Lifting a family forktruck business to new heights
Kirkwood Wilson Accountants has steered the financial planning of Forktruck Warehouse Europe Limited (FTW), and sibling directors Mark and Simon McClean, for more than 15 years. Over that period, we’ve helped them to lift their humble family business to the heights of a true global company.
FTW was founded by Gilbert McClean in the late 1960s. Decades’ worth of expertise, in reselling used fork lift trucks internationally, has proven a highly profitable business that has ridden the waves of economic uncertainties and come out stronger than ever.
Managing the export markets
Kirkwood Wilson Chartered Accountant, Daniel Wilson, picks up the story: “Initially, our main focus was pension planning, with a view to minimising corporation tax and boosting their personal wealth. The main barrier was stock availability. With the economy booming at that time, and the subsequent strength of the pound, sales were easy to come by but exports varied month by month.”
In 2009, when the recession bit deep for UK businesses, FTW still had a considerable surplus of stock at their disposal, thanks to the historical fleet replacement policies of large-scale companies. However, when UK sales took a downward dip, their emphasis switched to driving export sales. As the pound plummeted, forklift trucks became more affordable to a wider global market.
With export endeavours in mind, we instigated various control methods to negate FTW’s risk of losing money at the mercy of fluctuating exchange rates
Diversification leads to business growth
By 2012, the reservoir of readily available forklifts had dried up completely, as large-scale companies stalled on replacing their fleets. This was make or break for FTW. Mark and Simon were forced to completely rethink their business strategy.
“We tasked one of the directors to widen the net for stock beyond historical purchasing chains,” Daniel continues. “The other director was instructed to review current business practices to identify hitherto unseen sales opportunities. They took the advice to heart and it catalysed a renewed enthusiasm to trade throughout the difficult intervening period.”
With their stock repleted from European sources once more, FTW looked to diversify with the launch of a forklift training company. Kirkwood Wilson was instrumental in preparing the all-important projections for this ambitious new venture, before the brothers invested heavily in altering their warehouses accordingly.
“At the same time, we recognised that by splitting the new premises there would be enough capital stored in the pension scheme – thanks to a legacy of sound investments – to buy a section of the property,” Daniel adds.
Reaping the rewards with intelligent tax planning
In 2013, with an upsurge in stock availability, and the continuing growth of the fledgling training company, profits returned to an even keel. This was the perfect opportunity to complete some intelligent personal tax planning.
“As we have found with many family businesses, the McCleans were keen to address their personal situations, as well as the crucial business tax considerations,” says Daniel. “Kirkwood Wilson not only saved the family more than £12,000 in cumulative personal tax but we also protected a stream of Child Benefit income that was under threat – yet another major concern for countless hard-working directors.