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Julia and Jeremy Minchin, parents of three and entrepreneurs of one, are coming to terms with the fact that small businesses, like children, grow up fast.
The couple’s eldest son Tom was nine months old in 1999 when Julia founded Hippychick, an upmarket parenting products business, from the kitchen table of the family home in Bridgwater, Somerset.
Julia had already tasted life in a start-up as marketing head at Cobra Beer and was keen to start a business of her own. Jeremy joined a few months later, quitting a desk job at the Metropolitan Police, and Tom became chief tester.
Hippychick’s launch product was the Hipseat, a baby carrier in which junior is held on a ledge strapped to the user’s middle.
The company now sells a range of items, from baby boots to mattress protectors, many of which are distributed under licence through Mothercare, Early Learning Centre, Boots, John Lewis and about 500 independent toy shops.
“We are not inventors, but we are very good suppliers,” Julia says. They have also achieved considerable success with exports, selling to 45 countries.
The Hippychick workforce consists of just eight people, but the Minchins are under pressure to expand as the business has hit a period of high double-digit growth.
Turnover for the past financial year was £1.2m and is expected to hit the £2m mark during the current 12 months of trading. In three years, the Minchins expect turnover to be £5m. “It is a big jump,” Jeremy says, noting that the increase in sales forecast for this year will be more than the entire turn-over in 2004-05.
Getting the right product mix is crucial and Julia, who oversees marketing in the business, would like to have more Hippychick branded products.
The Minchins are reluctant to expand into some areas, such as clothing, however. “The rag trade is very different to ours,” Jeremy says. “If it is fashionable you can be left with an awful lot of unsold stock.”
Operations have moved down the road from the Minchins’ home to a
6,000 sq ft warehouse. They have avoided outsourcing distribution in part because of horror stories they have heard from others and are now considering taking a 3,500 sq ft space, which has become available next door.
“We really don’t want to be changing our physical location for the business if we can avoid it,” Jeremy says.
Renting the additional space would cost another £15,000 a year, but Jeremy believes that doing nothing is not an option. “Maybe we should take it on and sublet it for a bit. We would have to move in a year anyway.”
The Minchins claim their business partnership works because they complement each other – Julia concentrates on brand-building and her husband manages sales and negotiations. But they realise that they can no longer rely on their own skills and energy alone.
“You cannot be good at everything,” Julia says.
The business could probably do with a non-executive director or mentor, she adds, although she has yet to seek advice from her old boss at Cobra, Lord Bilimoria, who now supports other start-ups as visiting entrepreneur at Cambridge University.
“We sometimes wonder whether we are thrashing around harder when we could make more progress by getting in someone who can see a different way of doing things,” she says.
Delegation is also a priority as the business grows. “Jeremy has a photographic memory, which is fine when he is in the office but not when he isn’t.”
Trade fairs, where Hippychick picks up a lot of sales leads, are a classic example of the need for more manpower, according to Jeremy.
“We go to something like 14 trade fairs in the course of a year. That is 14 weekends that start with you on the Friday or Saturday to set it up. Then you are there all Sunday, Monday and Tuesday, breaking it up early Wednesday. You then have to unpack it all and deal with the mountains of paperwork and e-mails waiting at your desk.”
Hippychick has hired a head of sales and sales assistant, who help with such events, but Jeremy admits he still has to resist the temptation to interfere.
“I am naturally a bit of a perfectionist. I want to see everything done how I want it to be done.”
Cash management is a key concern. Hippychick’s bad debt ratio has been a fairly impressive 0.3 per cent of turnover, but in recent months has been moving up towards 1 per cent.
They have debt insurance for orders more than £500, but this does not cover supplies to most small independent shops. Getting upfront payment from these retailers in return for a discount is one way the Minchins manage the problem.
They are also considering invoice discounting and trade finance, although this incurs a charge from the companies providing such a service.
“If someone can show me a better way I will take it,” Jeremy says.
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