Diary Entry: Why my first business idea didn't work

Hey guys. So as much as I love posting random stuff on here the whole point of this site is to relaunch myself after music. I was thinking recently that I'm probably not showcasing that well what I'm actually doing with myself nowadays other than taking pictures of what I wear each day!

I decided a while back that I was going to persue a career in business. I knew I wanted to run my own business, and I had made some attempts with my own events and independent record label, but none of these had any real money making or long terms plans behind them. My first thought was to move into antiques or interior design. You can probably tell I'm quite passionate when it comes to these subjects, and after all what could be so far removed from music as antiques?!

My first idea was a line of temporary, self-adhesive wallpaper designed by cool relevant artists that would be primarily aimed at people renting. It would be a way of decorating how you want and be able to remove it easily at the end of your tenancy. I spoke to a few well known street / urban / modern artists and all of them were up for it. So I had the idea, and people I had spoken to liked it. I set up a questionnaire on google docs and got 50 people or so to fill it in. The outcome was that people would pay around £20 a roll, and that in general, they thought it to be a great idea. They especially loved the idea of using modern street artists and that they would even pay a bit extra if the rolls were limited edition, i.e only 200 of each made.

I went about starting my costings. This, was in truth, a nightmare. This is what I needed to consider;

- Payment of the artists for their design (is this a royalty or an upfront fee?)

- Printing costs

- Paper costs

- Shipping the paper in (I found out shortly after starting that the cheapest self adhesive paper was in China. however, that meant shipping it over at cost)

- Shipping the paper to the printer

- Packaging (I wanted everything to be included in the pack, plumb line and all, which added on cost)

- Storage (where would I keep loads of rolls of wallpaper?)

This was just the start. It was extremely difficult to cost up as the more paper you ordered, the better deal you got on the price. However, this meant storage (shipping costs stayed around the same or just a tad more). It also meant an up front payment which wouldn't allow me to do a trial run and see if the paper was right or how well the product sold. I realised that there wasn't a single place that could print, package and ship my wallpaper all in one, which would mean sending giant rolls of paper between factories. Not good: shipping costs mounting.

For some reason at this point I still believed it would work. Even with such high costs floating around I decided to do a predicted P&L (profit and loss) sheet. The first one I did, in hindsight, was me amusing myself. I guessed at selling 50+ rolls a month to start which was probably ridiculous for a start up brand. I guessed at selling a certain amount wholesale to DIY stores and other wallpaper companies but soon found that they would take over 50% of the profits. I also worked out that as the months went on I would always have to be ahead of myself in ordering paper in order to keep up with the supposed demand. The more paper I sold the more I needed to ship over. It was just evening itself out. Everytime I would make a profit, I'd need to spend a load again on paper and shipping. I also had worked out that I'd pay each artist to license designs for 1000 rolls, so every time I sold that I would have to re pay them. I then did a new P&L sheet being really strict. I put that I'd sell maye 5/6 rolls a month to start and went from there. Even this way it would still take me at least 3 years to start making a profit, and at times the debts would be running into the tens of thousands. I would need a loan or an overdraft more than a deposit for a house. A big house.

EVEN THEN, for some reason I still found this acceptable! I heard the stories of 'every business takes 3 years to break even' and 'every start up has huge debts at the beginning' etc etc... I wasn't disheartened. I believed in the project entirely and I knew it would be a great product.

I went to the library and downloaded loads of market research on wall coverings and the DIY market. I started my business plan. I thought of a company name. I was getting somewhere...

But the costs still didn't add up. I also hadn't found any printers that could print on the type of paper I would have been ordering (they also couldn't put it through their machines at the size China would be sending in, so it would have to be specially cut. They also told me the kind of paper I would be suing was harmful to the environment). I rang printer after printer to be told 'we don't offer that' with no leads as to where to go next. The final nail in the coffin came when I was told by one printer, who had finally said it MIGHT be something they could do, that to set up the printing rolls (the thing they use to print the pattern onto the paper) it would be £1000 per roll, and I wanted to start with at least 6 designs. The rate at which I'd predicted I'd sell, I would have had to spend another 6 grand every 6 months or so on new printing rolls with new designs.

And that was it. The costs were just too high. The idea was great, but this was a project for an existing wallpaper company or a company with huge financial backing. This wasn't something I could do on my own. I had a vision of me in cool unique shops and on market stalls selling my fashionable and ever so now self adhesive wallpaper, not directing orders from China and negotiating shipping costs.

In short - the lesson I learnt from this was:

Keep startup costs low! What is the point in starting a business if within months it will be in tens of thousands of pounds debt?

Maybe if I had read some of these books I wouldn't have spent 4 months planning a no-go project!

I then moved on to business ideas that required little, or no startup cost. The next part of this story, my 'How I Got Rich' story, will be coming soon :)

S x

P.S I have obviously edited this story down loads, if you have any questions or would like any more detail on anything let me know in the comments!

Comments

[golidecocks]

cool

[Yokel]

Give tips on how a 17 year old can make money PLEASE

[Sarah Akwisombe]

Hey YOKEL! Great idea. In fact I will do a whole blog post on it. I asked around and a few people had these suggestions, that aren't all great but see what you think..

- Start your own business (doing what? Depends on what you're good at and will take time to make money)
- Do a car boot sale
- Start an eBay business
- Become a professional gamer
- gamble
- take part in market research

What are you good at, or what are you into?

Sarah x

[Yokel]

Thanks for replying

I'm good at communicating (can sell things easily), did DJing for some years I was alright, business related things, and just pratical things in general. I'm into music, football & B-ball but I don't see how thats money making related lol

As for the list I could do all of them except for the car boot sale. Thanks & im looking forward to the blog post!