Challenge: Create a consultancy business based on paying and managing contractors without any liquidity.
Solution: Specialist funding and tech.
Result: Successful business created with revenue expected to double from year one.
By any measure, Core Consultants is a smash hit success. Founded in 2019 the company builds teams of consultants for blue chip clients in the data and business transformation fields. It employs 50, with a handfull of full-time staff, but most being contractors per project.
The firm has spawned a sister company called Xander Talent with hundreds of employees.
For co-founder Steve Hampson a key to this rapid success is Sonovate. “When we founded Core Consultants we were brand new,” he recalls. “We had no trading history and had no access to funding. If it hadn’t been for Sonovate we wouldn’t have gotten there.”
The idea for the business was strong. Core Consultants finds consultants in esoteric technical industries such as data modelling, UX, and analytics: “We locate very hard to find niche experts, for banks or consultancies. Our contractors specialise in really complex work.”
“My partner John Hall used to be my boss at KPMG,” says Hampson. “He was Global Head of Data Analytics for Banking and I was UK lead for capital markets data. I said to him, ‘Why don’t we try build a company like this for ourselves?’ He was crazy enough to come with me.”
Funding growth wasn’t easy
The expertise of the pair meant winning contracts was achievable. But funding growth would prove harder. The company needed to wait for invoices to be settled – and hope none came in late.
“Banks wouldn’t do our funding to begin with. They’ll only work with companies of a certain size and a trading history, which obviously takes time. It doesn’t work if you are a start-up.”
“Today we spend £350,000 a month on salaries and contract payments, which is really significant. Essentially, this approach freed up loads of working capital that we could invest and expand, which was awesome.”
Alternative finance was the only way forward
“We evaluated a number of options,” explains Hampson. “Sonovate offered the best deal in terms of rates. It was also possible to get funding when we only had one client. Other providers might have struggled with risk concentration, but Sonovate wasn’t bothered about that. Overall, the funding conditions were the best on the market at the time.”
Working with Sonovate optimised the cash-flow. Invoices are settled rapidly, often at the end of the week if a timesheet was filed before noon on Tuesday. “We didn’t need to save up loads of cash to pay people.
Today, trade is stronger than ever
Core Consultants made use of the admin assistance provided by Sonovate. “We initially started with the regular platform to manage back office stuff,” says Hampson. “There were only a few of us back then, so we didn’t have the staff to handle it all.
Sonovate’s platform did work really really well. And then we moved into the Sonovate Capital platform, which allowed us to upload invoices and dispatch them.”
Settling invoices on time, or early, ensures contractors are paid in full and on time.
The funding support provided by Sonovate helped Core grow from start-up to a respected industry brand. The strong performance metrics allowed Hampson and Hall to sell both Core and Xander to JCW, a global talent and recruitment group. Hampson and Hall continue to run the company.
Today, trade is stronger than ever. Hampson says his experiences illustrate the power of embracing fintech and alternative finance providers. “There are so many new things out there,” he says. “A lot of us are using Pleo cards for expenses. They are so much easier to use than doing manual receipts and reconciliation. There are companies like Receipt Bank who scan receipts to make life easier.”
Whether you have a start-up or simply want to grow without tying up cash-flow, an alternative provider can be a life saver.
“There are so many services, and great technology, which can make your company more efficient and agile. If you only stick to high street banks you are missing out.” Concludes Hampson.