Understanding your finances: This entrepreneur’s secret to international growth

Lack of credit history almost blocked the company growth

Brady began building Tease out of her tiny Toronto condo, where she lived at the time. She was finally able to move the business out of her house four years later, in 2017.

“To be honest it was very much a side hustle creative outlet. I didn’t really look at it as much of a business at the time—it was just something I was incredibly passionate about,” Brady says.

Seeing that the company had real potential, Brady became increasingly invested in the business and started looking for growth financing, which is when she hit some significant and unexpected challenges.

Having watched a family member struggle with debt and eventually lose a family business, Brady had always been averse to carrying debt. She had never carried a credit card, and she paid for all her purchases in cash. She had believed this would make her a strong candidate for a business loan when she needed one, but when looking to access business loans for Tease she found the exact opposite to be true since she didn’t have a strong credit score.

After three very successful years growing the business, she went to her bank for a business loan—but was told she had no track record to show that she had the ability to manage debt.

“I was so frustrated. I had brought in half a million dollars in revenue with a $1,000 credit card limit, and that card was a secured $1,000 Visa—meaning I had to pay $1,000 in security to get that credit card. You can imagine how much of a logistical nightmare it was behind the scenes trying to run a business with a $1,000 credit card limit,” she says.

Mentorship helped her business take off

In a twist of fate, Brady heard that a BDC speaker was offering five-minute mentoring sessions after his keynote presentation at an event on Parliament Hill. She decided to attend the event and get herself into a mentoring session.

When she got there, Brady told him her story, focusing on her inability to secure a business loan. The executive was captivated and said he would send a BDC account representative to see Brady.

A week later the account representative appeared on Brady’s doorstep. It was a meeting that would play a pivotal role in Tease’s future success.

“She started asking me very basic financial questions about the company, which I couldn’t answer. So, she walked me through the balance sheet and explained every item line by line. I didn’t have the financial literacy skills, so she took the time to mentor me and then I was able to help paint a better picture of the company,” Brady says.

Once she had a good understanding of the company’s finances, the BDC representative told Brady she should be able to offer Tease a term loan but encouraged Brady to first go back to her home bank with the clearer description of Tease’s finances. Brady agreed, and found she was able to increase the limit on her credit card and secure a $50,000 line of credit.

“BDC has been a true partner and has provided ongoing mentorship advocacy for me,” she says.

Paying it forward

In 2019, Brady was looking to take Tease to the next level. She became very intentional about the company’s social and environmental impact.

One of her first steps was to obtain B Corp certification for Tease. B Corps are businesses that do social and environmental good, and act in ways that benefit society as a whole. Tease became the first B Corp certified tea company in Canada, offering the world’s first biodegradable tea collection.

At about the same time, Brady launched the Founder’s Fund to provide funding and mentorship to women entrepreneurs.

“We brought together successful founders who are more established in their journey and said: ‘What are you doing to pay your success forward?’. We asked them to contribute time to help mentor new women, or funding to help build a microgrants program,” Brady says.

To date the program has raised over $200,000 in funding and provided mentoring to more than 500 women entrepreneurs of diverse backgrounds.

Rebranding the business

Looking to better align with her increasing focus on positive social impact, Brady decided to launch a total refresh of Tease Tea’s brand, renaming the company to Tease in the process.

She expanded her product line to include beauty products and merchandise, which incorporated or supported her tea sales. She moved the company from loose tea, to tea bagged in specially produced biodegradable tea bags. And, she upgraded all her packaging to be biodegradable, visually pleasing and attractive to retailers.

Brady says BDC support was critical to funding the rebranding. “The launch would not have happened without BDC.”

Better cash flow management leads to doubling of sales

Carrying out the rebranding also taught Brady another valuable financial management lesson.

After securing funding to support the project, she planned to repay her loans as quickly as she could. But her BDC account representative urged her to keep cash in the company instead. She explained that the money could be better used to invest in inventory or to cover for payroll in case revenues fluctuated.

Brady says the advice not only proved correct but helped her double Tease’s revenues, while wholesale and online sales continue to rise.

“Instead of focusing on repaying the debt I focused on getting the best costs that I could for my inventory. With the access to cashflow I was actually able to lower the cost of goods in my inventory,” she says.

Since rebranding, Tease has doubled its online sales, captured 140 new retailers for Tease products.

Brady is focused on securing a minimum of 5500 retailers and having Tease products on shelves across Canada and the United States by 2024. She credits the company’s ongoing growth to its leveraging of debt to support growth.