Growing start-ups

When starting up a business the most common issue facing would-be entrepreneurs is cash f low. This was certainly the case for Hannah Chapman who set up a scented candle business. Like many start-ups, the business was started from her family home to save on unnecessary overheads. In the age of social media, marketing and getting your brand name out there is arguably a lot easier and considerably cheaper than it once was. Setting up a website and an e-commerce aspect allows for much lower fixed costs. However, for a company making scented candles — the variable costs are still considerable and, with a lot of demand for her products, she was having to reinvest in new stock to match the interest in the product. Hannah even had to temporarily put a message on her website saying that they were not taking any new orders for 2 weeks so that she could match the supply to meet the demand. This was a risk as it could have put off potential customers, but it was also important to decide to potentially scale up production or call it quits. The percentage of businesses failing within the first 12 months of operation is very high and it nearly always comes down to cash flow issues. However, the 2-week period allowed Hannah to come up with a plan to scale up production in stages over a 6-month period and meet with her bank to agree a course of action that would secure the necessary finance.

The company is now operating out of several units on an industrial site in her hometown of Andover and she has managed to scale up her production to such an extent that in 2020 she enjoyed revenues of over £2.2 million and over £3 million in 2021 and is now employing over 30 staff. The company can still lay claim to producing handmade candles and has now expanded their product range to include wax melts and diffusers. They are also targeting the vegan market and have been accredited with the Leaping Bunny standard of producing goods that are committed to being cruelty free and against animal testing. The company has since become a private limited business, which gives Hannah more financial security. This is an excellent example of taking a hobby and turning it into a commercially viable business.