Margaret Morrison - Founder, Cybercandy
"Our love of kitsch, international sweets led us to set up Cybercandy in 1999. I'd been shopping for my partner, Allan (who's also the MD) and thought how great it would be if you could buy all these cool sweets in one place. One of the fun jobs is the product sourcing overseas and online.
We employ five full-time staff in our warehouse and 12 part timers in our Brighton and London stores. Our customers tend to be between 20 and 30, and like the products' design and nostalgia elements. This year, our turnover will be around 1 million.
We've grown organically and any money we've made has been ploughed back into the business. We're very keen to maintain control, and would find it hard to sell to investors or to a third party. However, we need to consolidate before we can expand.
The web site needs a refresh: it has to work harder and look better. We'd also like the stores and our online presence to complement one another better and to make more of our brand identity.
This year, we hope to streamline the product range, identifying what's selling both online and in-store. It will be the first time we've properly analysed our data and we need to make more informed desigions about what and how much we pruchase. I'd like a core of bestsellers with seasonal or holiday ranges that come and go.
Shipping and transportation are our biggest costs, and the rental on the two premises is high but we believe that our customers really enjoy shopping in our stores. Also, once they’ve visited, they’re more likely to shop online.
We explored in-store concessions a few years ago and a big department store was interested, but that simply spurred us on to open our own shop.
Now that we have a baby, we could do with scaling back our hours. We need a middle management layer and to develop a strategy to exit the business."
Retail expansion - Greg Thomas (Online business consultant, The Retail Doctor theretaildoctor.co.uk)
"It's fundamental that there’s a brand connection from the website through to the stores. Retail space is a fantastic ‘window’ for the website operations, but you must know what’s driving sales and, equally important, profit. Is it the website or the store that is providing the turnover?
You also need to consider the operating costs involved in both operations. If you look at your business dispassionately, the answers will probably be there in front of you. Then, it’s up to you to make a decision about where to focus the growth.
Retail expansion will tie up a lot in capital costs and could limit cash flow. Concessions, with their lower build costs, could be the answer here, though you would normally pay a percentage fee on your turnover. On the other hand, the website could bring in immediate sales growth around the world. Significant improvements could be made in terms of branding and design. Also, more attention to search engine optimisation and marketing will pay dividends, as online is just as important as offline.
At this stage, middle management may just add a layer of non-essential cost, especially if you are recruiting from outside. It depends on the present set-up within your stores. Perhaps, to start with, you should consider using the services of a consultant on a regular basis. They will be able to help you find, and implement, some direction.
As for developing an exit strategy, you’re absolutely right. As you probably know, you should have one right at the beginning. But it’s never too late. Build in a three- to five-year exit plan that fits in with what you want – and work like crazy every day."
Business consolidation - Laura Tenison, MBE (Founder and managing director,
JoJo Maman Bébé jojomamanbebe.co.uk)
"My initial reaction is that the owners of Cybercandy are giving out mixed messages. They wish to take their company to the next level, yet they are keen to downscale the time they allocate to it. To grow a small company while ensuring a good work/life balance involves some sacrifices.
I’d suggest the partners divide up their roles. While it’s fun to source products internationally it would be dangerous to both be away from operations. One partner should concentrate on buying and operations while the other works on brand identity, marketing and ecommerce. The partner doing most of the childcare should take the second role, which involves less travel and can be fitted around a growing family.
The product range is impressive, but I fear many of the lines may be losing money due to small order values and distribution costs. Product sales should be tracked against forecast and previous year, to ensure they’re still viable. The core product range should be refined seasonally and probably downscaled.
If the partners want to build the company for an exit, I’d suggest they concentrate on brand identity which will require product development. Their USP is appealing, but the true winners in this market are the manufacturer/retailers such as Hotel Chocolat. By developing their own confectionery, based on their research from around the world, Cybercandy’s product range would be exclusive and could be marketed at all levels, including wholesale.
If their product is unique and well received, they should increase the value of the company considerably by establishing a precedent for a national roll out."
Website development - JP Anderson (Head of BT Web Consult and Build, btbroadbandoffice.com)
"Cybercancy gets good volume and quality of traffic to its website via search engines, and I imagine it gets many diverse orders for hard-to-source products. But, with some basic problems ironed out, it could be improved even further, which would lead to a big uplift in traffic and sales.
What’s lacking in the site is a good user experience that will get them more than just the one-off sales. It needs to be redesigned in such a way that the customer is put in a virtual shop window.
There are many things I could cite, but a good example would be to have a grid layout of product images for their category pages. This would make it easier to navigate their pages. The shopping basket looks like it’s been left over from an earlier incarnation of the site, and needs to be integrated into the current look and feel. Rebranding would also play a big part in this.
If Cybercandy is looking at growing its business further, then it will need to keep its shipping and processing costs in check, and make these clear to the customer. They currently have free UK shipping on orders over £60 but could consider creating a more structured set of shipping zones to truly reflect its costs.
Redeveloping its online business, improved search engine optimisation and good content, would transform it into a new and feature-rich ecommerce system. This could be easily achieved, and I’m confident that it would push turnover to the £2 million mark."
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