Case Studies

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Leeds beauty manufacturer

Company profile

Sector: Beauty & personal care product manufacturing
Turnover at initial engagement: £4.8m
Employees: 28
Manufacturing model: In-house formulation, batching and packing, with selected outsourced components
Customer mix: Direct-to-consumer, wholesale, and selected retail contracts
Initial engagement: Commercial finance brokerage
Extended engagement: Business and financial consulting (12 months)

 

The initial challenge

This UK-based beauty manufacturing business had strong market demand, a recognised brand, and clear ambitions to scale.

The directors approached Ellcado Finance to raise growth funding to increase production capacity, invest in additional manufacturing equipment and support working capital as volumes increased.

At £4.8m turnover with 38 employees, the business sat squarely in the SME growth bracket where external finance should have been achievable.

However, once the business was prepared for lender review, several structural issues became clear and lender saw some risk:

  • EBITDA didn't meet the lender's requirement

  • Gross margins varied significantly by SKU, with several high-volume products destroying profit

  • Cash was locked in stock and work-in-progress

  • There was no reliable 12-month cash flow forecast

  • Management accounts focused on revenue growth rather than profitability and cash generation

Despite lender conversations and submissions, funding was declined.

 

The decision to change direction

At this stage, rather than pushing unsuitable finance or forcing a marginal deal, the directors decided to continue working with Ellcado, shifting the engagement from finance brokerage to consulting. The objective changed from top to bottom (funding to grow) to bottom to top (rebuild the foundation).

 

The transformation

Over the next 12 months, Ellcado worked closely with the leadership team using a CRO-style consulting approach focused on control, visibility, and disciplined execution.

 

1. Financial acknowledgement

  • We rebuilt management accounts to show true contribution margins by product line

  • Introduced EBITDA, operating cash flow, and working capital tracking

  • Identified SKUs that were profitable on revenue but negative on cash

Impact: Management gained a clear view of what was driving and draining performance.

 

2. Margin and pricing discipline

  • Reviewed pricing against rising formulation, packaging, and labour costs

  • Removed or re-priced loss-making SKUs

  • Introduced minimum margin thresholds for new contracts

Impact: Gross margin stabilised and EBITDA became predictable rather than accidental.

 

3. Cash flow and working capital control

  • Implemented a rolling 12-month cash flow forecast

  • Reduced excess stock and improved production scheduling

  • Strengthened credit control and customer payment terms

Impact: Operating cash flow turned consistently positive.

 

4. Governance and decision-making

  • Introduced monthly performance reviews tied to financial KPIs

  • Linked operational decisions directly to cash and margin impact

  • Shifted leadership focus from “top-line growth” to “profitable, fundable growth”

Impact: The business moved from reactive decision-making to controlled execution.

 

The results

After 12 months of consulting:

  • Turnover increased 

  • New people hired

  • EBITDA improved 

  • Operating cash flow became consistently positive and forecastable

  • Funding secured