Enterprise: Board game bonanza after boxing clever: Tricky charade put four on trail of a pounds 1.5m winner

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The Independent Online
ON THE promise of a red Ferrari within five years, James Sait gave up his job in 1986 to be the first full-time employee of Cheatwell Games. He is still waiting for the car but the board game company he founded with three fellow engineers has survived recession by selling the idea of having fun.

Building the business has not always been a bundle of laughs. Cheatwell was set up in 1986, barely in time to win a foothold before the slump in consumer spending threatened companies everywhere. Its founders had no experience of running a business or marketing but, with seemingly endless hard work, they have created a genuine success.

It all began in 1985 as Rob Eatwell was thinking about charades while taking a bath. 'How would you do a mime of Canada?' he wondered. Clearly, a question of such import needed solving. He and Jon Church hit on the idea of charades played on a board, and Masquerade was born.

In an attempt to be different from the competition, the original packaging was a white triangle. That was, perhaps, their first mistake but it was one that marked the beginning of a learning curve.

In that first year, they sold the game to Hamleys, Selfridges and Virgin. Turnover was pounds 5,000. Things were looking up - the Ferrari was almost on order.

But when they went into Selfridges to look at their product, they couldn't find it. They realised that a plain white triangular box, far from standing out among its bright rivals, vanished. 'We were quite

naive then, not at all aware of merchandising,' says Stuart Minster.

They converted the box to a standard, brightly coloured rectangle but used a large number of original component parts, so that none of the outlay was wasted.

Now they make things more conventionally. 'You can't afford to be too innovative in this industry because it alienates the customer and the retailer,' says Jon.

Once repackaged, Masquerade took off. The first key account they picked up was Debenhams. Then the game hit WH Smith, House of Fraser, Athena, Argos and John Lewis.

The next stage was to decide whether to continue to focus on Masquerade or to bring out new products. Cheatwell launched Omweso, a massive flop. It has been their only disaster.

The company's next idea was the pocket concept - games in an innovative card dispenser. These games were launched in 1989 and turned out to be a saviour. Masquerade went pocket-sized, and has been followed by nine others.

Another significant move was to target cheaper products when everyone else was moving up to pounds 15 or pounds 20 and beyond. When recession hit at the end of the 1980s, most of these companies failed, while Cheatwell survived.

The key was to keep overheads down. None of the founders took a salary for the first three years. The essence of their business is subcontracting. All components are sourced elsewhere and delivered to a warehouse where they are assembled.

They have begun to tackle the European market, with some success. The pocket range, in translated form, is selling in Germany, Austria and Sweden.

Cheatwell now produces more than 25 games and the range is stocked by most of the blue-chip retailers. The company expects turnover this year to exceed pounds 1.5m.

The founders financed the company themselves, so they are not burdened by debt.

'If we were a public company, our shares would be very valuable because we have no exposure. We had a pounds 25,000 line of financing from the bank at the beginning but used very little of it. The total capital employed is high but any profit is reinvested,' says Stuart.

The company brought out eight new products last year and eight more this year. The founders have decided that they must consolidate and develop the marketing and distribution of those.

Within a couple of weeks, a new range, Host Your Own, will invade the shops. The company spotted a niche that is partly filled by murder mystery games, which supply an evening's entertainment but - unlike Cheatwell's - can only be played once.

'Our corporate aim now is to survive and to grow and to be profitable, and to be well- respected in the industry. Our business is games but, for us, the business is no longer a game. We are now a big player in a pounds 150m industry and we are going to continue to grow,' says Stuart.

(Photograph omitted)

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