case study – Working Knowledge
Splitting a business in two and raising additional funds
Background
Working Knowledge bridges the gap between education and the work place. It works with further education colleges and universities to prepare students for the workplace and, until recently, also worked with corporate clients to reinforce business knowledge and refresh business thinking of employees. WK became F-works’ first client in 2007.
The issue
Education sector and corporate sector clients have very different cultures and requirements, which WK found difficult to balance within one organisation. It was proving difficult for the same WK team to grow both sectors together. As a result, in 2010 the directors decided to split the business in two (creating a new company for the corporate sector). This had an additional benefit of enabling WK to become a social enterprise and access a new source of funds to increase the rate of education sector growth.
How F-works helped
F-works were already acting as part-time finance director (attending management meetings and helping to challenge and shape decisions) and therefore had an in-depth knowledge of the business.
Splitting a business can be a complicated process. F-works provided the necessary expertise to ensure financial aspects of the business (including accounts production, banking and payroll) were split appropriately, whilst both parts of the business continued to run smoothly.
At the same time as splitting the business, F-works helped WK change its share structure and secure loan finance of £70,000 from a social enterprise investment fund. This required producing financial forecasts and attending meetings with WK’s senior team and the fund to explain the financial future with, and without the investment.
The next stage is to raise another similar amount of funding and F-works will again provide the crucial finance expertise needed to achieve this.
“Our decision to work with F-works was based on both a general lack of financial knowledge and a desire to have additional help at a strategic level. They play an excellent role at our management meetings – acting as an external ‘voice of reason’ and helping to keep things on track. They were a huge help in splitting our business. Without their objectivity and sensitivity at an emotional time for the directors, we may not have achieved what we knew was right for our business. They’re nice guys to deal with and you really feel like they’re part of the team.”
James Lott, Managing Director
Working Knowledge
