SmallBusiness.co.uk asks an inspirational entrepreneur to share their experiences and offer advice for SMEs. With the benefit of hindsight, what do they wish they’d known when they started?
Can you explain the idea behind Streetcar?
We have over 250 cars parked around the UK, which members can book online for as short a period of time as an hour. They then go and find one, use it and return it to its original position when they are finished.
This means there are environmental benefits of reduced car ownership – being twice as effective as the congestion charge at cutting car usage – as well being convenient for people who can’t afford to own a car. The scheme really took off and now we have around 10,000 members, a number anticipated to rise to over 30,000 in 2008 and 150,000 by 2012.
How did you come up with the idea?
We went through quite a structured process to choose the sort of business we wanted to be involved in, researching hundreds of business ideas over a period of 18 months. Really, we were looking for a model that would fit with our skill set; something that was scaleable and ultimately saleable.
We stumbled across a similar business while working overseas, liked it, and set about going through about six months of focus groups to see what the reaction to it was in the UK.
How did you know it would work?
Ideally we would have got professional market research done, but at the time that simply wasn’t an option because of financial reasons. In the end we enlisted some friends, family and friends of friends, bought lots of cheap red wine and some pizza and worked through the idea. We got an extremely positive response from people and launched in London in April 2004 with just 8 cars.
How was it funded?
Brett and I initially funded the start-up costs, but we needed some cars pretty quickly to get us going so we arranged some lease agreements and secured banking and asset finance.
Being a brand new company in a new sector meant that this was a task in itself. My advice to anyone trying to do the same would be that a sense of quality and professionalism when putting together a proposal for your business is absolutely essential. You might want to have a business plan professionally bound for example, but whatever you do, you need to appear to be in control.
Once the business took off, it wasn’t so hard to find funding. In fact, pretty early on, we met an investor who was also a member of Streetcar, which allowed us to make quite a significant step forward.
With hindsight, is there anything you would have done differently?
Well, my partner jokes that he would have chosen to work with someone else initially, but even that touches on an interesting point. If you are going to go into partnership with someone else, you need to be very careful.
Fortunately, we were very lucky and are able to play to each other’s strengths very effectively, but lots of people struggle. You really have to make sure that you can work comfortably and work well with the other person before you commit.’
UPDATE: Streetcar merged with American company Zipcar in 2010