Unitechnology: Pavel Kilovatiy and Sarah Gooding

This new software company tells us why they think they are the only ones for new businesses

Sarah Gooding and Pavel Kilotaviy met while they were working at an internet agency several years ago. It was here that they spotted a ‘gap in the market’ for DIY online shop software. They now run a business supplying computer packages to a group of people very close to our hearts  – small businesses.  Name: Pavel Kilovatiy & Sarah Gooding Age: 30 and 33 respectively Business: UniTechnology Ltd Type of business: DIY online shop software Start date: August 2005

When did you first decide you wanted to start your own business? We’d been working for the same leading UK technical Internet agency for a number of years, for both large blue chip accounts as well as small business projects. Independent start-ups and small businesses often pose a much greater challenge because of their very limited budgets. We wanted to get more involved with these kinds of businesses. Larger organisations tend to focus more on long-term accounts for stable revenues. So 12 months ago we decided to take matters into our own hands and start our own business. Was it your first business idea and where did it come from? Yes. Having worked in this industry for a long time, we realised just how under-serviced small business owners are. Most DIY products are too technical or don’t offer enough flexibility or professional results. From our experience and technical expertise we knew we’d be able to create a truly groundbreaking solution to get business owners where they need to be at a fraction of the cost.

Was your decision to start a business inspired by any other companies or individuals? Like a lot of other start-ups it was the problems facing customers we’d worked with in the past, and in turn the lack of workable solutions offered by the industry, which inspired us to start our business.

Once you’d decided to start a business, what did you do first? We’d already looked at the figures which told us that we had a viable business. However, the greatest race against time was to produce a product range of the highest standard as quickly as possible. That meant packing six years worth of research and development into 12 months. The technical specification was written and work began on the build soon after.

What research did you do? The most important factor for us was to ensure that our product range succeeds where others were failing. That meant plenty of testing of competitor products and thoroughly understanding the issues facing start-ups and small businesses. We were amazed to find that although there were companies offering DIY products of varying standards, none of them included helpful advice or guidance on how to successfully run an online shop. We made it a priority to include the ‘Tell me how’ section of our website to address a wider spectrum of issues.

What advice did you seek? We read a lot of information on the Business Link website, in fact some of it was so good we sought permission to use it on our own website. Other than that there was no direct one-to-one contact. We were aware of the mentoring programme, but decided to work with mentors we already knew as we had first hand knowledge of their experience and achievements.

What other help did you get? Looking for investment has taken up more time that we expected. We worked with Thames Valley Investment Network, and found them to be quite helpful.

Does the government need to provide more help to people trying to start a business? If you’re after the Small Firms Guarantee Loan be prepared to be guarantor of at least 30% (most banks stipulate 50%) of the loan value yourself. The personal guarantees required almost render the scheme useless.

Talk us through the process of writing your business plan. We started using a package called Business Plan Pro 2006 by Palo Alto to get started. After that it took another two months of fine tuning. Writing our business plan was a fantastic and fraught experience. It ultimately gave us the opportunity to agree on a common vision, and communicate that to other people.

How useful has your business plan been and do you think you’ll stick to it as your business begins to grow? Our business plan helped us to define our target market and how to segment that market effectively. It also allowed us to understand the figures in greater detail and plan our cash flow more carefully. Our business plan will come under review every six months. What we do in the interim is produce basic reports so we know what’s been achieved; understand what else needs to be done and what will be put in place to drive it.

How much did it cost to start the business? We have invested £60,000 in the business. This has come from personal savings. Developing the product range has accounted for the majority of costs.

Similarly, how are you funding your running costs until the business takes off?Our running costs are funded from investment, personal savings and from revenue generated by the business. From the outset we had a hosting service up and running, generating revenue.

Have you made any provisions for the business not being as prosperous as expected? Please explain them.Our projections and staffing requirements are completely scalable. Our development team is outsourced and we have a mixture of both in-house and out-sourced support, which gives us flexibility. Pavel and I do the majority of the selling, which includes direct sales as well as putting in place reseller agreements with ISPs and other appropriate distribution partners.

When did you stop working? Almost 12 months ago, as soon as we decided we wanted to pursue our own venture. We recognised the time was right. If we left it any later the window of opportunity would close.

Are you working from home or from premises? We share offices with another company in London, but we also work from home. At some point in the near future we’ll get premises of our own because we’ll need the space and meeting rooms are over-subscribed. Pavel finds working from home quite distracting, but working from home suits me better. I’d worked from home previously and have always been able to switch off and focus, because I’m usually there by myself.

How many hours are you working at the moment? Typically 60 – 70 hours a week. Coming from the industry we do, we’ve been through the boom and the bust, all of which demanded long working hours. Devoting as much time as we do to the business has not been a great shock to us or our families.

What about staff, is it just you? From the beginning we had an outsourced development team of seven and have recently added support resources to this. There are two other mentors working alongside us. The team is very passionate and so there are differences of opinion. Tactful management has made it possible for us to achieve equilibrium overtime. Our next priority is to take on sales and support staff in-house and a product manager. Finding the right staff will be time-consuming so we’re trying to clear the decks as much as can before we focus on recruitment. Is the amount of red tape that comes with taking on an employee something that concerns you? No. It is essential for the growth of our business.

What marketing and advertising have you done so far? Advertising has so far been focused on driving pre-launch testing. Inviting people to try the software and give us feedback. We’ve been running several campaigns on Google Adwords as well as using opportunities to interact with small businesses on forums and blogs. Our plan is to book online advertising shortly and run several PR campaigns to address specific sectors. Customer case studies will be very important for us to drive both regional and sector based coverage. In May, we will be exhibiting at the Business Startups exhibition at the London Excel.

Where do you hope to be in 12 months time?In 12 months we will have sold over 3000 units, launched Developer and Professional versions of the software and be generating revenue of over £1 million. It’s ambitious and aggressive, but to obtain significant market share this approach is necessary.

What are the main obstacles to growth? The right sales and marketing program will be crucial for us. We will benchmark all activities to help achieve the best return on investment. Working with Google Adwords has already been an extremely interesting and worthwhile exercise for us, in understanding what works, what doesn’t and what’s value for money.

Tell us about your website. Our website has been created using UniTrader 2006. It is one of our principal routes to market as well as a community environment where visitors can get advice and support, and engage with other like-minded businesses.

What are your main ambitions, to make a lot of money or enjoy what you do? The real answer to that question is both. But that’s not principally what drives us. We’ve been adamant that the market we’re targeting is under-serviced by an inappropriate mix of products and services. We absolutely believe in what we’re doing and we won’t be happy until we’ve proved ourselves to be right.

What have you found difficult about starting up and what do you wish you’d done differently? Dealing with our bank. The service level is appalling. Finding investment also took much longer than we anticipated. We probably should have started the funding exercise six months earlier.

What skills and personal characteristics do you need to start your own business? It is absolutely vital to be ambitious, confident and have strong convictions about what you’re doing. They’ll be plenty of people questioning your ideas along the way. A thick skin will come in handy too.

So what advice would you give to anyone thinking of starting a business? Research your business idea thoroughly. Understand where your market is and how you can reach them. So many good ideas fail because the marketing plan doesn’t get off the ground.

 

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