The latest business to feature in our section profiling exciting companies in the small business space is Beauchamps of London – a venture led by entrepreneur Alex Fagan producing high-end leather goods for a discerning customer.
She started off with a fashion business, but after a few years realised there was a big market for creative design in the corporate industry. In days gone by, when big businesses wanted to gift employees with a nice piece of stationary it ended up being a choice between something in the Moleskine price bracket and something in the Smythsons price bracket.
Fagan was careful to not simply fall between those two price points, as there is a reason buyers plump for affordability or absolute luxury, but believed there was a gap for a range of products that were relatively inexpensive but well designed.
“When I started in fashion it was all about getting my goods on the right person, creating the right press,” Fagan said. “With the corporate brand, it has been about selling direct to these types of businesses rather than getting retail space.”
When we asked her whether the demand, from corporates, for luxury goods has returned since the recession, Fagan explained that the global downturn made it acceptable to not spend anything – so budgets are lower now.
However, the more affordable nature of her luxury goods seems to fit in with a trend of slowly growing gift budgets.
Struggles for Fagan have centred on cash flow, and the chicken and egg situation that comes from developing an idea at the start without any capital. “You can’t get financing if you don’t know what you are, but you can’t find out what you are without financing,” she commented.
To get the price point she concluded corporates were after, Fagan had to boldly take the step to work with China – which created an accountancy problem. With the help of KPMG Small Business Accounting, she has managed to navigate round this – as well as the issue thrown up by corporate contracts. “I do lots of consulting now to help others with what I’ve learnt in the last four years.”
Quite surprisingly, Fagan believes that Chinese suppliers are actually easier to work with than European ones. “If you build a good relationship with a Chinese factory or supplier they will work really hard and are very reliable,” she revealed.
The process of working with China has been a steep learning curve, but one made easier by having a British factory for support. When one of her British factories found out its Chinese outsourcing partner had gone bust, it took the decision to build its own base in the Asian nation. “I learnt all about dealing with China through them, and had my hand held the whole way.”
Fagan has now built up a solid roster of corporate clients, showing that her decision to build that kind of offering alongside her traditional fashion line was a good one. So if you’re a small business owner that is looking for a way to treat some of your staff this Christmas, you could open up a new revenue channel for Fagan.
If you want to hear about the entrepreneur that inspires Fagan, and what her tips for those just beginning their business building journey are, then have a look at our video interview below.
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