It's amazing what you can come up with down the pub. Newcastle-based software operation My Business.com, which has so far attracted more than £5m in funding, was first conceived over drinks between former Sage employees Mark Searles and Oliver Stephens.
"We were just chatting about what we'd like to do next," says Searles. "We'd both worked with small businesses and we realised that there was no software out there to help them automate their administrative tasks. So we thought about it some more and then sketched an idea. I was doing some consulting for 3i at the time and I happened to mention it to them one day. They liked the idea so much they brought us in for a few meetings. We got help from Deloitte and Touche and within four months 3i had given us £2m.
The idea that wowed the people at 3i so much was a flexible, affordable, easy-to-use, integrated software system that would pull together a business diary, accounts and database so that all or most of their business's functions could be operated from this one system.
It sounds so obvious you would think someone would have thought of it already, but nobody had. "In fact, when we did some research we realised there was nothing in the world that did this," says Searles.
Doing research in this country they found that 90 per cent of small businesses (those with five employees or fewer) do not use any sort of business software. Yet 60 per cent of the work done in any small businesses is administrative.
"Usually businesses will write an invoice in something like Word," says Stephens. "They'll then have to input it into Excel which they usually use as their accountancy package. They'll need to make a note of it in their diary to chase up and will probably want to re-input the contact information in a separate database like Access. So they're doing the same job four times.
"There's a huge number of 'Sohos' around – Small Office, Home Office – which are basically people running their businesses from home. They tend to have a lot of admin but no easy, all-encompassing software to do it for them," he says.
With this in mind, they knew they had a market, they just had to produce the right kind of product for it. It took them nearly three years to develop the plan and get to the stage where they could actually launch the product.
"We were developing something entirely different and that's a very expensive thing to do," says Searles. "The first thing we did was hire a financial director and a technical director. Then we looked at several software design companies to find the people who could put our ideas into effect. We needed to design a product with an integrated approach to management including books, diary, contacts and job management. We wanted users to be able to see all round a job, whichever part of it they have open on the screen."
The product they finally launched at the end of 1999, like the follow-on packages they have produced since, was a colourful and flexible software tool that businesspeople could tailor to their own needs.
They now have four products on the market: My Business Easy Books (£39.99 for an annual licence); My Business Essentials (£99.99 for an annual licence), which includes simple stock tools management and can be networked; My Business Complete Manager (£149.99 for an annual licence), which has all the features of Essentials together with extras such as designing your own correspondence, direct mail, mail merges etc; and their most recent product, My Business Payroll (£99.99 for up to 10 users).
The products are also networkable. Unlike many software companies that charge large amounts per user per year, My Business products cost a one-off fee for each user and only the annual licence for the first user needs to be renewed. This licence includes help with software installation and as much support as you need.
Having spent a long time producing and launching the software, the next stage was actually selling it. Here they have found more creative ways of promoting the products than just advertising.
"We did a few national ads to start with, but our approach is more about working with organisations that deal with small businesses," says Searles. "Creating a brand costs a lot of money, but by working with banks, accountancy organisations and Government bodies we get to small businesses more directly. We find it's been more efficient to target them first and get them enthusiastic about our product so that they recommend us to the people they are helping. Now local Business Links recommend us and even install the product for us.
"Ours is the only product endorsed by SFEDI, the Small Firms Enterprise Development Initiative. We've also found PR to be a very good route for getting our name across, and we're starting to be asked to give quotes to the press and media on business issues."
Even before they thought of My Business.com, Oliver Stephens spent much of his time giving advice to small businesses through the BSBI (The Big Small Business Initiative), which gave him an insight into the needs of smaller concerns and also gave him the contacts that have helped push the company forward.
"Once a month, I speak to 3,000 small businesses at events organised by Customs and Excise, giving them advice and help," Stephens says. "It gives us more understanding of what small businesses need and of course it gets our products known. We also recently did an event at St James's Park football ground in Newcastle for small businesses. There were various other companies and government agencies there giving seminars and having stands. It all helps us to get seen and known by the right people."
Having started with a staff of just two, Searles and Stephens now employ 24 people, but they have no plans to become a large conglomerate or move into other areas of accountancy.
"Even if we go global, we'll still concentrate on small businesses," says Searles. "We don't want to go into the mid-range or big companies arena because those are already very well served by software companies. Our whole ethos is to provide products that will deal with most aspects of running a small business. We don't want to be huge. It's about providing core products and being bloody good at it!"
"We sold over 5,000 units over the last year," says Stephens. "But we've hardly scratched the surface. There are hundreds of thousands of small businesses in Britain alone and they could all benefit from our product. We want to make sure that we establish this market before we go global, but we know there are massive opportunities around the world."
Small Firms Enterprise Development Initiative – 0114 209 6164;
The Big Small Business Initiative – 0870 870 1165 or www.bsbi.co.uk;
My Business.com – 0191 242 7200Reuse content