Price increase

Finance is holding us back at the moment. Sales are increasing as planned but the business plan required an injection of cash at this point to automate the assembly line and develop multi-impression mould tooling. Our bank took a long time to agree to a loan but then only half of what was needed and I had to guarantee that personally. Once we have a year’s accounts and further proof of escalating sales this should not be a problem, but in the mean time, with the existing equipment we cannot get any organic growth to scale the business. We have introduced a few new processes to improve the product in a number of ways and this is showing in the consistency and durability of Bird2 but has pushed up costs in the short term. We have struggled to keep the price down, covering costs only in production and not factoring in advertising and marketing costs. This has squeezed the distributor and retailer’s margins still further and caused them now to raise prices. They are obviously confident in the qualities of Bird2 to warrant this increase. The original market research suggested than people would not pay good feather prices for a synthetic product. However now people have got used to the unique qualities of Bird2 they can see the justification for the premium price. Nylon shuttles have always been seen as a cheap down market product. Bird2 is nothing of the kind. It involves four completely new processes and purpose made machinery developed over 8 years and has qualities that make it an all around better product than standard nylons and superior in most respects to feathers. The extra cost to a nylon user over an evening’s play is negligible compared with the improvement in control they get from Bird2. The cost to feather users is still only 10-20% the cost of using goose feathers so isn’t an issue. With present forecast of increasing sales we will get the finance we need on our terms sometime in the new year and will then get on track with scaling the business which will allow us to bring back the prices a bit towards the end of the year.