7. Fifo Capital Brisbane

Founder: Jarrod Tame

Revenue: $3.07 million

Started: 2009

Head Office: Queensland

Employees: 1

Industry: Financial

Website: https://www.fifocapital.com

Jarrod Tame had to overcome several entrenched perceptions about factoring in order to turn his start-up, now barely two years old, into a $3 million revenue business.

Tame’s company, Fifo Capital Brisbane, buys individual invoices from clients in order to give them instant, up-front cash. The system helps clients with their cashflow, particularly in the fast-growth phase.

In return, Tame takes a cut of the invoices’ value, typically 5%. He stresses that there are no hidden fees, giving customers certainty over the amount they’ll have to forfeit in return for his service.

However, although Tame says he wanted to provide an attractive alternative to the banks, many customers have had to be convinced that his business was a genuinely different beast.

“A lot of people think the product is for companies in trouble, but 90% of our customers are in the growth stage and need to spend in order to move on,” he says. “There’s not a lot of bad debt out there, but payment terms have got longer over the last 12 months and it affects the whole chain.”

“The perception of factoring hindered me in the past, and sometimes now. The biggest challenge is getting people to understand how it works. Customers would go to banks, be given lots of documents that they don’t understand, with hidden fees everywhere.”

“So, when they come to me, they wonder what the hidden fees are. I have to show them how simple it is. Traditional factoring has you signed for 12 months and is variable. I previously used the term debtor finance to set us apart from that, but it wasn’t understood, so I now say that we factor, but for single invoices.”

Tame’s fine-tuning of his business’ concept has paid off – he hit $1 million in revenue shortly after the first anniversary of the business’ foundation. Fifo targets SMEs with, typically, under $10 million in revenue.

Tame says that, as a single father, entrepreneurship has added much-welcome flexibility to his life. He does realise, however, that things will change as his one-man business grows.

“The majority of my business comes from referrals and it’s starting to snowball now – there’s a real consistency in income now,” he says. “In the next 12 months, I will have to employ staff in order to ramp the business up and grow.”

“The ambition is to grow to a larger-sized business but, at the same time, I don’t want to lose too much control. I wouldn’t want to water down that personal service. I spend plenty of time with clients to make sure they understand how it all works.”