Gotchathis.com: Lee Scott
24-year-old Lee Scott is following his entrepreneurial dreams with Gotchathis.com, his own gadgets retailer
Name: Lee Scott Age: 24 Business: Gotchathis.com Type of business: Online Retail Start date: June 2006
When did you first decide you wanting start your own business?
I have always wanted to start my own business; working for myself was always something I considered very rewarding. The way I saw it was that I was working hard for an employer and helping them turnover a profit, so if I worked for myself I would work even harder and hopefully put the profit in my pocket.
I knew I had to be financially secure before I could fund the growth of a new business starting from nothing. So when I was in that financial position, I took the plunge.
Tell us about your business
Gotchathis.com is the place to shop online for some of the coolest gifts, gadgets, games, and stuff around. We have an extensive range of gifts and gadgets online from the latest crazes in Japan and the US to things you’ve never heard of.
All of our gadgets and gifts are tested by us before they go onto the site, because we figure if we don’t like them, chances are other people aren’t going to like them. After all, we are young lads who love gadgets too. We also run competitions throughout the year to win iPods and other items.
Was it your first business idea and where did it come from?
This is the first business idea I have actually backed, I think I come up with a new business idea every week, but it’s having the guts to throw your hard earned cash at something you believe in.
Most business ideas don’t get off the ground because of a lack of belief. I bet anyone reading this has had an idea, which could have made millions, but have dismissed it as being silly, because they believe if they can think of it anyone can.
This is not always the case – believe in yourself and back a good idea.
Was your decision to start a business inspired by any other companies or individuals?
I suppose I would be stating the obvious but I think anyone who starts a business has to be inspired by the likes of Richard Branson and Alan Sugar.
Everyone has heard of the success stories from huge companies starting from a basement or bedroom and making millions. I think their success stories have always been at the back of my mind.
What makes you think there’s a market for your business?
With peoples’ lives getting busier all the time they are turning more and more to online shopping.
Online shopping sales are increasing year on year by a vast amount as well as the amount of people who have access to the internet. People also love gadgets; they just can’t get enough if them, so we have brought the two together, online shopping and gadgets.
Our site offers a wide range of gadgets for everyone. Gadgets for boys, girls, the home, outdoor life and much more. There really is something for everyone as well as gifts for days out and once in a lifetime experiences.
Once you’d decided to start a business, what did you do first?
I started planning and making notes about what I wanted from the business, what I wanted to sell, how I wanted to sell it and the image I wanted to put across.
I sketched out a layout of the website and thought up names, started looking at what the competition didn’t offer and how I could give something more from the website than the others out there, and make the customers feel like they have been looked after and they were getting the best value for money.
What research did you do?
Knowing your competition is key – keep your friends close but your enemies closer. We visit the websites of our main competitors all the time. Know what they provide and how they differ from you and make sure you have one or even better two unique selling points. So when people ask why should I buy from you over Joe Bloggs, you can hit them with your first unique selling point, and then back it up with the second to really inspire confidence. What advice did you seek?
I went to a couple of seminars and exhibitions run by Business Link, which were very helpful. They had a number of guests at the exhibitions such as government departments to give advice on things like tax and VAT.
Also the Institute of Marketing were there to speak to along with lots of other companies. One of the other advantages of the exhibitions were the “role models” who had been invited. They were people who had been there and done it; real people who have started up in business and made a success of it. So it was good to draw upon their knowledge for free.
What other help did you get?
No official help really, I had a lot of help from friends and family to test run the many versions of the website and offer advice on products they would like to see on the site. I also used some independent non-biased people to test run the website and offer their views on what items they would like to see on the site.
Does the government need to provide more help to people trying to start a business?
I think they do yes, with regards to more available funding for new businesses. I applied for grants for advertising and marketing but wasn’t able to receive one because I was in full time employment, our geographic location didn’t help and the fact that I wasn’t earning over £50,000 per year!
Why I would need a grant if I was earning over £50,000 per year I will never know, but I found the money from my own pocket and funded it with that. I believed I could succeed, so was prepared the risk the cash.
Talk us through the process of writing your business plan.
Business plans – a daunting experience for anyone just starting out in business; though not as bad as tax returns! It’s important to be methodical when writing the business plan. You should be able to write it from beginning to end without having to think about it. If you have to think about it too much then you don’t know your business as well as you perhaps should. If somebody asks you a question about your business you should be able to give the answer instantly with no pause. In essence a business plan is just a questionnaire about your business, so it should be easy. I found I struggled with the first draft of the business plan. But as I grew I got to know the business better and kept on rewriting my business plan and including more detail. I think it’s important to keep the original business plan, and save subsequent revisions as separate files, i.e. business plan revision 1, revision 2 etc. Then you are able to see where you have come from and what you have achieved. I didn’t use any specific software but I downloaded one of the many freely available templates on the internet to use as a starting point.
How useful has your business plan been and do you think you’ll stick to it as your business begins to grow?
Having a business plan is crucial, whether you are looking for investment or not. Its basically a dummies guide to your business, anyone should be able to look at your business plan and have a clear view about what the business is about and where you are heading. I know my business plan will continue to be useful as my business grows. We need to refer to it to make sure we are on track with the financial forecast. We need to know how many sales we need each month to keep us in profit. Your business plan should tell you all of this and help you keep on track to achieving your goals.
How much did it cost to start the business?
It cost me £12 000, which was mainly for the website to be built, advertising, marketing, (the key to succeeding in business) and stock. It’s amazing how much a small advert costs, then when that doesn’t work you need to try other things. Which also cost money.
Buying a computer, fax, printer, telephone, business cards, letterheads, desks, having new phone lines put in and insurance – it soon adds up. But keep in mind the more you spend on looking professional, the more returns on that investment you will receive.
If you have a poor looking website, for example, you will lose more money in the first few customers who visit your site than it would have cost you to build a site better a little better in the first place.
Nobody wants to hand over money to a business who doesn’t feel image is important.
How did you fund this?
I funded the start up of the company personally to start with and a small loan, then every penny I earned from the company went straight back in to pay for more advertising and more marketing.
As soon as I had £500 in the bank, I asked what marketing or advertising can I get for that. A lot of people who start out in business want to take the first £50, £100, £200, £1000 they get in the business account.
If you can afford to, leave it there until you need it or put it back into advertising and marketing – you can never do enough.
Similarly, how are you funding your running costs until the business takes off?
Most of my income from the company goes straight back into the company, once my company was self sustaining, i.e. the profit I was generating was funding the advertising, marketing and running of the business, I am now taking out the cash I injected from my personal account, and all of the income after that will be profit. But we still spend lots on advertising and marketing.
Have you made any provisions for business not being as prosperous as expected?
I should have really made provisions for the business not being as prosperous as expected but the way I figured it was if I could earn the same or even a little less working for myself than I could working for someone else, I would be happy.
Happier than I ever would be working for an employer. I have my qualifications to fall back on should anything drastic happen, so I guess that is my fall plan if gotchathis.com is not as prosperous as expected. But it’s looking good so far.
When did you stop working?
It’s really hard to believe in your idea so much to sacrifice the safety net of a wage coming in every month but I stopped working in March 2006.
It was one of the hardest decisions I have made in my life, and one of the biggest moments in my life too. Once I got over the day I handed my notice in it felt good after that.
Are you working from home or from premises?
At the moment the business office is at home, but I have a warehouse to house the stock and look after the distribution for the website.
I made the decision to have my office at home simply because of the overheads that come with an office with storage space. I had to economise somewhere, I had a home office anyway so it was OK for me.
But as things expand we will be looking into getting a full office and storage unit in one. I’m finding working from home OK, it’s quiet and I don’t have to sit in traffic every morning, which is a huge bonus.
How many hours are you working at the moment?
I love doing what I do, so I don’t class it as work, but if your asking how many hours do I spend in the office (or sat at my computer as I work from home) a week I would say in excess of 50.
How are you managing your day and what steps have you taking to ensure you’re able to get everything done without working around the clock?
I’m a very organised person I use software to manage my “to do” list; make the most of Microsoft Outlook or Act!
I spend the first half an hour or hour every morning to address the issues which arise on a day to day basis. I prioritise workloads and make sure I work hard to meet the goals set out for the day.
What about staff, is it just you?
At the moment it is just me running the majority of the business with occasional help from friends or family, but I will need to take on an employee soon, orders are rocketing and I’m finding it difficult to run all aspects of the business with out working every hour god sends.
What marketing and advertising have you done so far?
Marketing and advertising are the two things you need the most so therefore cost the most. We have spent lots and lots of time and money on both. The key for Gotchathis.com is being at the top of search engine results.
We have advertised in local papers, on t-shirts, mugs, key rings, playing cards, mail shots, e-mail campaigns, telephone campaigns, using marketing and advertising companies – you name it we’ve done it. But for us, pay-per-click advertising and search engine optimization are key.
Where do you hope to be in 12 months time?
In 12 months time we hope to carry on growing at a steady rate, we hope to be expanding sales and finding innovative new products to sell on the website. We are growing at a steady rate at moment, and hope to continue that way.
What are the main obstacles to growth?
I think the main obstacles to growth are the funding of it. You need to know when the time is right to grow too.
You should aim to be running your business on the brink of capacity and expand slowly funding the growth with profit. Don’t try to fund growth too quickly or you may find you overheads are out-pacing your profit.
How do you plan to overcome these?
We are growing at a steady rate I am happy with; we hope to carry on growing at this rate so we can mange the growth efficiently. We grow as we need to.
Tell us about your website. How important is it to your business?
As you can probably tell by now our website is paramount to the business. We are an online retail store, it is very important to us. We had a professional design firm who designed and built the site, there was just too much programming involved.
The site is a fully dynamic e-commerce site so as you can image it was expensive. But we needed it to be right, it’s the heart of our business, so priority one was to design the site for ease of use and with the customer in mind.
Which I am delighted to say is what we have achieved. It wasn’t easy, but we got there in the end.
What are your main ambitions, to make a lot of money or enjoy what you do?
I would have to say a little from column A and a little from column B, everybody is in business to make money and if you can enjoy it while you do that’s a bonus! And who wouldn’t enjoy testing the latest gadgets and gizmos to feature on the website?
What have you found difficult about starting up and what do you wish you’d done differently?
Know what you want to do right from the start don’t rush, take your time. Get your company image sorted out before you wade in paying printers. Get a brand established. Know your products and sell them to the customers.
Don’t be afraid to get out there if you aren’t an expert. If you have a good idea which you are interested in, you will be surprised how quick you can learn the rest.
If I was going to do anything different I think I would maybe try to slow down a little, I want everything now, and everything doing now. Sometimes you just have to slow down a bit and look at the bigger picture instead of rushing off bouncing off several tangents.
Have a sound business plan to start with and stick to it. Don’t rush out trying to get customers right away, sort out the background of the business before you present it to the world.
What skills and personal characteristics do you need to start your own business?
I think the main characteristic you need to start your own business is confidence, if you have confidence and a good idea you certainly have the basis to succeed in business. The rest can be learnt from websites and books.
So what advice would you give to anyone thinking of starting a business?
My advice to anyone would be, if you have a good idea then go for it. Seek the right advice from the right people; test your idea while you are in full time employment or even when between jobs.
Make sure you get a positive response about your idea, if people like it and you feel confident. Do it. Just go for it as long as you plan everything and are totally committed to succeeding then go for it, you won’t regret it. Just think of where you could be in a couple of years time.
Thanks a lot and the very best of luck. Will you come back and tell us how you’re getting on in six months’ time?
Thanks for letting me share my experiences. I can’t wait to see what the next six months brings. Hopefully success, but I will let you know how gotchathis.com is getting on.
Please visit the website www.gotchathis.com and sign up to the mailing list for a chance to win an ipod nano.