Eatstudent.co.uk: Joshua Magidson and Ed Green
The founders of Eatstudent.co.uk on turning their university venture into a profitable business
Company name: Eatstudent.co.uk
Founders: Joshua Magidson & Ed Green
Age: Both 23
Staff Numbers: 2 full time, 5 part time
Date started: May 2009
Tell us what your business does: Our business lets students order food online from their favourite local takeaway restaurants. It's quicker and easier than ordering over the phone; students can pay online or by cash, they can read and leave reviews; they can save favourite dishes and personal details – it's generally an easier way to manage one of the most important facets of university life!
Where did the idea for your business come from? I actually first started a similar website while still at university in Nottingham in 2006 – back then it was just a really simple website which listed the menus for all the best local takeaways and was built with a tiny budget. It was after graduating in 2008 that I decided to develop the website into a genuine business, completely redeveloping the site, radically changing our business model and revenue streams, and expanding to new locations. The initial idea came from a very common problem – a case of the late night munchies and an inability to find a takeaway menu.
How did you know there was a market for it? We always believe it's important to stick to what you know – we knew there was a market for our business because we were the market – in fact everyone around us was our target market, so we were convinced that people would be interested. That said anecdotal evidence wasn't enough – before we committed any serious investment to the project we carried out a thorough programme of market research.
How did you raise the money? At the moment the entire project is privately funded. Looking for investment is the next step to take the business to a national level. We've heard about the ‘difficult financial climate' enough times to realise that it could be a difficult process. However, now that the UK has officially come out of the recession, the future is looking bright and we hope to find a few people interested in helping us take our business to the next level. We've also found that starting a self-funded business on a low budget an extremely valuable experience, both literally and metaphorically. We've had to keep a close eye on finances the entire time and it's really helped us stick to a strict budget – if you don't have the money, you can't spend it!
How did you find suppliers? Our suppliers are the restaurants who we put on our website – we do lots of research to make sure we get the best places. We speak to current students and trawl the web to find every scrap of information about potential partners. Then it's a matter of getting the restaurants on board with the idea.
What challenges have you faced how have you overcome them? One of our biggest challenges is the inevitable consequences that come with being an intermediary – at the end of the day we are not completely responsible for the service. This can be really frustrating as our customers can suffer through no real fault of our own. We have learnt, however, the best ways to mitigate these dangers: by offering exceptional customer service and maintaining high standards in choosing our partner restaurants we can ensure that our customers receive the best possible service.
Where is your business based? Our business is currently based at home – a website can certainly be professionally run and organised from home. We've found that the important thing is to try and keep a clear separation of home and work lives, even if your office happens to be surrounded by bedrooms! It's also vitally important that everything is kept meticulously organised – a home office can be just as professional as a fancy address in the city.
How much do you charge? For our users the service is entirely free, and in most cases it is cheaper than the alternative of phoning up the restaurant because we negotiate exclusive discounts. Our turnover is generated by charging the restaurants a percentage commission on each order that they receive through our site. We put a great deal of thought into how much to charge the restaurants, the first step being a full analysis of the charges levied by our competitors.
What has your growth been like? There is a sense in which business plans for start ups can involve a lot of “educated guessing” so it's been really interesting to see how our actual figures compare to our projected figures. Our turnover has been healthy, and we broke even very soon after launch. We are now operating profitably, which is a really important endorsement of the business and all the hard work we've put in over the last 18 months.
What was your first big breakthrough? Perhaps the first big breakthrough was the first order we received after the website went live. We decided to begin with a soft launch with no marketing, instead relying on some of our previous customers from the old website to make the transition to ordering online. We weren't sure if or when to expect any orders on the first night we launched, but sure enough, after a few hours, the first one came through. I remember we checked it meticulously and even though the restaurant delivered it without any issues whatsoever, we bugged them with phone calls until we knew the order had been given to the customer and they were happy with it. Nowadays we don't go the same ridiculous extreme with every order, but we still monitor every single one to make sure they arrive safely. An equally important step for us was when we started to receive our first repeat customers. After this we realised that we had a service that worked and that people found useful. This was a huge boost for us and provided us with the incentive to grow the business and invest further in it.
What would you do differently? One of the important things we have realised is that marketing is the easiest thing not to do, but it should never be neglected. As important as the daily administrative tasks might seem, it's vitally important to constantly be attracting new customers. We now make sure that we set aside a certain amount of hours in a week to concentrate on marketing – something we didn't do a few months ago.
Where do you want to be in five years' time? In five years time we want to be THE online site for any student who wants to order takeaway food. We hope to be operating throughout the country with a serious presence in all the big university towns. I think that every entrepreneur should have an exit strategy, just in case. We do have one, but we're not thinking about it at the moment!