Aamir Ahmad’s furniture company, Dwell, has become one of the fastest-growing retailers in the UK and is set for sales of £35 million this year.Here he tells SmallBusiness.co.uk what he has learned from his mistakes in business.
I started my first business in 1995 at the age of 27 after a spell as a management consultant. My idea was a catalogue company selling upmarket furniture. I was confident in my plan and wondered how hard it could be.
Very quickly, I realised how difficult the life of an entrepreneur is. Starting your own business and dealing with the minutiae of running a company is totally different from having loads of people who handle everything for you. When you start a business you do it all yourself.
The first day, I remember thinking we’d print catalogues and hand-deliver them to save money on postage. I got all my mates together with the aim of distributing about 10,000 catalogues, not realising that it would end up taking weeks. The result was one single, solitary customer order. It wasn’t a good way to get the businesses going. All of my friends still think they helped me set up my first business – I never really told them the process was a complete waste of time.
After that, we started to get the product and marketing right and began to understand what customers were looking for. We were creating an upmarket furniture brand and there weren’t that many around, so we tapped into that market and figured out what the best offering was. I learned that you can have a good idea but it’s the execution that makes a great business. Most of the best companies aren’t based on fantastic ideas but they do execute those ideas really well.
Profit is sanity
While we got the offering right, the company was built for sales rather than profit. We’d constructed a machine that was great at growing and offering good products but wasn’t so good at turning that into margin. It eventually got to a stage where we needed to either put more money into the business or sell it off, so I sold it, making hardly anything out of the proceeds, took a year out to regroup and then decided to start again.
In my new company, we as a team are ruthless about making sure we focus on what adds value and cutting out what doesn’t. We run a tight ship in terms of people, and I make sure every member of my team is strong. Whereas at other firms there can be people at the top and then a whole layer of people in the middle who just seem to be admin guys, I can point to each person in my company and know what they do and how indispensable each one is to us.
At the start of the recession we had it tough. Like many companies, we cut back on our marketing when we should have been ramping it up.
When we realised our mistake, we doubled our marketing spend and investment in new product development and stores, and that saved us. At that point we had a turnover of around £25 million. We’ve grown around 40 per cent since then, and this year we will be looking at sales of £35 million.
I get a lot of people coming to me saying they’d love to start a business and be their own boss. Usually they think working for themselves is easy. But when you run your own company you work 24/7. Lots of people think it’s nine to five, but in reality you’re working all the time. It’s not right for everyone, but it came good for me.