On the up Fred Heritage · 16 December 2016
Making your first million pounds:insight from three entrepreneurs who achieved the magic mark
Most small business owners dream of reaching the often elusory first million pounds in turnover. As an owner of a small firm, taking a seven-figure amount in any given year can sometimes take a very long time to achieve but, once reached, the milestone can be viewed as an indicator of business success and sustainable growth. But what does it take to reach the landmark, and what can new business owners learn before starting out that will help them reach it? For entrepreneur Jane Michell, taking her business out of her home and finding the right working space was a key step. The former hospital worker set up online diet delivery service Jane Plan in 2010, and her small team of six employees works to deliver portioned, calorie-controlled ready meals to customers? front doors. moving out of the home and into an office in 2012 was an important moment for us, said Michell. It allowed us to increase our output massively. Another key decision was to start advertising on television, it seemed like a risk at first as it was a big expense for a small company like ours, but it’s paid off. Television advertising campaigns saw sales figures for Michell’s ready meals skyrocket, and the business? turnover has shot up rapidly as a direct result, increasing from 660, 000 in 2013 to roughly 5m this year. But it hasn’t always been plain sailing for Michell. We recently had a huge setback, she explained. To streamline the business, I outsourced our warehouse packing requirements to another firm. who we hired didnt take the same level of care we do when creating and packing our meals, and deliveries were often late. At great expense, I relocated the business to a third warehouse. One area of business development that Michell has yet to look at, but that is common to many small companies looking to breach the first million pounds turnover mark, is exporting. Getting a foothold in one or more overseas markets can often be the decisive move to elevate a business to that next important stage of growth. This has certainly been the case for Gumme Glove, the UK startup manufacturing the world’s first teething mitten? for babies and toddlers. Designed to help with the teething process by giving infants something to chew on, besides their hands, to ease their sore gums, Gumme Gloves? range of different colours and sizes have become popular internationally as well as the UK. Set up four years ago, the business struggled to make money at first, before agreements with distributors in Australia and the US took the company’s 2016 turnover over the first million pounds level and gave founder Jodine Boothby a much-needed confidence boost. Boothby advised fellow new business owners to think globally from the outset. From a turnover of less than 40, 000 in year one, finding an Australian distributor to begin exporting gave us 220, 000 turnover in year two and 345, 000 in year three, she told Business Advice. it’s all about networking, added Boothby. People buy from people, no matter where in the world you go. We travelled to a trade show in Las Vegas in 2013, where we met our US distributor. We invested in innovation and changed our product, and made significant gains in terms of turnover, on the back of one chance encounter. Boothby encouraged business owners looking to take in their first million pounds to not be afraid of competitors, and to learn from them. When other companies started manufacturing similar products, it gave us a kick up the backside and we focussed more on the quality of our product. Competition should help you become proactive rather than reactive, she said. For a lot of business owners, achieving an annual turnover of seven figures or more is about perseverance, and a simple belief in your offering, more than anything. Like Boothby, co-founder of online fitness company LDN Muscle, Tom Exton, told Business Advice that to reach this first major milestone in the lifetime of a venture required sticking to your business’s core values. our approach is honest, and not mirrored by any other fitness company doing what we do, Exton said. The company reached this important step because were passionate about the business all four co-founders. LDN Muscle, which in three years has become the UK’s leading provider of online downloadable weight training guides, was set up by two sets of brothers, all hailing from South West London with a passion for health and fitness. From a year one annual turnover of 240, 000 in 2013, the company turned over 1.5m this year, demonstrating steady growth.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.