The Tie Warehouse: Gary Baker
Gary Baker recently started up the Tie Warehouse. He tells us how he's getting on
A budding entrepreneur bursting with startup ideas, Gary Baker saw a gap in the market to startup his own online tie selling business. He was an opportunity he could knot refuse. Here he talks to Startups.co.uk about how he's getting on. Name: Gary Baker Age: 35 Business: Tie Warehouse www.tiewarehouse.co.uk Type of business: Online Men's Ties Retailer Start date: 01 January 2004 When did you first decide you wanted to start your own business? I've always been doing one thing or another for as long as I can remember. I tend to get an idea and just act on it to see if it has any value. Tie Warehouse is the latest of those ideas, and despite having spent the last 4-5 years developing and managing websites for other businesses, this is my first foray into my own e-commerce venture, so it's been quite exciting! Tell us about your business Tie Warehouse sells men's ties at discount prices through our website at www.tiewarehouse.co.uk. The range of ties covers everything from plain coloured ties to novelty ties, as well as the hard-to-find items like boy's ties and bow ties. The prices range from £5 – £20 with free UK delivery, so they're excellent value, though we're not trying to compete just on price. Was it your first business idea and where did it come from? It was certainly not my first and I doubt it will be the last! I'm constantly coming up with new ideas; some of them I start and then realise it's not going to work, others I just make a note of in case I need them later! The idea for Tie Warehouse is one of those – I thought of it years ago but e-commerce in the UK was barely a twinkle in the internet's eye, so I left it. Then, when I wanted to get into e-commerce, I hauled it out of the mothballs and started working on it again. Was your decision to start a business inspired by any other companies or individuals? I'm always interested in success stories and what made those people or companies successes, specifically in e-commerce. I think we can learn a lot from them, and be inspired by them, but ultimately you have to get your hands dirty and do it yourself to really know what it's all about. Obviously people like Sir Richard Branson are a great inspiration, but even family and friends who are successful in their businesses can be an inspiration as well. What makes you think there's a market for your business? No matter how much we want to be more casual in the workplace, a tie is still required for men in most offices, and in most business meetings. At the moment if you want to buy a new tie it's a bit of a hassle – you have to physically go to a shop like Marks & Spencers or Tie Rack and wade through the ties they have and find one you like. Chances are they don't have what you want so you have to go to another shop and start again. Tie Warehouse aims to make it easy with a wide range of ties to choose from without leaving your home or office, as well as lower prices and free delivery. Based on our research, this is exactly what is wanted. Once you'd decided to start a business, what did you do first? The first thing I did was to come up with a name that a) was available in both .com and .co.uk, and b) was easy to remember but also described what the site was trying to do. That wasn't easy – lots of good domain names are registered but not in use, but after a while I settled on tiewarehouse.com and tiewarehouse.co.uk. They summed up the impression I was trying to create of a warehouse full of ties at great prices. I then started looking for suppliers to get costs so I could start doing some research and start on a business plan. What research did you do?I first had a look at what other tie websites there were and what they were selling and what they looked like. Although there were a couple of websites in the UK, the US had more of what I was aiming for – a large range of discounted ties. Then I had a look for suppliers – this isn't as easy as it might seem as they don't tend to have websites or advertise themselves, so you have to spend a lot of time researching and phoning around, and even now I'm still unearthing specialist manufacturers who can help with new stock.
The most telling research though was an online survey I set up to find out potential customers' buying habits. There was a good response (offering 3 ties as a prize draw helped) and it certainly made me think a little more about what sort of ties I should be offering. What advice did you seek? I asked people I had worked with on other business projects previously for their input, and spent some time reading up on areas of e-commerce and business in general that I was a bit rusty on. I have used Business Link before and still had some of the material and ideas they had given me, and I will probably be chatting to them again during the next few months as I found it useful the last time. What other help did you get? Once I had designed the site and set up the first 20 or so ties, I asked for comments in a number of newsgroups and websites frequented by website designers and other online shop owners. The comments were very helpful, and where possible I implemented a fair bit of what they recommended. Does the government need to provide more help to people trying to start a business? I think they're on the right track, but I'm sure some of the red tape could be cut. There does appear to be some difference in quality of service between different Business Links as well which could be improved. I also think that there should really be more tax incentives to start a business – most startups really struggle in the beginning yet there's no tax relief for them.
The government keeps saying they're fans of small business but they don't do much to show it!
Talk us through the process of writing your business plan. I have a business plan outline that I used before so I tend to follow that each time because it makes sense to me. Originally it was a programme from one the banks that you just filled in the blanks, and I then added on to that. I think that's the most important thing with a business plan, unless you have to tailor it specifically for raising finance – it needs to a plan that you can follow and understand, even if it veers slightly from the formal plan used for raising finance.
How useful has your business plan been and do you think you'll stick to it as your business begins to grow? The plan has been useful in that it has helped consolidate my thoughts and found gaps in my thinking that I may only have found when it was too late if I didn't have a plan. It's a constantly changing document, and I'm always adding or amending things.
As the business goes through different stages, different plans will be needed, but I can't see myself without it. Having a marketing plan with a budget as well is also important, as it's all too easy to just spend money on marketing without having researched it properly beforehand. It's also very useful to refer back to the original plan every now and then to re-focus yourself on what it is you're trying to achieve when you feel you're straying from your planned path.
How much did it cost to start the business? Not much to be honest – around £500. I was fortunate that I have a lot of experience developing websites in previous jobs so I designed the website at www.tiewarehouse.co.uk myself, and bought a limited amount of stock to start with.
I was determined that the site should not start off thousands of pounds in debt, but rather grow as sales grew, thereby paying for itself. The costs are now increasing as more stock is needed and advertising spend has to increase so we can sell the ties, but it's still paying for itself.
How did you fund this? From my own savings. There was little finance available for this so it's really had to generate it's own funding, which isn't easy but it does make you consider every penny, which is probably a good thing!
Similarly, how are you funding your running costs until the business takes off?I still maintain websites for other businesses which pays the bills, but so far the sales for Tie Warehouse have been covering most of the costs incurred, so that's a good start!
When did you stop working? I've been working for myself for the last few years so I haven't had to leave a job in order to start Tie Warehouse. I probably won't stop freelancing for quite a while, because not only is it my main income at the moment, I also enjoy it, and the two jobs don't get in the way of each other at this stage.
Are you working from home or from premises? I work from home predominantly but I'm also preparing for the time when I will need some sort of premises to store stock and operate from.
How many hours are you working at the moment? Probably about 10 hours a day, and a few hours a day on weekends as well.
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 have a list of things that needs to be done and I work through it every day, and add to it every day. A lot of my time initially was spent on setting up procedures and testing our customer service (which is a major part of what we offer), but now my time is taken up with finding new stock and marketing the site. I don't tend to work all hours, though I rarely have a weekend where I'm not doing something or other business-wise!
What about staff, is it just you? Just me fulltime, though I use freelancers to fill the gaps and for various bits of work. I also have a backup person that I'm training to take over when I'm away or unavailable (or when it gets really busy…) to help pack and process orders.
Is the amount of red tape that comes with taking on an employee something that concerns you? Yes. It's unlikely there will be any permanent employees for quite a while though as most of the extra work can easily be done by freelancers. I think the amount of red tape surrounding employees is incredible and as long as I can use freelancers I will.
What marketing and advertising have you done so far? Much of the initial promotion has been search engine marketing so we've had a lot of traffic that way. The products are also listed on Kelkoo and Pricerunner (the shopping comparison sites), and various shopping portals including Yahoo!
Shopping and Lycos Shopping also feature our products. I've just finished setting up an affiliate program with Paid On Results and a lot of effort will be put into that over the next few months. The survey we did as part of the initial research was also marketing in a way and we actually got a couple of sales just from that!
Where do you hope to be in 12 months time? I want to have a very large range of ties turning over quickly, with the Tie Warehouse brand foremost in consumers' minds when they're considering buying a new tie.
What are the main obstacles to growth? Money is probably the biggest obstacle. When you're selling a product that has such a wide range such as ties do, then a fair amount of capital is tied up in stock.
How do you plan to overcome these? Grow organically instead of splashing out thousands of pounds on stock to start with. This may cost us slightly more per unit, but it does mean we can be more selective about the type and quantity of ties we stock, and also allows us to gauge which ties are the most popular. Once we have reached a certain level of sales we can look at ordering larger quantities of the more popular items.
Tell us about your website. The website at www.tiewarehouse.co.uk is the business! It's based on osCommerce but it's been heavily modified to do exactly what I want it to do. The main aim of Tie Warehouse is to make buying a tie simple, hassle-free and inexpensive, so the site has to be easy to use and the ordering process has to be very simple and quick. So far feedback has been very good and we will continue to work on those aspects of the site to ensure our customers always have a positive shopping experience.
What are your main ambitions, to make a lot of money or enjoy what you do? I have to enjoy what I do – it's not an optional extra! Of course, if it doesn't make any money then there's not much point in doing it either. After all, we're in business to earn a living.
What have you found difficult about starting up and what do you wish you'd done differently? Although I did a fair amount of research I could probably have done more, mainly more detailed research as opposed to general buying habits. I would also probably buy slightly less stock than I did at startup, but that's not really a big problem.
The most difficult thing has been starting up on very limited funds – an accepted struggle if you're planning to grow organically. I would have preferred to have more funds for marketing in particular, but apart from that I'm pretty satisfied with what has been achieved so far.
What skills and personal characteristics do you need to start your own business? Perseverance. Keep at it, keep hammering away. If you turn around at the first brick wall you're not cut out for owning your own business! Skills in the area you're planning on going into are obviously useful, and an enjoyment for what you do is vital. If you don't enjoy it you won't have the motivation to do the work that needs doing.
So what advice would you give to anyone thinking of starting a business? Go for it, and believe in it! Trust your gut, but don't ignore advice. And ask for everyone's opinions, especially those in your target market. Force them to be honest and don't take their comments and criticisms personally and you'll make it happen.
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? Absolutely!