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Small Business: Online start-ups return to a place in the sun
Small businesses are finding the internet the best way to launch — it is easier, cheaper and cuts red tape. By Rachel Bridge
NOT long ago dotcom was a dirty word. It brought up painful memories of the crash of 2000 when a lot of people lost a lot of money very quickly. When it was over, they beat a hasty retreat to the world of bricks and mortar and thought that was the end of that.
But now dotcom is back. In the past few months people have suddenly realised that maybe they were a little hasty in writing off the whole sector. Indeed, First Tuesday, the original networking venue for would-be internet entrepreneurs, has recently re-emerged as Second Chance Tuesday.
*
The truth is that taking the online route is an ideal way for fledgling entrepreneurs to start a business. It is cheaper, simpler and less bureaucratic than starting up a bricks-and-mortar company.
This time, however, it is a different game. Mark Curtis, internet expert and founder of several online companies, said: “Online has come back into vogue, but in a quieter, less frothy way than in the late 1990s because people are getting on with the serious business of making money from it. There is much less experimentation.
“You don’t hear people running round saying, ‘Well, let’s just set up an online company and see what happens. We can worry about how we’re going to make money later.’ People are saying, ‘Here’s our plan for making money from day one’.”
Setting up an internet-based firm can certainly be a low-cost way of starting a new business. With domain names available to buy for as little as £7.50, do-it-yourself websites on offer from £300, and website designers prepared to put one together for as little as £1,500, taking the dotcom route has become a highly attractive option.
Peter Crawshaw and Hugh Salmon are typical of the new-style entrepreneurs. They had the idea for their book-promotion business, Lovereading.co.uk while working in advertising. But instead of giving up their jobs and rushing off to launch their site in a blaze of hype, they spent £10,000 building a basic website and researching the market.
Crawshaw said: “We had an idea that we might be able to improve publisher relationships with readers and that morphed into the idea of Lovereading. co.uk, where readers can get extracts and publishers can promote their books. But we wanted to find out if our idea had legs so we got some names from an e-mail supplier and sent out a test e-mail to 50,000 people to see if they liked the idea. Of those, 1,000 people signed up and that gave us the confidence to move forward and make the site larger.”
It was only at that point that Crawshaw gave up his job. The two men borrowed £30,000 from friends and family to take the business to the next stage. More than 100,000 people have now registered to use the site, where they can read extracts from books before buying them and find recommendations of books similar to the author or genre they like.
Also on board are 12 big publishers, who can promote their books on the site. A business angel has now invested £250,000 in the venture — enough, the founders hope, to take them to profitability.
Crawshaw said there were several benefits to setting up online. “The huge advantage is that you are able to test what you do at a lower risk. You don’t have to invest in property and long leases,” he said.
“Being online rather than on the high street is great because you can change and develop your service. In the first six months we were able to watch what our early adopters did on the site, which helped to improve and develop the product.”
Curtis believes one of the big advantages of setting up an online company is that it makes marketing efforts a lot more effective. He said: “It has become clear that online marketing is a profoundly cost- effective way of getting hold of customers. It is enormously trackable, which means you can see what is happening, so you know which bits of your advertising are working and which are not. A lot of businesses have discovered that, for instance, pay-per-click advertising on Google is a fantastic way to get noticed by people.”
Wendy Shand, a mother of two from Portsmouth, had the idea for her first business after a fraught family holiday in France, where her 18-month-old son fell into a swimming pool. After she returned home she started up Totstofrance.co.uk, an online company that offers holiday homes for families with babies and toddlers.
She said: “The house we stayed in was beautiful but unsuitable for kids and therefore stressful for us as parents. We had to be on guard all the time.”
All the holiday homes offered by Totstofrance are equipped with cots, high chairs, potties and stair gates and are within an hour of the airport. Pools and gardens are enclosed and nappies and milk are available on arrival.
Shand, who has a background in marketing and teaching, took a free online course in enterprise before starting up the business earlier this year. She spent £1,200 getting a website designed and £5,000 in total starting up the business.
She said: “Very little thought had been given to the needs of families travelling with small children and so I thought setting up an online business was a great way of addressing this niche in the market.”
Curtis said: “When confidence in the online sector collapsed, a lot of people took the view that now they could go back to business as normal. But people have begun to realise that there is good money to be made on the internet. I think it is an excellent way of starting up a small business.”
Some new-wave dotcom firms
Notonthehighstreet.com
A website that promotes and sells original products offered by 100 creative British small businesses
Friendsabroad.com
A community where anyone who wants to learn a language can find like-minded people with whom to practise
Ecourier.co.uk
A delivery company that enables clients to watch the progress of their package by tracking it on a website map
Small businesses are finding the internet the best way to launch — it is easier, cheaper and cuts red tape. By Rachel Bridge
NOT long ago dotcom was a dirty word. It brought up painful memories of the crash of 2000 when a lot of people lost a lot of money very quickly. When it was over, they beat a hasty retreat to the world of bricks and mortar and thought that was the end of that.
But now dotcom is back. In the past few months people have suddenly realised that maybe they were a little hasty in writing off the whole sector. Indeed, First Tuesday, the original networking venue for would-be internet entrepreneurs, has recently re-emerged as Second Chance Tuesday.
*
The truth is that taking the online route is an ideal way for fledgling entrepreneurs to start a business. It is cheaper, simpler and less bureaucratic than starting up a bricks-and-mortar company.
This time, however, it is a different game. Mark Curtis, internet expert and founder of several online companies, said: “Online has come back into vogue, but in a quieter, less frothy way than in the late 1990s because people are getting on with the serious business of making money from it. There is much less experimentation.
“You don’t hear people running round saying, ‘Well, let’s just set up an online company and see what happens. We can worry about how we’re going to make money later.’ People are saying, ‘Here’s our plan for making money from day one’.”
Setting up an internet-based firm can certainly be a low-cost way of starting a new business. With domain names available to buy for as little as £7.50, do-it-yourself websites on offer from £300, and website designers prepared to put one together for as little as £1,500, taking the dotcom route has become a highly attractive option.
Peter Crawshaw and Hugh Salmon are typical of the new-style entrepreneurs. They had the idea for their book-promotion business, Lovereading.co.uk while working in advertising. But instead of giving up their jobs and rushing off to launch their site in a blaze of hype, they spent £10,000 building a basic website and researching the market.
Crawshaw said: “We had an idea that we might be able to improve publisher relationships with readers and that morphed into the idea of Lovereading. co.uk, where readers can get extracts and publishers can promote their books. But we wanted to find out if our idea had legs so we got some names from an e-mail supplier and sent out a test e-mail to 50,000 people to see if they liked the idea. Of those, 1,000 people signed up and that gave us the confidence to move forward and make the site larger.”
It was only at that point that Crawshaw gave up his job. The two men borrowed £30,000 from friends and family to take the business to the next stage. More than 100,000 people have now registered to use the site, where they can read extracts from books before buying them and find recommendations of books similar to the author or genre they like.
Also on board are 12 big publishers, who can promote their books on the site. A business angel has now invested £250,000 in the venture — enough, the founders hope, to take them to profitability.
Crawshaw said there were several benefits to setting up online. “The huge advantage is that you are able to test what you do at a lower risk. You don’t have to invest in property and long leases,” he said.
“Being online rather than on the high street is great because you can change and develop your service. In the first six months we were able to watch what our early adopters did on the site, which helped to improve and develop the product.”
Curtis believes one of the big advantages of setting up an online company is that it makes marketing efforts a lot more effective. He said: “It has become clear that online marketing is a profoundly cost- effective way of getting hold of customers. It is enormously trackable, which means you can see what is happening, so you know which bits of your advertising are working and which are not. A lot of businesses have discovered that, for instance, pay-per-click advertising on Google is a fantastic way to get noticed by people.”
Wendy Shand, a mother of two from Portsmouth, had the idea for her first business after a fraught family holiday in France, where her 18-month-old son fell into a swimming pool. After she returned home she started up Totstofrance.co.uk, an online company that offers holiday homes for families with babies and toddlers.
She said: “The house we stayed in was beautiful but unsuitable for kids and therefore stressful for us as parents. We had to be on guard all the time.”
All the holiday homes offered by Totstofrance are equipped with cots, high chairs, potties and stair gates and are within an hour of the airport. Pools and gardens are enclosed and nappies and milk are available on arrival.
Shand, who has a background in marketing and teaching, took a free online course in enterprise before starting up the business earlier this year. She spent £1,200 getting a website designed and £5,000 in total starting up the business.
She said: “Very little thought had been given to the needs of families travelling with small children and so I thought setting up an online business was a great way of addressing this niche in the market.”
Curtis said: “When confidence in the online sector collapsed, a lot of people took the view that now they could go back to business as normal. But people have begun to realise that there is good money to be made on the internet. I think it is an excellent way of starting up a small business.”
Some new-wave dotcom firms
Notonthehighstreet.com
A website that promotes and sells original products offered by 100 creative British small businesses
Friendsabroad.com
A community where anyone who wants to learn a language can find like-minded people with whom to practise
Ecourier.co.uk
A delivery company that enables clients to watch the progress of their package by tracking it on a website map
Interesting read, but I disagree with it. I have countless clients who set up small businesses online expecting it to be a piece of cake. They all think it's easy... until they realise that to get higher than position 6700 for a search term in Google takes bloody hard work - and money if you don't know how to do it yourself.
