I started my first business because I didn’t know what else to do at the time. I was coming towards the end of studying for a degree in Transport Management and wasn’t sure if I wanted to pursue a career in that industry, or start a ‘traditional career’ at all. So when a friend mentioned that there was an opportunity to purchase a record shop that was closing in Middlesbrough, I figured ‘why not’? A few months later, we were the proud owners of our own business, very wet behind the ears and jumping in at the deep end feet first.
Music was a huge passion of mine – I probably spent more time at university following music related pursuits (DJing, clubbing, hosting a radio show, helping in the local record shop and organising events) than I did studying, so the thought of being able to make a living from doing what I enjoyed most was very appealing.
Those first stages of starting the business were a mixture of excitement and very fast learning. We managed to persuade our families to loan us some money to get started (about £10,000 in total to purchase the business, take over the lease and invest in initial stock, fixtures and other bits and bobs) but we knew nothing about business – from marketing and money, to customers and credit card processing, to insurance and ink cartridges, we had to figure out the whole lot. And trust me there was a lot. There are so many things that you don’t think about until you start planning and then a whole load more things that come along once you’re actually doing it.
We prepared by writing a business plan, forecasting our expenses and working out what we’d then need to sell in order to be successful. In reality the business didn’t follow this written plan but the research and planning that went into it was invaluable. It made me acutely aware of all the little extra costs involved – carrier bags, flyers, price stickers and stationery are all seemingly insignificant expenses but quickly added up.
As there were two of us running the business we split responsibilities with my business partner taking the lead on running the shop and marketing, while I worked on the financial and online aspects of the business.
One area that we thought would be easy, but quickly turned out to be the complete opposite, was getting customers through the door. On our first day we eagerly opened expecting local DJs and music fans to turn up. And guess what? Nobody came in at all. We realised we were up against it.
The next few weeks and months saw us trying as many things as possible to attract customers – we paid for more signage, attended as many events as possible where we could talk to DJs, started our own small events, ran competitions, stuck up posters and handed out flyers, tried to attract PR, posted on message-boards (back then Twitter and Facebook didn’t exist!) and generally put in a lot of legwork. Slowly, but surely the customers started to come along and check out the shop.
Once they were in the shop, the next challenge was to make sure we had what they wanted. Dance music can be a fickle sector, with genres and artists quickly coming in and out of popularity, so we constantly had to be listening for what customers wanted and adapting to trends. It’s regularly mentioned in business that the ‘customer is king’ and this is forcefully hammered home when you realise you don’t quite have what the person standing in front of you wants to buy.
After a little while we realised that there simply wasn’t a big enough market in Middlesbrough to only target DJs as our customers,so we had to be flexible and came up with a number of strategies:
1. Product diversification - We started to sell a wider range of products to appeal to more customers, including t-shirts, vinyl care products, DJing equipment, tickets, magazines and a wider range of CDs.
2. More personal service - We also asked customers to give us their wish lists and then spent time tracking down the hard-to-find music they wanted. Customers appreciated us going this extra step for them.
3. Exclusive products - We formed a partnership with a very popular local event and became exclusive stockists of their CDs and merchandise.
4. Additional sales channels - We focused on developing an e-commerce website so that we were not restricted to only selling to people that lived close enough to visit the shop. We also started selling on eBay and specialist online music marketplaces, using their wider reach and the accessibility of the internet in order to find new customers.
All of the above helped to increase sales to a level where the business was able to support itself, but it was apparent that it would not be a long-term proposition. The shop closed three years after opening and the business continued online for a further two years. The retail industry is notoriously difficult and with sales of vinyl and CDs declining because of the rise of digital downloads we knew that ultimately there wasn’t enough demand to sustain the business. Getting out at the right time was far more sensible than struggling on.
Looking back there’s certainly a lot of things I would have done differently given my time again, but equally I wouldn’t change the experience for the world. The learning experience was huge and set both my business partner and me up with the knowledge and determination to go on and launch other more successful companies.
The mixture of excitement, fun, enthusiasm, control (and also trepidation) that comes from starting your first business is an electrifying feeling. I feel very fortunate that through the work we’re now doing at Transmit Startups, I get to relive some of this feeling every day through the new businesses we help to support.
Ian Straker is Operations Director at Transmit Startups.