Diary of a start-up week 2: entertainthekids.com
In the second part of her online diary, Kirsty McGregor explains her progress so far in starting up entertainthekids.com
Welcome back. If you read my blog last week on Startups.co.uk you’ll know who we are and what we are doing. So now onto a quick catch-up of how we got from the initial idea back in January, to where we are now.
Then from next week I’ll start writing about things more current, summarising the week’s activities from my daily blogs at www.entertainthekids.blogspot.com
Hope you will find this useful as a ‘fly-on-the-wall’ experience if you are thinking of setting up your own business. Not that we are experts ourselves or anything, after all we haven’t even launched yet!
Once I had the idea for the site, I discussed it with Ross who was just finishing a degree in e-business. He thought it was great too, but we needed to put some numbers down – I had no idea if it was financially viable.
The two biggest costs I thought we would have were the website development itself, and the marketing costs to promote the website address to the general public – or more particularly to our target market of parents and carers.
We drew up a shortlist of some website designers we wanted to talk to, and emailed them a synopsis and asked them to quote for the work.
We met two (two didn’t even respond!) and they came back with a quote. To be honest though, we weren’t that struck on either of them. We just didn’t feel they were our type of people. But at least we had the ball-park figures for costs.
So then we started thinking about marketing – there was really only one place for us to go in my opinion. My old employer (a chartered accountancy firm) also had an in-house marketing company (Champion Marketing), who I knew very well and really respected.
When we got talking to them about our idea in general, they actually recommended a website designer to us. They’d worked with him several times before and he also designed and managed their own site, which I knew was pretty good. Word of mouth recommendation (from someone you trust) is so much better.
So we contacted him (accsys) and asked him to quote for the work. We were impressed with his pitch (all over email and telephone, and to this day we still haven’t met him or his programmer!) and so asked him to start work.
We’d pretty much resigned ourselves to the fact that, at this very early stage, we weren’t going to get any funding from a bank or business angel, so we would have to fund it ourselves, and at the time, it just so happened that I had some surplus cash (oh those were the days!)
Of course, we’d looked at the likely costs, and I’d prepared some draft projections, and we decided that we’d never really know if this business was possible until we’d tried it. It was the right time for both of us to start a business, and we didn’t want to be always wondering, what if? So we just got on with it.
While the website and creative brand was being developed and then refined (from about April), we really started concentrating on marketing. We recognised that it was actually PR that we really needed, not just general marketing, and Champion agreed with us that we should appoint a specialised PR agency, not just rely solely on them, as they are really general marketing advisors.
Again, we didn’t have any word of mouth recommendations, so just started researching, initially through yell.com. Four appealed to me, so I put together a pack of information for them (about 4/5 pages) and asked them to quote for the PR work in August.
We met three of them, after ruling one out straight away, after a telephone conversation about fees. I was really quite insistent that we weren’t just charged a daily rate, irrespective of results, which we found goes against the grain of most PR companies.
However, we got a really good response from one particular company, so we decided we’d do a short term ‘pre-launch PR’ assignment with them. We were reluctant to commit to any longer term arrangement until we had decided if the agency we chose could deliver what they were promising.
After all, we would only get one chance at launch. We had quite a few pre-launch PR ideas for them, but we really didn’t get the supportive response we were hoping for.
In the end we decided we should just try to do this early PR work ourselves, after all we had the ideas and the enthusiasm, and we would do as much as we could with virtually no budget.
So this is what we have done so far, and the results we have already achieved ourselves:
- Approaching celebrities (via their agents) with children for an endorsement – Result: Kym Marsh provided us with a quote
- Approaching the monthly parenting magazines for a chance to show them our idea (not the fully functional site) with a view to building a relationship with them in readiness for our launch – Result: We met two magazines whose editors are now waiting to review the site in January, and we have made personal contacts with several others
- Asking my son’s nursery, and begging our old primary school (about 10 times – you really have to be persistent!!), to allow us to carry out some market research on their parents – Result: 320 questionnaires distributed, nearly 20% returned, all very positive and they proved we have priced the product accurately
- Writing a blog and getting it published by a business magazine – Result: You’re reading the results!
- Entering the inaugural Manchester Evening News Venture Award for young (!) up & coming entrepreneurs – results next week!
Then just as we were getting into the swing of this PR lark ourselves, we heard back from another agency who had just been too busy with work, holidays etc, and hadn’t managed to get back to us.
We really liked their ideas, but were quite concerned about their lack of resources. So I tried the same tack of a short ‘pre-launch’ assignment, and they would be paid on a results basis.
However, they decided to make us a counter-suggestion and asked us if we’d be interested in granting them a shareholding in our business, instead of us paying them fees.
Well, that made me sit up and take notice! They were really excited about our business, and wanted to be part of it from the beginning. Because they were a small business themselves, they could be flexible with arrangements like that, which meant that we could benefit from their expertise and use our limited funds for other things, such as more adventurous promotional work.
Around this time, September, we decided we were going to try and approach the banks, because I felt that we had done enough, shown sufficient personal financial commitment, and had a good enough proposition for a bank loan.
It’s amazing though how, despite your self-belief and expert knowledge in a particular area (my background was raising finance for small firms!) you begin to doubt yourself when you are dealing with your own business.
I wrote a fantastic business plan (even if I do say so myself!) and enclosed three sets of projections, worst case, most likely case and best case, and we submitted it initially to three high street banks (HSBC, Barclays and RBS).
HSBC and Barclays turned us down, both really due to the same thing – it was too speculative for them. However, RBS finally met with us, and lo and behold, agreed to provide us with a loan, that was pretty much on an unsecured basis- not quite as much as I’d requested, but I wasn’t arguing!
It’s typical that once again, they were the last to come back to us, due to holidays and workload, so we’d almost ruled them out, and I was about to change the business plan slightly, and approach another three banks.
So there we have it, (kind of) in a nutshell!
The only thing I haven’t really told you about yet is how we are getting the content entered into the site, and who the other members of our (now growing) team are.
We have done some great work on setting our short, medium and long-term objectives, and we are communicating it around the team, so I’ll explain that as well.
More next week, along with the results of the MEN Venture Award. Eeek!!