Spending a lot of time in the online retail space, and also in China we constantly see great online retail opportunities in Australia, much of the time in product categories unrelated to Shoes of Prey. Some of these we get really excited about to the point where we'll take a few weeks to work out the supply chain in China, then spend time researching the market in Australia, and being entrepreneurs it hurts to have not gone ahead with any of these new business opportunities. The question we keep coming back to is:
"Do we focus 100% on Shoes of Prey, or do take up one or more of these other opportunities?"
Arguments for focusing on Shoes of Prey:
- To build a new business from scratch to the size of Shoes of Prey would take a lot of investment in both time and money. To double the size of Shoes of Prey, while not a simple task is probably much easier.
- There's a saying that "retail is detail". Working on a second online retail business might mean we miss the details on both so we fail or only achieve moderate success on two businesses instead of strong success on one.
- Our competitive advantage probably lies in our brand and the relationship we have with our customers. We wouldn't be utilising that advantage in starting a new business outside the Shoes of Prey brand and customer base, so why not focus on maximising the value from our existing competitive advantage?
- When we've spoken to any potential external investors or anyone with experience in starting and running a business they say focus is definitely better than starting a second business.
- We already work an incredible number of hours each week on Shoes of Prey, to start a second business we'd have to either hire more people or forgo some of the projects we're working on for Shoes of Prey.
Arguments for starting a second online retail business:
- Diversification - Mike, Jodie and I have self-funded Shoes of Prey. The majority of our savings and years of our work are tied up in one investment. If something happens to Shoes of Prey then we're not diversified at all.
- We're entrepreneurs at heart, we love working on Shoes of Prey and it almost entirely consumes us but we also love starting new businesses. While I had thought it would be impossible for me to enjoy something more than working on Shoes of Prey the thought of starting something entirely new has an additional spark to it.
- While we're passionate about the Shoes of Prey business and our parts in it, Mike and I aren't passionate about the Shoes of Prey end product - women's shoes. That's not a major issue for us, I love the customer service, marketing and operations side of our business which I focus my time on and Mike loves the technology and operations parts of the business that he works on. Jodie and Susie all love shoes and they take care of the parts of the business where that passion is critical. For Mike and I there would be an additional spark of excitement if we could work on a product we loved.
- In comparison to starting Shoes of Prey it would be so much easier for us to start a new online retail business. We now understand sourcing and shipping from China and we have an office and a team based in China. We have relationships with PayPal and NAB for online credit card processing. We've learnt an enormous amount about online marketing. Developing a brand, pricing and a product range are all things we understand a lot more than we did 2 years ago. Doing the programming for another online store would be a breeze for Mike, Mel, Charles and Bel. We have a great customer service team who could assist with a new business. There would be significant economics of scale in running another online retail operation together with Shoes of Prey.
We're regularly torn on this issue and debate it frequently internally. We'd love to hear your thoughts, should we focus on Shoes of Prey or start a second online retail business as well? Have you had experience starting two separate or only semi related businesses at the same time and how did that work out for you?