Missing the Christmas rush might seem like madness but we decided not to launch Eliot Turner until the New Year. This was a tactical decision as we identified a risk which was not worth taking. The risk was regarding our stock management or the lack of it.

As we have a limited amount of capital in Eliot Turner we have to consider our expected sales. We recently launched an ecommerce website for one of our clients an award winning beauty salon in Newcastle. The launch of this site was so successful we had a slight panic about how to manage our own stock with very little sat on the shelf and little capital to order more. This particular website has only been soft launched as the owner is still uploading all the products. It proved our marketing formula and tactics when launching an ecommerce website are effective. If we launch the Eliot Turner website using this same formula we would face a short fall in stock.

So why not just re-stock?

Our suppliers are what I refer to as cottage industries that have few resources and little stock sat on the shelf. These suppliers during the Christmas period are themselves under huge pressure to meet the order requests from other retailers. This left us in a position where we would not have the capital to reorder in sufficient quantity and our supplier would be unlikely to meet our demands.

We are now building into our business plan a stock management structure which will allow us to ramp up stock levels in time for Christmas. The previous year’s trading history will also give us an idea as to the best selling stock so we should order the correct levels of each item / set.

Competitor analysis involves learning more about the businesses that function around the same target demographic as you enabling you to assess their strengths and weaknesses whilst identifying opportunities and threats to your own business.

Often businesses become obsessed with competitor analysis whilst others can ignore what their competitors are doing completely. A healthy medium would be to track competition, react to changes but focus on your own plans.  After identifying the main competition in the market, it is useful to recognize the threats they pose, their company objectives and strategies and their weaknesses, this can only add to the strength of your own business.

It is useful to create a competitor profile for each of your competitors as it enables you to gather all relevant information in one place allowing you to formulate an effective strategy to implement, monitor and adjust where needed. Competitor profiles include their background, financials, products, marketing, facilities, personnel and corporate and marketing strategies. Knowing your competition’s planned strategies allows you to plan a response through your own strategy whilst at the same time revealing strategic weaknesses.

We have identified accessorize as the main market leader for this type of jewellery, however there are many that sell handmade jewellery offering similar products to Eliot Turner that are certainly market competition.

Here are the ones I have identified as the biggest competition:

The Spotty Dog Shop

Lisa's Handmade Jewellery

FarFallina

Purple Label

Pia Jewellery

Silver Wire Designs

We plan to create competitor profiles for our competition; however, we do not want to concentrate too much on what our competition is doing instead focusing our time and energy on our own plans.

On Monday 29th June, Justin and I spoke at the SuperMondays event held at Newcastle University about the eCommerce experiment to a crowd of approximately 40 people. Thanks to Ross Cooney for inviting us to take part.

I believe that any business with clear goals which everyone in the organisation is working to will always succeed. We sat down as a team to discuss the goals for Eliot Turner for the coming year.

We decided to set 5 realistic goals which are:

1.      Achieve a turnover of £100,000 in the first year of trading
2.      Develop 1000 unique daily  visitors to the website by the end of the first year
3.      Primarily use social networking to build the business
4.      Build a brand which can be trusted on both a national and international market place
5.      Diversify into two other market areas by the end of year one. Initial ideas have been handbags, hats, beauty products and designer clothes

Looking beyond this it is worth to mention that one of our long term goals is to create a £1 million turnover by the end of year three.

We decided early on that we were going to develop Eliot Turner on a shoe string budget. Setting up the experiment was going to be fun, setting it up in a “recession” was going to be fun, doing it on a budget would make it incredible.

We have therefore decided on a budget of £1000 which will be introduced into the business by the four directors. As the legal structure of the business hasn’t been finalised this could be in the form of a loan, working capital or shareholder funds.

I can see people screaming at this post saying it’s impossible to start a business with £1000! However, it is worth noting that the initial design and development is being done by carrotmedia’s carrots out of working hours. Therefore we don’t have an overhead for the development of the website itself.

This is how we see the budget break down:
·        Legal costs / Business Startup – £500
·        Initial Stock – £400
·        Marketing budget – £100

Once we launch we will be reporting on how this was actually spent in finer detail and if it has been spent effectively.

I’m sure you’ve been at a dinner party and at some point during the evening someone mentions a bad experience with a bank. It’s like opening the flood gates as everyone round the table will have a story to tell. Unfortunately I’m not able to tell you that a business can run without a bank as it can’t! Unless you’re stuffing all your cash under the floor boards.

Are banks all the same or should you be using the same criteria as a normal supplier to choose who to work with?

In my view this is true to a certain degree and in the current economic climate banks are hard work. We have taken a slightly strange approach to choosing our bank.

We are going with HSBC not for the fact I think they are a great bank but because I’ve banked with them as a business for 5 years. Another deciding factor is all my co-directors also bank with HSBC. As we are on a tight time frame we are able to open an account very quickly as we are known customers of the bank.

Due to the time constraints on us to open the account it seemed important to open a bank account with the least number of hurdles. HSBC like all banks are wary of new businesses but having a proven business banking trading history and personal banking trading history goes along way. This shows the bank that we can keep within facilities, how much we have in the account and what risk they are exposed to from the get go.

This will be my forth business bank account with HSBC so I know how to fill out the forms, what to expect from their team and the hurdles I need to cross.

In the long terms will we stay with HSBC? I doubt it unless our business grows drastically to over £1 million. The major problems I had with HSBC are that unless you are a sizable business they really don’t care and are faceless in communicating with their customers. When you need something from them you have a long drawn out process and no ability for them to be flexible. Business colleagues who are running large turnover businesses can’t speak highly enough of HSBC as a personal bank manager is appointed. Until you get to this point you are going to feel very lonely. It’s very likely once the business has a trading history of just 3-4 months we will move our banking facilities.

I don’t want to open the flood gates but I would like to hear from other small businesses on arranging their banking.