Baby Squids

Payments? They’re going swimmingly! 

Baby Squids is a franchised swim school that teaches two and a half thousand children to swim each week.

“The dream we're selling, and living, is that you can make your business fit your lifestyle,” said Laura Skilton, Founder, Baby Squids. “All of our 14 franchisees are parents with children looking for the ideal balance between flexibility and earning potential, and some have bet big on us by swapping careers.” 

Laura decided to move to a franchise model when the business grew to about 400 customers and managing operations like payments became a job in themselves. As it turned out, swapping manual Bacs payments for automated payments from GoCardless proved to be a major turning point in Baby Squids’ growth story.

Unbearable admin

Baby Squids built its own booking and management system – Laura’s husband and fellow director, Martin, is an experienced developer – but it initially invoiced customers in a separate process.

Eventually, the time spent reconciling payments, identifying and chasing late payers, became unbearable and a barrier to growth.

“When the onus is on people to manually make payments there are inevitably late payers or those who just forget – they’re busy parents with young children, after all,” said Laura. “That meant I spent my evenings tediously comparing online bank statements with our own systems, to see who had paid and who needed chasing .”

Payments were entirely on payers' terms, with no commitment to make the next payment and no predictability on timeframes for Baby Squids. This made it extremely difficult to predict demand and forecast cashflow, with many people disappearing between terms without telling Baby Squids they weren’t re-enrolling.

50 hours of weekly admin, axed

By integrating GoCardless with its booking platform and switching to a subscription model, Baby Squids now has an automated collections, reconciliation and re-enrolment system that saves on admin, improves revenue and safeguards cashflow.

“GoCardless notifies customers that their Direct Debit is due, which prompts them to cancel in advance,” said Laura. “That provides more time to market empty places to our waiting lists. And instead of chasing customers for payment or matching payments in spreadsheets, franchisees can do something more enjoyable like leisure time, time with the family, or growing their business.”

GoCardless saves average-sized franchisees at least 10 hours a week of payments admin. As Laura discovered, however, those time savings can quickly scale as the business grows.

“GoCardless saved the main Baby Squids business 50 hours a week of admin,” she said. “That meant we could reduce our costs, and our admin team can now focus on other projects like marketing and social media to drive organic growth. It’s clear that if we hadn’t introduced GoCardless when we did, we wouldn't be five times bigger today.”

Amazingly low failure rates

GoCardless provides Baby Squids with an ultra-predictable cashflow, which can be measured by both low payment failures and chargeback rates.

“There were just five failed payments in our last re-enrolment – that’s 0.2%, which is amazing – and we've only ever had three chargebacks,” said Laura. “I've got absolute confidence that when GoCardless says we’re collecting ‘X’ amount on ‘Y’ date, that’s exactly what we’ll get.”

Since GoCardless was integrated into its booking platform the customer experience is noticeably better, too.

“We’ve now got a seamless online booking and payment process,” said Laura. “And there was no churn moving people over to GoCardless, probably because it’s so easy – it’s as simple as clicking a link.”

So good, they’ve used it twice

Laura and Martin have launched a second business called Restless Kids, which makes a version of their class management system available to the wider children's activity sector. After their experiences with Baby Squids there was only ever going to be one payment partner.

“Restless Kids is a listings site for children's activity businesses and a platform for managing class bookings, payments and automated re-enrolment,” said Laura. “After the impact we’ve seen, of course we were going to use GoCardless for payments. We’re excited to help other children’s activity businesses benefit from the same admin-busting, growth-boosting recurring payments functionality that we have.”

They’ve also opted to include Instant Bank Pay for QR-code-initiated one-off payments.

“Direct Debit takes about seven days to clear, so Instant Bank Pay is a great solution for collecting customers’ first payments, to instantly secure that revenue,” said Laura. “The QR code function takes users straight to their banking app so it’s perfect for mobile, which accounts for 92% of our site’s visitors.”

Diving into growth

Thanks to GoCardless being firmly established as the payments heart of Baby Squids – “99.5% of our money is collected by GoCardless,” said Laura – the company is now targeting a period of ambitious growth.

“We’re looking to add at least 5-10 franchisees every year and want to be teaching 10,000 kids a week within five years – that’s four times where we're at today,” said Laura.

“GoCardless will be key to that growth because people never ask for any other way to pay. There aren’t any drawbacks for us and we know it will only get better because GoCardless continues to innovate.”