Taxi Cosmetics: Pete Kelly
Pete Kelly saw an opening in Asia for a cosmetics firm – so he took the plunge and started up Taxi Cosmetics. Find out how he's getting on in our Startup profile.
Name: Pete Kelly Age: 45 Business: Taxi Cosmetics (London) Limited Type of business: UK Colour Cosmetics brand Start date: June 2004 (Product available December 2005)
When did you first decide you wanting start your own business? I was made redundant and so it was kind of a ‘natural development'!
Tell us about your business Taxi was conceived just before I was made redundant. I knew something was happening so started working on a ‘plan B'. All my previous experience has been in the cosmetics industry so it seemed natural to stay in it but create a brand for sale as an export to Asia and developing countries who love UK fashion and popular culture.
Was your decision to start a business inspired by any other companies or individuals?
Previous experience meant working with ‘start up' brands like Bobbi Brown, Pout and Stila. I had seen them do it from a small range of products so knew I could!
What makes you think there's a market for your business? The cosmetics industry is very competitive but as a new UK brand we feel we have found a ‘niche' in terms of positioning and a USP in one of our products.
Once you'd decided to start a business, what did you do first? Research, research, research! This was done by visiting stores, trade shows in UK and overseas plus potential markets such as China and Japan. We also contacted Business Link who have been amazing advising and helping with grants etc.
What research did you do? Looked at competitors, researched supply, trademarks, barriers to entry in certain target export markets.
What advice did you seek? Business Link have been great and more than helpful!
What other help did you get? Local financial support from government/EU agencies such as help for website and buying computers.
Does the government need to provide more help to people trying to start a business? In our opinion no, we have had so much help but then we've asked for it. Some start-ups may feel there isn't much available but you have to research to see what you qualify for first – then ask! Being in an ‘objective 2' area has helped us.
Talk us through the process of writing your business plan. This has been the hardest thing! We wrote the plan from guidance found on the web and books. We didn't use professional help – too expensive.
How useful has your business plan been and do you think you'll stick to it as your business begins to grow? Sore point! The plan is being continually re-written to ‘flex' as the business changes in terms of customer and our product.
How much did it cost to start the business? Over £100,000.
How did you fund this? It was funded from own cash savings, redundancy pay off, re-mortgage and bank overdraft facility. Although it's risky putting the house up for the business, we own 100% of the equity and have resisted ‘angel' investors to date so we can keep control.
Similarly, how are you funding your running costs until the business takes off? Overdraft and very tight cost control in the business and personally!
Have you made any provisions for business not being as prosperous as expected? Yes, just cut overheads, put product expansion on hold until ‘cash' becomes available.
When did you stop working? April 2004. Redundancy was a shock at first but then we had ‘plan B' sort of in place so we knew what we were going to do.
Transition was strange at first as I have always worked, leaving home each day to travel to an office.
Being at home was odd but I got into a strong routine very quickly being disciplined about time keeping, no radios on, what to wear etc.
Are you working from home or from premises? Working from home allows flexibility but you are never away from work.
You have to be professional in your approach and discipline is key! You must keep regular hours, keep focussed and get into an office mentality even though you are at home.
In the future we will need a ‘warehouse' facility and small office set up – maybe 6 months time.
How many hours are you working at the moment? Easily 100 hours a week – every waking, breathing hour you think of your business!
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? Disciplined timetable – start same time each day, no lunch, kids prime time for a couple of hours late afternoon/early evening then office stuff/reading/research in the evening.
What marketing and advertising have you done so far? X 2 trade shows overseas plus some trade PR.
Where do you hope to be in 12 months time? Investor on board, sales through the roof and working on our next range of products!
What are the main obstacles to growth? Funding – to spend on new products and PR to tell consumers about the current range.
How do you plan to overcome these? Seek angel investment or borrow more money!
Tell us about your website. www.taxicosmetics.com is an essential tool to promote the company. We used a design team and modelled it upon our benchmark brands' sites. It needed to portray Taxi as being a bigger company than it actually was so we could create a presence to attract customers.
Our designers were great, on time, on budget. What would have done differently? Maybe not have spent so much on the retail side as internet sales very slow to date and are not justifying costs of set up/running costs.
What are your main ambitions, to make a lot of money or enjoy what you do? I guess both, we want to be secure and have a salary back, pension etc. Ultimately, we would look to sell the business in 5 years time, recoup our investment plus some interest hopefully.
What have you found difficult about starting up and what do you wish you'd done differently? The stress of self-financing was underestimated.
In hindsight, we could have saved some money on things like photo-shoots, POS and other design but that is with benefit of 20/20 hindsight. But, wouldn't be at all phased to do it again!
What skills and personal characteristics do you need to start your own business? Self belief in your idea/business plan. Commitment to see that through.
Stamina because it saps every ounce of everything out of you – energy, ideas and emotions.
Be prepared to learn something new everyday – usually from a mistake you've made the day before!
So what advice would you give to anyone thinking of starting a business? If you have ambition, then do it but research thoroughly, understand the risks – only put in what you can afford to lose. Don't give up!