How to get a business off the ground

[Clitheroekid]

I was recently talking to a client who described a business idea to me, which unlike 99% of such ideas actually sounded really good.

But he doesn't have the first idea of how to go about actually doing it. He's a very intelligent guy, but he's a high level NHS manager, and knows effectively nothing about the practicalities of starting a business.

Money isn't a problem. He's independently well off, and I've no doubt he could easily fund the business.

The problem is that it's not really something he could just start from his kitchen table and build up. In order for the business to work he needs to create a simultaneous presence in a minimum of around 500 retail shops. He also needs to arrange the manufacture and distribution of the (fairly simple) products for installation in those shops, and he would also need someone to design an app that would provide a link between his business, his customers, the shops and the installations to make it all work.

Of course, he also needs to sell his idea to those shops in the first place, though I don't think he'd have much problem persuading them to join in. But what's the sequence of events? Who should he approach first? He's rather paranoid about someone else stealing his idea, but how can he carry out market research without disseminating the idea very widely, and therefore taking that risk?

It's rather unlikely that he could sell what's just a vague idea to the shops, but it also seems stupid to spend a substantial amount of money setting everything up ready to launch and then discover that the shops don't think his idea's as good as he does.

I couldn't really help him, as I've no relevant experience either. I can easily advise as to the legalities of starting a new business, but nearly all the businesses in which I've been involved at the start have been one /two man band type businesses that were perfectly viable at that level and then went on to grow organically or by acquisition. This is quite different, in that it needs to be set up to quite a high level before it can be launched.

It really is a good business idea, and I believe it could be very successful, but it's pretty frustrating for him not to be able to move to even the first step.

So any ideas where he could get useful advice?

[poundcoin]

Of course, he also needs to sell his idea to those shops in the first place, though I don't think he'd have much problem persuading them to join in.

It's rather unlikely that he could sell what's just a vague idea to the shops, but it also seems stupid to spend a substantial amount of money setting everything up ready to launch and then discover that the shops don't think his idea's as good as he does.

Thinking of Dragons Den , does it need a patent ?

Without specifics it's difficult to advise but having once owned a retail business I think your statement that he wouldn't have a problem persuading retailers to join in maybe untrue .
I wouldn't have taken anything on until I knew there was a public demand for it ....didn't have the space to gamble with . Perhaps if it was on a sale or return basis where I didn't have to shell out for initial stock I might have considered it on a trial basis but it would have to be an exceptional product .
He may also under-estimate how difficult and time consuming it would be shlepping around the country signing up retailers . Many businesses in a town may want sole distributership .
Ideally he would want 1 retailer that had 500 shops ! Maybe approaching an agency would be the answer to sell for him ?

I'm assuming that it's a non-food item . The largest trade fair of the year is on next week at the NEC , where every major retailer will be going to see new goods and meet with suppliers . Haven't been for a few years but it is massive.
Too late for your client to set up a stall for this year to sell his wares but if possible it maybe worth him spending a day or two there to see if there are any similar products and how they are marketed by others .

http://www.springfair.com/Content/Visit ... 0wod7UoCgg

[poundcoin]

I should have said that at the above Spring Fair trade show mentioned above , as well as 100s of firms selling goods , there is an advisory section called Retail Solutions where all sorts of advisory bodies exhibit .

Link here to Retail Solutions section . You have to click on each name to find out what they do .

http://www.springfair.com/page.cfm/acti ... tID=14/t=m

[midnightcatprowl]

Unlike Poundcoin I'm going on the assumption that this is not an item of stock for the minimum of 500 shops to sell but some sort of device to help them sell or some sort of 'product' which you don't take from the store in your shopping bag but rather 'experience' in some way, i.e. that it is not just a 'better' teddy bear or another miracle anti-wrinkle cream.

But whichever of us is right or even if both of us are still way off the mark, I think his hope that he can sell an idea to 500 independent stores or one business with at least 500 branches without developing it first and having a fully working prototype in place which can be demonstrated illustrates the gap in thinking between salaried workers and those running their own businesses. Please don't think I'm being insulting, I have myself been a professional, worked in the public sector and later run my own retail business, so I've had a foot in all the camps and I understand how different the world looks from each of those camps.

The only way to prevent an idea from being stolen is to get a patent - if that is feasible for the sort of thing he has in mind. So you have to have sufficient faith in the idea to spend money on it, and then you have to have sufficient faith in the idea (plus money and time) to develop it to the point where it can be demonstrated to potential customers. Retailers tend to be an unsympathetic bunch because they have to put huge amounts of money/time/work upfront before they can sell anything and therefore ten to be sceptical about the ideas of anyone who is not doing so themselves. The other thing is that retailers are approached every day by people with miracle products, miracle plans, miracle services developed by those who know almost nothing about retail and who haven't done the calculations about just how much more the shop would have to sell even to cover the cost of X never mind how much more in order to make any profit out of having X. Even when the idea is really good in principle often when you do the calculations it simply doesn't work out. Also there is what you might call innovation fatigue with the constant flow of people trying to sell you the next best thing in retail involving everything from virtual High Streets (the fashion for the last few years), to illuminated chewing gum displays. So to sell to the 'ordinary' shopkeeper an idea has to be well developed, thought through completely in financial terms (from the retailers point of view!), and preferably offered on free trial in the first place.

I suppose the most risk free way to try to utilise a really good retail idea without investing your own time and money in it once you've got a patent for it would be to try to sell the idea rather than the product to John Lewis or Lidl or whatever type of retailer is your target for your idea in the hope that they will bear the development costs and pay you for the initial concept.

[Itsallaguess]

The problem is that it's not really something he could just start from his kitchen table and build up. In order for the business to work he needs to create a simultaneous presence in a minimum of around 500 retail shops. He also needs to arrange the manufacture and distribution of the (fairly simple) products for installation in those shops, and he would also need someone to design an app that would provide a link between his business, his customers, the shops and the installations to make it all work.

Of course, he also needs to sell his idea to those shops in the first place, though I don't think he'd have much problem persuading them to join in. But what's the sequence of events? Who should he approach first? He's rather paranoid about someone else stealing his idea, but how can he carry out market research without disseminating the idea very widely, and therefore taking that risk?

Aside from the good advice regarding patents, if it's possible to patent the idea at all, have all the possibilities been thought through in terms of potentially getting this thing off the ground?

You seem to suggest that he's got an 'all or nothing' approach at the moment, but I'd have thought that gaining some sort of working 'demonstration model' would be the quickest route to success on all fronts, if he could perhaps find the right independent retailer to work with him.

If the idea is so good, then giving a working model to a good, trustworthy independent retailer, with a view to that retailer possibly using it for free but willing to act as a demonstrator of the idea to help roll out the idea to other retailers, seems to fill in quite a few gaps in his current thinking.

On the face of it, the above seems like a low-cost and low-risk route to helping both prove the product, get it into a 'working environment', and also help demonstrate the worthiness of the idea to other potential retailers.

Of course finding a good, independent retailer who's willing to help with the above is going to be key, and may well involve other incentives in terms of getting the idea through, but it would be a shame not to give the idea a go if he's currently in the 'all or nothing' frame of mind with what might be a really good idea.

Further down the line, potentially doing the above with a medium-to-large sized retailer, who may have access to many more potential shops under their control, and persuading them to give the product a small-scale roll-out for proving-purposes also sounds like a potential route-to-success, and may be worth thinking about, but having access to a working model with some hopefully promising sales-data would help enormously with that second step, I'd have thought.

Cheers,

Itsallaguess

[poundcoin]

Maybe being former old fashioned bricks and mortar retailers we are looking at this from the wrong angle . Never had anything to do with apps . No idea how much it costs to design them .

With the person working in the NHS it's logical that the idea is somehow connected to health / chemist shops ?

Would the required app work as a stand alone platform first that's maybe adapted later for instore integration ?

If so , first thing may be to register a trade mark , register a suitable website name ,. Facebook ,Twitter accounts etc and then find an app developer .
Just a thought !

[redsturgeon]

If it is to do with pharmacies then that is my area of expertise.

There are several large chains of pharmacies that would be a route to market. It would be relatively easy to target a group/chain that was the right size and profile for a trial.

John

[poundcoin]

Has this board reached the far outer limits of TLF ?
Perhaps the OP's client changed his mind ?

[Clitheroekid]

Perhaps the OP's client changed his mind ?

Firstly, thanks for all the advice, which I've passed on, and which has been helpful.

The main problem as I see it is that because he's in a good but demanding job he simply can't invest the time and effort needed to get the business off the ground.

He doesn't need - or even particularly want - the money it would make, so there's no real financial incentive, and he therefore lacks the `hunger' that most successful entrepreneurs have in spades.

The only way that I can see it ever becoming more than a good idea is if he either takes on a partner to do the work or in some way licenses the concept to a third party who has the ability and resources to get it going. But finding such a person / business is just as big a problem as starting it himself.

[richill]

Money isn't a problem. He's independently well off, and I've no doubt he could easily fund the business.

Hmmm! this isn't necessarily a good thing.
Using your own money, and when you have plenty of it, can lead to dangerous complacency.
Raise a loan or even sell some equity. That way, your ideas will be seriously scrutinised . Also you will get valuable input. Most importantly if you are successful at raising the funds you will be put under serious and quantified performance benchmarks.
All in all , its the kind of oversight and pressure you need if you are on your own.

Richill

[brightncheerful]

My tuppence is to launch the business on-line (a transactional website). Start up cost circa £5000 (less if you know what you're doing, a lot more if you don't).

In my experience, shops won't order (buy) unless they can be assured of a resell and the rate of stock turn fits in with their modus operandi. Hence, the target market initially should be the end-customer: creating, stimulating and gauging demand would be the reason for having a transactional website.

Having launched and got the idea of the ground it would become easier to sell to shops, simply by steering end-customer enquiries their way (local stockists) or offering shops attractive terms to buy wholesale.

[mjbdreamer]

To summarise:
- Mr X has a nice job and doesn't want to move
- He has plenty of money
- He has a good business idea that has a high chance of success
- He doesn't want to be involved in the business or bothered by it too much


Maybe he should pay me to take his idea and deliver it to the market?
He just has to fund things until the money rolls in and it goes into profit. Pretty sure some arrangement can be found for this. He'll see his baby grow without the nappies and school fees to worry about.

[tea42]

If it's a 'me too' product he should forget it.

If it's a unique product he should protect it with a patent or copyright and perhaps market it through a wholesale business with companion products who already have distribution already set up.

In any case he should produce a first batch with packaging by funding that himself.