To deal with the “boom or bust” factor in the mining industry, mining service businesses need to be backed by finance facilities that help them to ride out the troughs and take advantage of the peaks
SME business owner Neville Bartels is well aware of the cycles that dominate the mining industry – he created his business five years ago during the mining downturn.
His plan was to take advantage of the availability of so many experienced mining workers (himself included) who were being made redundant.
“Starting a mining labour hire business in a downturn was challenging to say the least, but if you can survive then it stands you in good stead when business conditions improve,” he says.
BNF Group provides specialised labour for the mining and engineering sector, placing managers, engineers, fitters, electricians and other specialist staff into longwall, pre-install, install, rebuild and servicing projects.
He says in the beginning BNF stood for “Big Nev Fix”, but the initials now represent “Bartels N Family”. BNF Group has matured into a successful family-owned business servicing mines including Kestrel, Moranbah North, Grosvenor and Broadmeadows.
“Teamwork makes the dream work”
Neville’s business motto is “teamwork makes the dream work”. This motto also fits his relationship with SME financier Scottish Pacific, who provide BNF Group with Selective Invoice Finance to help fulfil its growth strategy.
“When I started out, I bore the financial burden of funding the business. This was not sustainable if we were to grow,” Neville says.
“Luckily, in the early days our accountant suggested that as a start-up we could benefit from debtor finance. It was very sound advice.
“I researched debtor finance, found Scottish Pacific on the internet, and they talked about how Selective Invoice Finance might suit us. We were able to get things happening very quickly.”
Having a solid relationship with Scottish Pacific has given BNF Group the security to target growth of 30 percent for this year.
“In mining it’s either famine or feast. At any one time I can have six blokes or 60 on my payroll, and that’s why Selective Invoice Finance works so well for us.
“A client might need 20 or 40 roles filled immediately, and we have to be ready to provide payroll for them all. Selective Invoice Finance gives us the security that wages will be covered until client invoices are paid.”
The Queensland-based business has the confidence now to start branching out from labour hire. BNF Group recently secured sole distribution rights for a dust suppression agent in Queensland and the Northern Territory as well as parts of NSW.
“I’d recommend Selective Invoice Finance for start-up businesses. It’s the way to go, if you are not afraid to sacrifice a small part of your profit to gain larger profit,” he says.
“Really, the cost can be factored into your pricing, and the product used to drive growth.
“I plan to have Scottish Pacific as part of my business for as long as I’m in labour hire. Their team is so accommodating, they do so much for us and we’ve never even met them face to face.”
Neville, a field service engineer by trade, is philosophical about whether invoice finance is an expensive way to fund a business.
“Some might look at it as ‘expensive money’, but without that money I wouldn’t be in this business. It’s only expensive in isolation, not if you have the foresight to look at the big picture of the business.
“I was working as a rebuild manager for a large mining services company when the 2012 downturn hit and, like many other skilled workers in the industry, I was made redundant.
“After a successful patch contracting out my own services, I saw the business potential for skilled labour hire and so I created BNF Group.
“As a start-up, if I was going to the bank and asking for $250k to cover regular wages bills they’d look at me like I was mad.
“Strategically using Selective Invoice Finance has allowed me to operate a very profitable business,” he says.