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BDC and Pearl Fever Tea House: Creating a solid foundation

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BDC and Pearl Fever Tea House: Creating a solid foundation

Vancouver-area Pearl Fever Tea House was off to a good start after opening its first Asian-inspired bubble tea café in 2002. The company soon expanded and sustainability became a growing concern.

The business hit a snag as a result of a sharp economic downturn in 2010-2011. Two new locations had opened in 2009, and operating expenses were on the rise. Overhead expenses were eating up cash flow and company profitability had dropped significantly.

“We were running the business blindly and hoping to turn a profit,” explains Director Hank Cho. In need of assistance to get the business on track, the company turned to BDC consulting services.

The consultants helped the company tackle its financial and marketing weaknesses. A strategic solution was provided to address financial management issues and recommendations on how to improve the company website were implemented. As a result of the consultants’ support, the business was able to accurately forecast income and cash flow and succeeded in reducing its debt-to-equity ratio.

Once the company was on more solid financial footing, BDC provided high-leverage realty financing with flexibility that enabled the company to purchase a new location.

Within a year of BDC’s consulting project, the company had increased operating profits by 205% and had generated positive net income for the first time.

“With BDC’s consulting and planning support we now run our company with knowledge of the financial targets we are going to achieve,” says Cho.

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