We talk to the mother and son team behind That Cable, which was born when son Sam’s entrepreneurial spirit started at the age of 15 when he realized that money could be made from sourcing heavily discounted speakers and amplifiers bought on the high street and reselling them via eBay.
Encouraged by our success there, we started analyzing the retail prices of cables and audio video accessories both online and on the high street and felt sure we could be competitive if we imported our own goods directly from China.
We researched a variety of Chinese suppliers, chose one, and placed an order worth £600. When the delivery arrived, we laid all of the products out on the dining room table, and ThatCable was born (and named!). Looking back, we were fortunate that our initial choice of supplier was a good one: whilst some of the cables and connectors didn’t work, the majority did, which meant we had the confidence to keep going.
Because we used the internet for everything, we quickly grew more confident and started to grow. Our next order from China was for around £5,000 and another quickly followed for around £15,000. At this point, the kitchen and garage became our warehouse, and the small back bedroom became our office.
It was at this stage Sam made the decision to leave university and I started working on the business full time. Deciding it was time to up our game, we moved our business from our home to a commercial space in a local mill.
What is your turnover, employee numbers etc compared to previous years?
ThatCable has been established for 6 years. An unfortunate problem with our website 2 years ago – which has now been resolved -set us back considerably turnover-wise, however, since then we have seen consistent growth.
Originally, it was just the two of us that ran the business; a further employee was taken on to dispatch all of the orders. Since then we have taken on another 2 members of staff making us a total of 5. We are a close knit team and like to think we run a tight ship, and a sixth member of staff will be joining us within the next couple of weeks.
What products or services do you provide?
We provide all types of audio visual and computer cables for connecting most types of AV equipment together. We also sell distribution equipment for multi television or speaker set-ups. We are always developing our range and strive to have all of the products that might be required for an installation. More recently, we have taken on a huge range of tools which has proved to be very successful online, and are now looking for more ways to diversify and expand our range.
What is your USP?
We pride ourselves on delivering excellent customer service and we think one of the crucial elements to providing this online is to make sure there is a local – not premium rate – landline number available to customers, and that the phone is always answered. Our employees are properly trained to be helpful and polite and are also equipped to provide technical help too.
This means everyone can succinctly resolve any problem or advise on a new purchase. For the most part, being personable over the phone means we can usually have something resolved with a customer within a couple of minutes, as opposed to using email which can take much longer. Having said that, we also respond to hundreds of emails daily.
Most of the time, our calls are technical enquiries, and we find that when we help we usually get the sale. We can now take up to 30% of our turnover over the phone, which we feel is something many online companies overlook as they would prefer to hide behind a digital storefront. We actually see this as building up a good relationship with our customers, and they know they can rely on us to help when they are struggling with something.
What have you done to make sure you get the right people with the right skills in place?
This is something we have struggled with in the past, and something that was brought up at the Epson Workforce Pro business mentoring session we won through Business Matters.
Celia Gates and Managing Editor, Richard Alvin both helped us to think outside the box and rather than getting sucked into doing all the jobs ourselves (as often happens within a small company), to delegate tasks to others. Celia suggested writing an instruction manual on how to do a specific job within the company.
Not only will this help us focus, it will also help to train new members of the team. Since the mentoring session, we’ve concentrated our efforts into searching for employees with an interest in the products we sell and in particular, those with a technical background, so that even more tasks can be delegated down, allowing us to concentrate on growing the business.
Celia’s ‘Whether? Forecast’ also helped us an awful lot, we would definitely recommend looking this up online if you’re looking for a fresh approach to your business.
Do you have any tips for managing suppliers and customers effectively?
We like to feel like we have a good relationship with our suppliers. By consistently paying on time, they often come to us first with good deals they may have. A lot of companies online are box shifters, and any returns coming back to them usually go straight back to the supplier. We take time making sure that if anything comes back to us it is properly tested before it gets returned. This allows us to keep on top of products which are not performing as well as they should.
Thanks to this process many of our suppliers now trust us and don’t even require the goods back! We’re always as honest as we can be with our customers, never oversell, try to be specific on when they should expect their order and, if there are issues, we like to get them resolved quickly. So far this has proved to work well and we have excellent reviews online.
Our average sale is around £15 (including VAT and delivery) and we now send out up to 80,000 orders per year all over the world, so keeping orders going out of our warehouse seamlessly and arriving in time is a tough job to keep on top of – but one we feel we do very well.
Any finance and cash-flow tips?
For everything we sell, we require payment up front. We rarely give credit to any customers and during the recession I think this has helped us an awful lot. We never borrow and any growth within the company has to come organically. We’re very careful where we spend our money and always try to have a healthy cash flow and reserves.
This has helped us an awful lot during the downturn as we’re now regularly contacted by receivers/liquidators with stock that they need to sell, which tells you what the market has been like. We know a lot of our competitors miss out on deals because they simply don’t have the cash available to invest in stock they know they could sell.
The company has also invested heavily in our own warehouse, in order to try to keep overheads down. Finally, when it comes to stock, having the right systems in place to manage inventory is essential.
We really believe that, for us, revenue is vanity, profit is sanity, cash is reality.
Any advice for the Government?
We are keen to and do employ young people as apprentices, yet it’s hard not to be disappointed to find that so many of the candidates are unable to do simple maths i.e. working out 10% of 100. Some just don’t seem to have any strong work ethic at all. One young man even responded to a text whilst being interviewed!
It’s always good to hear the Government say that small businesses are the life-blood of the economy and will help get the country out of the recession. If that is so why is the Government demanding so much money in the form of Corporation Tax? This stifles a small business’ ability to grow and employ more people. In our view, it would make more sense to reduce the tax, enable businesses to grow faster and hire more people jobs, which in turn cuts the benefits bill and brings in income tax and NI payments.
We all hear how ‘bad’ people are for claiming benefits illegally but we all know that they are the minority. Not enough is said about the emotional and mental stress that an out of work person goes through daily. Having a job and being able to provide is a basic need and one that needs addressing in order to keep people sane and confident.
What is your attitude towards your competitors?
In some cases we work with our competitors and even buy and sell to some of them. We are always going to have competitors, it’s something we can’t get away from. We just need to make sure we keep up to date on the products we have available and keep offering good customer service.
Any thoughts on the future of your company?
We are confident that we have a stable base and good foundations to expand heavily online in the years ahead.