We can't believe this is happening," say Charlie Nickell and Anthony Candell, two of the five co-founders of Scimitar Golf USA, which manufactures customized golf clubs. The partners are mystified by the quick growth of their company: Scimitar, which opened its doors for business last December, now books at least $1.7 million per month in sales.
In just nine months, Scimitar's owners have cobbled together a far-flung empire. First, there's the manufacturing facility in Garden Grove, California, where 150 employees manufacture custom golf clubs to individual specifications with a proprietary process known as tri-matching. Then there are the two California telesales operations (in Carlsbad and Irvine), which employ more than 50 telemarketers. Scimitar also produces a catalog that features a full line of apparel and accessories, and is launching an independent dealer network to sell clubs directly to golfers and golf pros. Nickell, an avid golfer with significant industry experience, says of the company's growth, "We don't see any end in sight."
Candell acknowledges the potential but expresses concern over the prohibitive cost of growth. "Every month, we hire new people in sales, marketing and manufacturing; we purchase increasing amounts of raw materials; and we stock more inventory," he says. That doesn't even include the side deals Scimitar has made to accommodate expansion, such as buying out the leases of and relocating its neighbors in the industrial park that houses the manufacturing facility. Although the company's cash flow is strong, with expansion at this pace, Candell and Nickell need a layer of capital so the company can catch its breath.
David R. Evanson's newest book about raising capital is called Where to Go When the Bank Says No: Alternatives for Financing Your Business (Bloomberg Press). Call (800) 233-4830 for ordering information. Art Beroff, a principal of Beroff Associates in Howard Beach, New York, helps companies raise capital and go public.