Homemade millionaires

Homemade millionaires

"All I had was a phone, a laptop and my determination." Sound familiar? For most start-ups, the kitchen table is the jumping off point, the first step on the road to serviced office, multiple staff and glass-fronted boardroom.  But how many entrepreneurs grow their businesses to any real scale from home? How many become homemade millionaires?

Far more than you would think, actually. Some entrepreneurs hit the headlines with their money-making home ventures. Remember Alex Tew, who founded his Million Dollar Homepage in 2005 at the tender age of 21? Launched from his kitchen table in Cricklade, Wiltshire, this venture chalked up a massive $1,037,100 gross revenue in one year. Others, however, stay firmly below the radar.

Barry Garner is a serial entrepreneur and innovator. In 1996, before most brand owners had realised the power of the internet, he had a brainwave. "I realised that loads of companies didn't have the domains for their company name or products," he says. "So I started buying them up: everything from Channel 4 to Alliance & Leicester, then I would sell them back to the corporations."

Business was lucrative but the real money-spinner was Garner's home-run domain parking venture, Traffic Parking International. "I developed a parking platform for all of my domains," explains Garner. "I could create an instant website in five seconds. It plugged into the web and created categories and sub-categories with advertising links, without the need for unique content." The platform was based on an early version of the pay-per-click model, with domain owners earning 50 per cent of all advertising revenue. This kind of holding page is now the industry standard for unused domains.

"The service went live in 2003," says Garner. "At one point, we were generating £250,000 profit a month". In 2008, Garner sold 80 per cent of the business to Webfusion, one of the UK's largest domain companies, for "a multimillion pound sum."

But the story does not end there. Garner still owns an enviable roster of just under 10,000 domain names. "I scour the internet, reading news, tech blogs and industry tweets looking for good business opportunities," he says. "If I spot a good lead, I register the domain name."

The jewel in his crown is gold.co.uk. "I saw all the 'Cash for gold' adverts earlier in the year, so I decide to acquire the domain," he says. "I ended up snagging it for £42,000. Three days later, I got an offer for £250,000. But I'm not ready to sell at that price - I'd be happy for a round million"

It's not just the domain entrepreneurs and affiliate marketing gurus making money from home. Wendy Shand, founder of Tots To Travel, founded her home business in 2006. Her travel company scouts out child-friendly holiday destinations and matches them to families in need of a well deserved break.

Shand keeps overheads down by using a supplier model for her business. "I used to check out every single destination myself," explains Shand. "But now I have 15-20 people trained in child accident prevention that act on my behalf. These agents work on a freelancer basis. They are based all over Europe and beyond and are all managed via the web, through teleconferencing, online training tools and mentoring."

Shand always intended for her business to be portable. Her husband is in the RAF and the family has moved three times in as many years. Nevertheless, Tots To Travel has sold over £1.6 million in holidays to date - the business currently operates out of the garden shed!

Doug Richard is a self-confessed 'disciple of the ultra-light start-up'. The Dragons' Den star and founder of social enterprise School for Startups says: "If you don't need offices, don't have offices. If you don't need another employee, don't hire them. You can run a business on very few pounds and do so effectively with less and less compromise."

Broadband and mobile internet has been a real life-saver for small businesses. Entrepreneurs can respond to queries, update their websites and process orders from just about anywhere. Lindsay Drabwell, founder of kids clothing e-tailer DaisyChainBaby, manages her business from home. "Because we're an online retailer, we don't have to invest in premises," she says.

Home working can lead to unorthodox working patterns. "I start work at 9am, then I stop at 3pm to be with my children," says Tots To Travel's Shand. "I usually start again at around seven and I try to stop around 9pm. It's amazing how productive you can be with a flexible work day."

Tots to Travel grew a whopping 97 per cent last year. The firm is on course for a £600,000 turnover this year, and will hit the million-pound mark in 2011. By 2015, this home-run travel firm is expected to have a turnover exceeding £6 million and over 650 properties on its books.

However, Shand admits that homeworking can have its downsides. "It is a bit frustrating when I'm playing with my children in the garden and I get interrupted," she says. "But then, I also get some of my best ideas in those kinds of moments. It's just important to draw boundaries: personal rules about when you work and when you don't."

David Brackin founded eBay business Stuff U Sell with Fraser Pearce in 2004.  The business proposition is simple: if you have any unwanted stuff, you can give it to these guys and they'll photograph it, create the Bay listing and sell it for you. Simple, but incredibly effective: StuffUSell has doubled in size every year since inception and is now selling as much in one month as they did in their whole first year in business.

Brackin started out operating from home, but when his firm began processing £1,000,000 worth of goods per year, he was forced to relocate to a warehouse facility. "Ultimately, when it's a home, you want it to be your home," he says. "Not to be full of bubble wrap and boxes. We worked from the spare bedroom for a little under two years. Who wants a windsurfer sat in their hallway waiting for the auction to end?"

But Brackin does miss the homeworking lifestyle. "Time," he sighs. "You don't commute and you start working as soon as you've made your morning coffee. You can take an hour off to do some gardening mid-morning, but you're still going at 6pm. Your time is yours to dedicate to what you need: you are no longer constrained by a traditional view of working solidly between 9 and 5."

The low capital requirement was also a big incentive when Brackin first launched his business from home. "Homes are spectacularly cheap compared with offices," he says wistfully. "Commercial rent, business rates, business prices on insurance, phone rental, etcetera etcetera," he says. "These are all expenses which you don't need to incur when you are piggy-backing off your home expenditure. Using the internet, and eBay in particular, means that you don't need the expense of a retail outlet any more."

And here's a handy hint: having a home or garden office can actually make you richer. Latest stats show that homeworkers actually increase the value of their homes by around £25,000.

Brackin does believe that working from a home address can carry a stigma in some sectors, however. "There's a real benefit to being able to tell customers your warehouse address and hours of opening: it projects an image of stability, and I think customers do like knowing there's a place they can go to," he says.

There are currently 2.8 million home businesses in the UK, contributing a combined £284bn to the economy. Some 60% of small businesses started in the UK are started at home - there is no doubt that homeworked businesses are here to stay.

But beyond the facts and figures, the entrepreneurs who build their businesses at home are unanimously positive, almost evangelical, about the benefits to business, lifestyle and quality of life. Barry Garner laughs off any suggestion he would relocate to an office. "My business feels more like my hobby," he says. "And my business partner works from a penthouse suite in a hotel in Argentina! We're living the good life."

Ten successful entrepreneurs share their experiences of homeworking.  Watch the video now.

 

 

Words by Rebecca Burn-Callander

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