We opened in the last week of August 2017, only 4 weeks after picking up the keys from our landlady. This was our first attempt at launching a new small business. At the time of writing we will have been open for 9 months and running a business which is stable and operating smoothly and now even trades online. We believe we did what we set out to do and we’re very happy with what we’ve achieved. I have worked for large businesses running multi-million pound IT outsourcing contracts but I hadn’t started nor run a small business before. We think we were successful mainly because we put a lot of focus on up front planning. If I was to give advice to another start-up, here is some guidance and insights based on how we approached this “project” and what we learned along the way.
Have a clear visionWhen we viewed the property on Market Street in Hebden Bridge we had a very clear picture in our heads of what products we wanted to sell, how the shop would be laid out, what experience our customers would have. Having that clear vision enabled us to articulate it repeatedly to family, friends, potential customers, suppliers, neighbouring businesses etc. No vagaries. I think our vision provided us all with clear focus and goal.
Ooze passionLeading on directly from the previous point, we all very quickly got behind the vision. I’m passionate about many of the things we sell. I own more kites than anyone I know and many have come and gone over the years. Same applies for lots of the gadgets and toys we sell. That passion is now shared by everyone who was involved in setting up and running the business. You’ve got to have passion, especially as a business owner. We’re passionate about what we do and passionate about Hebden Bridge and passionate about spreading our infection fun. Lisa was formerly the manager of a busy school kitchen and I worked in IT for 30 years, so for both of us to give up our comfortable careers was a massive leap of faith. Without the passion and enthusiasm we could easily have floundered.
Find a Niche and have a USPIt’s often said that Hebden Bridge has a lot of cafes but doesn’t mean there isn’t room for another. So long as it has a unique selling point. In fact, back in the summer one of the ideas we toyed with was a Bistro but settled on our current venture. We knew that there was nothing in the area that did what we were planning. In fact I know of only a few stores like ours in the country. We knew there was a gap in the market. We knew this would be something different. Lots of kids (8 to 80) often get “dragged” around Hebden Bridge with often not enough to keep them interested. We feel we found our gap. In fact, every week someone walks into the shop and says “This is just what Hebden Bridge needed!” or “I can’t believe nobody has done this before!”.
Complement local businessesAlong with the niche, we felt it was important to not directly compete with local businesses but to provide products or services that work well alongside them. Talk to them about what you intend to do if you feel there may be any potential for treading on each other’s toes.
Do your researchWe talked to potential suppliers before we set up the business and talked them through our vision and got lots of good advice. One recommended we paid a visit to a store in York which had a similar theme to what we were planning. So we did and I introduced myself to Mike the owner and talked about my plans. Because we’re far enough apart Mike was kind enough to share some of his experiences over the years. One of the most important pieces of advice was “Don’t buy what you want, buy what they want.”, he said, pointing to folk on the street.
Know your customersThat’s where your money’s going to come from so you need to understand who they are, where they are and their behaviours. We knew that there were Hebden Bridge locals, several schools, tourists and the park and skate park nearby. All of which would be sources of our customers.
Have detailed planWe targeted opening 5 weeks after collecting the keys. We actually opened in 4. We wrote down pretty much everything we could think of that needed to be done before the shop opened. We worked backwards from the planned opening date. Our plan, which was just hand written in a notebook, included:
- Setting up a legal entity ready to trade:
- Getting an accountant.
- Registering the company name.
- VAT registration.
- Setting up a bank account etc
- Refit from a former café
- Dismantling and removing the the bar, fixture and fitting.
- Planning, designing and implementing the new layout and shop fitting. We built, borrowed or repurposed nearly everything.
- Repairing, cleaning, painting, preparing etc
Stock – It’s harder than you think!
- Work out what you want to sell.
- Identify distributors and wholesalers.
- Apply for trade accounts.
- Request samples. catalogues, online accounts.
- Talk to people about your proposed product offering.
- Utilities and everything else.
- Gas, Electricity, Water need arranging – Don’t just go with the encumbent supplier. That was a big mistake I made until I realised that my electricity tariff was twice what I could get with a quick search on uSwitch! It took months of wrangling including threats of involving the energy regulator to get a fair rate.
- Insurance (Business insurance, Public Liability Insurance, Indemnity Insurance. Which will your business need?
- Internet if you want / need it. We have a laptop in the shop for ordering new stock and the card terminal needs either a phone line or internet. We also now trade online so need to be able to add products to the web site and process orders.
- Phone line. Obviously comes with the internet. If you don’t need the internet will your personal mobile number be good enough for you?
- Card payment terminal and merchant account. Pick the right one for you not the cheapest. If you want to sell online in the future not all merchant accounts have that facility.
Meticulously plan you finances
- We set a budget for:
- Fixed costs (rent, utilities, lease, wages etc for the first 3 months)
- Set up costs (removal and refit costs, costs of fixtures and fittings)
- Cost of stock
- Build a forecast. In fact build 3. Worst case, best case and likely case. I worked on the basis of, if in the first 3 months we didn’t sell even a sausage, we could still pay wages, rent etc. In my opinion, if you can’t fund the worst case scenario then think again. We used our own money but if you need a loan the bank will need a business plan.
- You’ll probably find no one will give you a credit account so everything needs to be bought up front. This was actually a good thing for us because I didn’t want to have pockets of debt going unnoticed so preferred to pay for everything. Now that the business is stable we do tolerate a bit of credit but I prefer the bank account to reflect the true cash the business actually has.
- Set up a system for how you’re going to manage ongoing finances. We know what we need to do in the morning, during the day, at the end of the day, end of the week and end of the month. We have a system which we keep up to date and deal with things immediately. We have the mother of all spreadsheets where we record:
- Inventory. The stock we hold.
- Stock we need to order.
- Sales are recorded every day.
- Invoices we’ve received and if we have paid them or not.
- Bills, charges, wages etc.
- Ultimately, how much cash the business has.
- And much more.
- File everything. My accountant said that we have the best organised filing system he had seen. Alphabetically organised, individually labelled ring binders with artifacts filed chronologically. It takes the stress out of running the business.