In 2007, Rachel Watkyn, searched for recycled packaging for her range of ethical and fair trade jewellery and accessories. Rachel thought this would be easy. She was wrong. What she did find, after months of research, was that there was an extremely high demand for recycled and ethical packaging but no one to meet that demand. Nearly twelve years later, Tiny Box Company has over 700 products in stock and has over 40,000 customers, ranging from one-person jewellery designers to international corporations.
Rachel is always aiming to help and support those going through the same difficulties and struggles she, herself had. So below Rachel talks about all the questions she herself asked and has been asked ever since.
Can I actually do this?
Firstly, if you think you can’t then you probably can’t! If you think you can, then at least you are starting with a positive mindset. One of the most important starting points is having a clear vision of where you want to be. It goes back to the famous line in Alice in Wonderland - “Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to get to." "I don't much care where –" "Then it doesn't matter which way you go.” If you are clear about where you would like to end up (a Richard Branson tycoon for example, or a lifestyle business that pays the bills but works round the children) then you can start paving a path to get there.
Should I actually do this?
It’s very easy to go into setting up a business with blinkers on. The harsh reality is that setting up and running your own business will mean sacrifices. Even if long term it means you can work around the kids and the chores, in the short term you are unlikely to be able to do that successfully AND bring in the money you need. Are you in a position to sacrifice time and / or money in the early stages? Do you have the support (financially and emotionally) to help make your dream a possibility? Setting up on your own can be a lonely journey, so if you need reassurance from other people, then make sure you have that network.
Should I go alone or find a partner / partners?
One of the painful truths about running your own business is that you have to be really honest with yourself, about who you are and what your core strengths and weaknesses are. If you dig deep and are honest with yourself, can you shoulder all the responsibility when things go wrong? Are you used to being in charge and struggle with compromise? Do you need motivating or are you a self starter? Are you purely a creative who needs someone else to do the organising? If you decide you are better off with a partner, then think carefully about what you are prepared to give up in order to have a partner (not just in shares of a company, but also authority). Having 2 partners cost me 40% of my business. Would you be prepared to sacrifice that?
Where do I start?
Obviously the first step is to work out what product / service you want to sell. Once you have identified your offering and decided who to work with (if anyone), the next steps are to create a detailed business plan. The amount of people I have spoken to who skip this step makes my eyes water, but how do you know how much money you’re going to need, and how much time if you don’t know who you are going to sell to and when. Where will those customers come from? If you think you can just create a website and customers will flock to it, you are in for a rude awakening. There is no such thing as overnight success. It takes years of planning, even when a success appears to be overnight. How will you advertise / market your product or service? Who is your ideal customer? What are their likes / dislikes? How much money are you going to have in the bank each month going forward? Who is going to do your accounts? Your Business Plan should mirror your long term goals that you laid out in question 1 above.
What prices do I charge?
This is one of the most difficult questions, especially when offering a service. Women are notorious for lacking confidence and undercharging as we undervalue ourselves compared to men. The starting point is to look very honestly at your product / skill set you are offering, and benchmark against other people offering a similar service or product already in the market. But you have to be objective. If you are a new wedding photographer who has never been to college and have only done a couple of freeby weddings for mates, then initially you cannot benchmark yourself against established photographers with qualifications and / or years of experience. But if you are a PR Consultant that has been offering PR services for years through another business but are branching out on your own, then absolutely you can charge the going rate and shame on you if you don’t! Once you have an idea of the going rate, then check your costs stack up and make the going price workable. I worked with a business recently that had looked at the competitor products, worked out their costs and concluded that yes, they could make a profit by charging similar prices. What they hadn’t worked out was that the competitor prices included VAT and theirs didn’t. Once they added in 20% for VAT their offering was no longer competitive and they had to go back to the drawing board.
Should I hire a business consultant / mentor?
Tread with caution. Whilst there are some very qualified and experienced business consultants out there (and we can put you in touch with some if it helps), there are also a lot of consultants out there who either failed at running their own business or who have been successful in a large corporate environment and think they are now qualified in the small business sector. If I had listened to business consultants then I would never have set up Tiny Box because apparently according to a couple of “experts”, there was nothing unique about what we were offering. More alarmingly, I recently spoke with a lovely lady who had followed the advice of business consultants which ultimately cost her her business. Often an alternative route is to find one or two people in the business environment that you admire and respect and ask them if they would mind mentoring you in exchange for tea (or whatever bribe they are likely to succumb to, mine is Clipper tea bags!). If however, you have big plans and need the advice to get investor ready, then experienced reputable consultants can be a god send.
Should I join a networking group?
Personally I have always been very wary of networking groups, but I know that they have worked very successfully for other people / businesses. But it’s about knowing your audience. If you are selling meals on wheels to the over 80’s, then your local gentlemens’ business networking group may not be the most beneficial. However, looking at the bigger picture, most people have elderly relatives or know people who have elderly relatives. You never know who might be interested. A young (very attractive) yoga instructor who had just branched out on her own was invited to a networking evening, and contacted me to ask if she should go. I said the same thing – that you never know who you might meet. She said the evening was horrific with no target audience at all and I don’t think she has forgiven me yet! But Duncan Bannatynes niece may have been there and knew that his fitness centres were looking for new instructors. I actually met my first business partner in a shop. He was out looking for a box!
What do I need to know that I don’t know about setting up a business?
There are so many rules and regulations out there that it is impossible to cover them here. But the first rule is, if you don’t know accounting or bookkeeping, then find one even before you are ready to trade. They can save you a fortune by helping to avoid costly mistakes. Secondly, make sure you have the relevant insurance. Even if you are selling products online, you need product liability. The amount of small businesses that don’t have this is staggering, but what if someone has an allergic reaction to your product? Start off with something simple like Direct Line
. If you are offering a service, such as advice of any sort then you need to make absolutely sure you comply with any governing bodies and have the relevant insurance cover. If the company is just you, then you can start as a sole trader without any lengthy set-up costs, but again, speak to an accountant before you decide. A fellow business we work with set up as a sole trader and then ended up with a huge tax bill which would have been significantly lower if they had set up as a limited company. You’ll need a business bank account! Sounds obvious, but it’s essential to keep your personal money separate to the business. If you are thinking about employing staff, first evaluate if you really need them or would you be better outsourcing the bits you can’t do, to free you up to concentrate on the bits you can do well. If you decide that you really do need staff then ACAS
are a great resource which are free of charge. You will need contracts of employment and clear job descriptions but thankfully ACAS offer a whole raft of templates free of charge. You will also need to comply with the latest Health and Safety regulations (my personal pet hate!) but this website
again, provides lots of templates and advice and best of all, its free!
How do I respond to negative feedback?
When I started Tiny Box Company, I lost count of the number of people who told me the business would fail. Some people genuinely thought they were being kind and helpful, preparing me for my inevitable demise. Others simply wanted to rain on my parade. I haven’t managed to speak to a single entrepreneur who hasn’t experienced the same negative feedback. The art of a successful entrepreneur is to listen, thank the naysayer for their comments, learn from anything they say if you haven’t thought of it already, and change course if necessary. If you’ve done your research however, the chances are you know a lot more about your subject than those busy critiquing your business. When I started, I had a group of business consultants saying my business would never work because I didn’t have a “Unique selling Proposition”. I listened and then asked how I should change my business to offer something more unique. The Business Consultant simply laughed and said if he knew the answer he would be running his own successful business and not sitting here advising me. If I’d taken their comments on board, Tiny Box would never have started and would never have employed the 70 staff that now make up the fabulous team, and who look after all the wonderful customers we now have.