The Entrepreneur: Charlie Marshall, Loaf
The founder of the £20m "laid-back" furniture company talks start-up transitions, treating customers as friends, and bi-monthly 'Mobbles' ...
Founder: Charlie Marshall
Description in one line: Laid-back furniture and squishy stuff for people to kick off their shoes and lead happier, more relaxed lives.
Previous companies: Loaf rebranded from The Sleep Room in October 2012. Marshall set up food manufacturing company Primal Soup in 1998 at the age of 24, which he then sold in 2005.
Turnover: £20m (inc. VAT)
12 month target: £27m
Describe your business model and what makes your business unique:
- We’re a vertically integrated business. We design our own products that are unique to Loaf.
- We keep it simple. The entire shopping process – from that first click to receiving the goods – should be as easy as possible for the customer.
- We’re becoming a multi-channel retailer.
What is your greatest business achievement to date?
We have a bi-monthly company catch up here at Loaf HQ called the ‘Mobble’. Over an evening, all Loafers (aka employees) come together to share successes, everyone reports on the important stuff and we have a good time doing it. I feel proud to see all of these amazing people under one roof, with a team double the size of what it was a year ago.
The great atmosphere at the Mobbles is a marker that everything within the company is synching well and that our whole loafing ethos is running throughout the business. Getting the culture right is a really difficult thing to do and it’s very satisfying when it works.
What numbers do you look at every day in your business?
I don’t! I think as an owner or someone at the helm of a company you can drive yourself crazy by looking at the figures every day. Instead I look at sales weekly, although I am guilty of occasionally sneaking a glance on my iPhone. I also check that we’re getting the balance right between warehouse space and stock flow, and anything to do with how well we’re performing on a customer service level.
To what extent does your business trade internationally and what are your plans?
International expansion is on the cards at some point but we’re focusing on the UK for now. We’ve grown very quickly and I think people often forget that we’re still a fairly fledgling brand in terms of age – we’ll be celebrating our sixth birthday this December.
The UK market is enormous and although we’re building a strong and loyal customer following we haven’t even scratched the surface yet. We want to get it absolutely right here first and it’s our aim to become a household name. Once we’ve done that we’ll look to other markets.
Describe your growth funding path:
I invested an initial £350,000 start-up costs raised from the sale of my first company Primal Soup, a soup manufacturing business co-owned with a friend. Loaf quickly became profitable after one month of trading and in year one turned over £1.6m. We’re cash generative and although we didn’t particularly need outside investment, earlier this year Peter Simon; Monsoon and Accessorize’s founder, took a significant minority stake in the company. The decision was less about the cash and more for the guidance and support to make sure we achieve our goals.
We’re now the 40th fastest growing company in the UK having grown consistently year-on-year with an annual turnover of £20m for the last financial year.
What technology has made the biggest difference to your business?
We’ve painstakingly built our own back-end IT platform. This has been a huge investment in terms of money and time but it will help us to get to where we want to go. The bespoke system gives us greater clarity and number crunches important data we wouldn’t have had otherwise. Despite the headaches along the way, it’s been totally worth it.
Where would you like your business to be in three years?
It’s our aim to grow into a £100m business over the next few years. To help achieve that, large destination retail outlets are planned called ‘Loaf Shacks’. London is the first stop and then we hope to roll them out across the South East and finally throughout the rest of the UK. Expect to see more of the same, just on a bigger scale.
What is the hardest thing you have ever done in business?
Honestly, the last six months has been the most challenging. We’ve made the important transition from a small to a medium-sized company. The main changes have been to invest in new people before we needed them, an intelligent new IT system and better warehousing and delivery capability. Because these factors are interlinked, we’ve pretty much had to make all of the changes at the same time.
Most importantly, despite our growth, we’ve kept the small business “treating customers as friends” mentality. It was paramount to hold on to and strengthen our company culture to keep the magic that we’re built on. Our hard work is paying off and we’ve created an amazing platform upon which to grow the company into that £100m.
What was your biggest business mistake?
I don’t weigh heavily on the mistakes, instead I think about the learning experiences. I make mistakes regularly. I believe that as long as you don’t make them twice and they’re not serious ones, it’s OK. The same ethos applies to the team, we’ve created an open work environment where people have the confidence to just get on with it.
Piece of Red Tape that hampers growth most:
I actually don’t think we’re affected by any Red Tape. Britain is an amazing place to do business.
What is the most common serious mistake you see entrepreneurs make?
Anyone running a company should constantly ask themselves the question “why?”. Why should our customers be spending money on this? Why should we be doing this? Why is this going to give us a return? I think when people get comfortable they stop asking themselves “why?”. Then they’re in trouble.
How will your market look in three years?
Five years ago buying a big ticket item online, such as a bed or sofa, was still a fairly new and sometimes daunting concept. So our job back then was to be both cheaper than the high street and trustworthy. Now that things have evolved it’s more about having original products that are good value. Online retail isn’t just about bagging a cheaper price. Customers are clued up – they expect great quality products and great service too.
I strongly believe the future of the homeware industry will see physical spaces running alongside online offerings. Instead of the high street versus online as two separate marketplaces these sectors will merge and run simultaneously.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Reduce, reduce, reduce! Essentially keep a concept simple and then work out how to achieve your goal.
One of my indulgences is to play tennis with a coach a few times a week before heading to the office. And I take nice holidays. I work hard to be able to enjoy this side of life with my family.
Executive education or learn it on the job?
Learn it on the job! I’m not a believer in executive education.
What would make you a better leader?
Ask my team!
Outliers by Malcolm Gladwell. It made me realise the relationship and synchronicity between favourable circumstance and hard work. This duality often leads to success rather than just one single factor.