effect on cash position by recruitment.”
If there’s any change Martin would like to see in the pipeline, it’s an API to connect information between systems. “It would be great to get our actuals from Sage straight into Brixx. I see there’s a connection with Xero, so hopefully they will extend it to Sage who are one of the big players in the UK market. An API might also create new opportunities for Brixx!” adds Martin.
“Revenue is dependent on how many hours we sell, so therefore we need headcount for selling and fulfilling. We certainly wouldn’t have been able to recreate projections on Excel, it would have been such an onerous process that I wouldn’t have pursued it!” Martin Hepworth, Director of Cindercone
Having had their three-year plan knocked a bit off course by COVID-19, Cindercone are getting through the crisis and then back onto their strategy. “We want to start using Brixx for measuring and comparing actuals along with a more solid model of the business with projections for next six months. We need a growth model to measure our success on.”
On a final note, Martin says “COVID-19 has messed up our plans a bit, but we have a sweet point in revenue and numbers in mind. If you get too big, the quality of what you do diminishes. That’s not something we’ll be risking!”.