In Friday’s post, we introduced you to Laura Andrews, who recently formed her company ‘Beauty Organics Skincare and Cosmetics. The company has yet to be launched and we are going to join her on her journey to get her business off the ground. In today’s post, Laura gives you an insight on how she planned to finance her company.
“Starting your own business is a massive commitment and once I had the idea for my brand and what I wanted to achieve, I knew it was time to start looking at how it was going to be financed. At this stage, though I had completed a basic business plan, I had no real idea of the market , my initial cost or – indeed – if the concept would be commercially viable.
In my mind, I thought that the two main initial overheads would be production and marketing costs. I wanted the brand to be marketed primarily online, through online PR and pay per click. I knew from previous experience that the online cosmetic sector is highly competitive and therefore getting the right message in front of my target audience may be quite expensive.
I decided that the first place to start would be to get some quotes from some web designers. As we wanted the website to be more than a brand platform – we wanted it our customer to be able to buy online – the brief was quite complicated. The price of all the quotes we received reflected this, however, there was one designer who was more reasonable and seemed to understand what we were trying to achieve, so we asked him to start work.
The next thing was PR – I had worked with a number of PR agencies in the past and therefore, I was well aware that their services were costly. At this stage I knew that we wouldn’t be able to secure funding from a bank – the credit crunch had just hit and all we really had were a few projections. However, as luck would have it, we came into some additional funds and decided we would invest the money into the business.
While the website was being developed, we switched our focus on to finding the right PR agency -at the right price. As budget was our main issue, I decided to approach the situation in a different way – I prepared a brief of our objectives and asked agencies to pitch for launch activity rather than the whole account. That way, I wasn’t making a long-term commitment and could get an idea of what the various agencies were like.
Before launch activity began, it was vital that we carried out some pre-launch PR and market research. Again, instead of outsourcing this activity, I decided to take matters into my own hands!
This was what I have completed so far, without the help of an expensive PR agency:
– Sending samples to various celebrities
– Drafting a press release and sending it out a number of high-end monthly magazines
– Creating a ‘holding page’ website prior to launch with contact details, a place interested customers can insert their email addresses and our brand mission statement.
– Identify our competitors and analyze their marketing activity.
During this time, I also created a more comprehensive business plan, detailing short, medium and long term projections and applied for funding at three major banks; I thought that the website, results of pre-launch PR activity and the substantial financial commitment that I had made, would be a more attractive proposition ,than when I had initially started the company formation process.
The first two bank srejected our application -they felt that the proposition was still to ambiguous in the current economic climate – however, we managed to secure funding from the third bank.This additional revenue allowed me to expand my team – more of that later!