Is my idea economically viable?

There will be some initial costs to consider when setting up my business. When first creating my online presence, I will set up a simple e-commerce website through a company such as wix.com. I feel that using this method is more reasonably priced than hiring a web developer or trying to create a website from scratch myself, something which I have no prior knowledge of.

I would like to use the ‘dropshipping’ process for my business, which is ‘a business model where you sell products online through a product supplier. The supplier then fulfils and ships the orders. You save time and focus on your store while your dropshipping supplier takes care of your customers’ orders.’ (Printful, n.d.). There are some print-on-demand companies that will be able to print my custom designs onto merchandise and then ship the product out for me, saving both money and time. Also, as the products are made to order, there is less wastage which is kinder to the environment.

As I don’t need to hold any physical stock, I also don’t need to include any initial costs for the products. Another cost-cutting factor is that I already have an iPad, graphics tablet and a laptop which has the correct software to produce the designs on.

I decided that utilising social media to advertise would be the best option. I’ll be able to tailor where I am advertising and who I am advertising to, hopefully reaching the right audience. I would hire a marketing company for initial assistance with this. After this has been set up in year one, it should prove easy enough from year two onwards to utilise social media to promote my business freely whilst reaching the same amount of potential people, possibly even more.   

I would also do some sponsored posts with twenty different influencers from various platforms who have a relevant audience for my business and, ideally, an audience of 200,000+ each. Most influencers generally charge between £100-£250 for one post. Hopefully, this will generate enough interest in my company in year one. I have also decided to invest the same amount of money into this in year two to ensure I am still reaching this same large audience. 

Overall, I’ve worked out that I will need £10,896 to set up my business. I plan on funding these costs through a crowdfunding site such as ‘Kickstarter.’ I discovered a similar kickstarter project whose business idea is to design and create custom 3D anime style figurines. Their goal was to raise $40,000 and they managed to get $40,848 pledged. This is more money than I need to raise however this demonstrates that raising money through a crowdfunding site for an idea similar to mine could be feasible.

https://www.kickstarter.com/projects/heroforge/chibify-customized-anime-collectibles?ref=discovery&term=custom%20character%20design

Also, as this initial set up period for my business won’t take long and when it’s up and running I wont need to put that many physical hours into the company because the vast majority of its process is outsourced, I decided to not factor in how much of my time will be used as it will be so little and will be done around my current retail job.

Next, I need to calculate a realistic profit or loss over the first two years of business. Firstly, I worked out how much to charge for each product. I considered the costs I needed to pay for each product on the outsourcing websites then made sure that I would make a good profit on each product, whilst still selling my products at a reasonable price.

I then attempted to work out my expected takings in years one and two. I first considered how large an audience that my social media adverts and sponsorships would reach (this would be the same amount in both years, possibly more in year two). Out of this amount, I then figured out how many would view my website. This is called a ‘click-through rate’ which ‘for social networks in the second quarter of 2020 reached 1.3%.’ (Statista, 2020). From this result, I worked out the conversion rate, which ‘is the percentage of visitors to your website that complete a desired goal … out of the total number of visitors’ (Wordstream, n.d.) In my instance, my ‘desired goal’ will be a purchase. The average for e-commerce is about 2%. Finally, I worked out the average price of my products and multiplied this by the expected amount of sales.

Overall, it appears that my expected takings for both year one and two would be £19,489.52 per annum. The average full time annual earning in the UK is £30,350 (Statista, 2020), which my final calculation is under. However, this is still enough to cover my personal expenses. Also, I plan on working at my current retail job for as long as possible and focus on this business on the side, due to the majority of my process being outsourced to third party companies, I will only have a small amount of time needed to be physically working and I am confident that this can easily be achieved around my current work hours. This second income will also act as a back up, just in case I end up earning less than the expected takings and, over time, when this business is taking nearer to the average full time earning amount, I will probably leave my retail job.

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References:

Wix (2020) Wix premium plans. Available online: https://www.wix.com/upgrade/website [Accessed 01/11/2020].

Go Daddy (2020) Domain prices. Available online: https://uk.godaddy.com/offers/domains/cctld/com-or-co-uk/viral-offer?countryview=1&currencyType=GBP&isc=coukuk1&gclid=CjwKCAjw8-78BRA0EiwAFUw8LFSzepz_cfYDJsOkDX5SqORLdQwHj4wLzcMXTy1u5_fGo1SysNJxchoCg9wQAvD_BwE&gclsrc=aw.ds [Accessed 01/11/2020].

Printful (n.d.) What is dropshipping? Available online: https://www.printful.com/uk/drop-shipping [Accessed 02/11/2020].

Harrington, J (2019) Survey reveals how much influencers charge for posts. Available online: https://www.prweek.com/article/1579418/survey-reveals-influencers-charge-posts (Accessed 02/11/2020].

Bidvine (2020) How much do social media marketers cost? Available online: https://www.bidvine.com/social-media-marketing/price-guide [Accessed 01/11/2020].

Statista (2020) Social media advertising click-through rate (CTR) worldwide from 2nd quarter 2018 to 2nd quarter 2020. Available online: https://www.statista.com/statistics/872099/social-media-advertising-ctr/#:~:text=Recent%20evaluation%20of%20social%20media,of%202020%20reached%201.3%20percent. [Accessed 01/11/2020].

Wordstream (n.d.) Conversion rate: what is a conversion rate? Available online: https://www.wordstream.com/conversion-rate [Accessed 01/11/2020].

YouGov (2019) Conversion rates rise marginally to 1.7% in the first half of 2019. Available online: https://yougov.co.uk/topics/resources/articles-reports/2019/09/17/e-commerce-conversion-rates-rise-marginally-171-fi

Statista (2020) Median annual earnings for full-time employees in the united kingdom (uk) from 2000 to 2019. Available online: https://www.statista.com/statistics/1002964/average-full-time-annual-earnings-in-the-uk/ [Accessed 01/11/2020].

How much it will cost me for outsourcing each product prices found on these print-on-demand websites:

https://www.printful.com/custom-products

https://www.contrado.co.uk/design-your-own

My business structure

Promoting my business is going to be a fundamental factor in its success. It will be important when initially starting as I will need to get the name of my business out there to as many potential customers as possible. Even once the business has become more established, it will still be important to continue its promotion. This will ensure business to continue in the same manner, whilst also acquiring additional sales opportunities, resulting in more business growth. 

My main method to promote my business would be through the use of social media, as the internet is used by such a wide range of people, ‘The United Kingdom (UK) was home to 45 million active social media users in 2020 … 66 percent of the population’ (Statistica, 2020). This shows the size of the potential audience for the businesses who utilise social media.

In an article on how the importance of social media in business, The New York Times stated that when using social media to enhance your career, there are four main factors it allows you to do:

  • ‘Discover new ideas and trends
  • Connect with existing and new audiences in deeper ways
  • Bring attention and traffic to your work
  • Build, craft and enhance your brand’ (S. Sreenivasan (n.d.)    

These factors are all going to be important in building a successful business, whilst also being a relatively low cost method of promotion, which is certainly beneficial in regards to the costs of setting up my business.   

Initially, to help build up my online presence, I plan on outsourcing this part of the promotion process to a digital media marketing company. They will help to build up my social media channels and do some initial social media sponsored advertising on my behalf. When I have built up a decent-sized online presence, I will then send some products to relevant influencers on different social media platforms in exchange for a promotion. Once all this is set up, I will then be able to take control of the main social media sites.

To continue having a good online presence, I will need to use a variety of methods to promote my business, some of these include:

  • Through regular posting of interesting content – for example posting aesthetically pleasing images of my products, creating ‘un-boxing’ videos of my products
  • Holding competitions where the audience are encouraged to ‘like/share/follow’ – this would increase my following and reach out to a wider audience it would also be a good way to like my various social medias and cross-connect the platforms.
  • Interacting with potential customers on social media to help build a good reputation

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References:

Sreenivasan, S (n.d.) How to use social media in your career. Available online: https://www.nytimes.com/guides/business/social-media-for-career-and-business [Accessed 19/10/2020].

Statista (2020) Total number and the share of population of active social media users in the united kingdom (uk) in january 2020. Available online: https://www.statista.com/statistics/507405/uk-active-social-media-and-mobile-social-media-users/#:~:text=UK%3A%20active%20social%20media%20users%202020&text=The%20United%20Kingdom%20(UK)%20was,the%20population%20of%20the%20UK. [Accessed 19/10/2020].

What makes my idea special

During the market research that I conducted into existing businesses, I came to the conclusion that there aren’t many other companies that are offering my specific business idea on a large scale. There are some small, independent business operating through the online marketplace ‘etsy.com‘. They are selling custom illustrated characters of people/pets and are offering these as prints, mostly aimed as family portraits. I couldn’t locate other businesses that were offering custom characters printed onto products in the way I stated that I would. I feel like this is an advantage for my business idea because it will help me to stand out in the market.   

Through doing more research, I found an online based personalised merchandise company called Personalisedgiftshop that are offering a very wide range of personalised gifting options, such as clothing, homeware and stationary. However, the only way in which they allow you to personalise their gifts is through adding text to the products, not illustrated graphics like what I am proposing.

There are also some larger companies, such as Photobox, Snapfish and Boots Photo, which offer personalised photo gifts. As detailed in the previous example, their business model is based around printing photos onto their merchandise, not graphic designs. The website layout of these companies are designed very similarly, resulting in none of them standing out from each other. Their product range was also very similar, mostly including photobooks, calendars and mugs. This is a negative issue for the individuality of these businesses as they all blend in to each other in spite of any unique features they might have. It is important for a business to stand out, therefore this is something that I’m going to attempt with my business.

My research into these similar existing companies has revealed how high the demand for personalised gifting products is, which makes my idea appear more viable. However, it also shows that my business wouldn’t blend in with others because my idea offers the unique selling point of personalised characters. 

Another aspect to help me to stand out is to ensure the business is environmentally friendly. I am concerned about the long term impact that our lifestyle is having on our planet and I feel that my environmentally conscious views need to be transferred into any business I create.

My first concern is that my business will be selling clothing products. There is currently a great concern regarding the environmental impact of the fashion industry. It ‘produces 10% of all humanity’s carbon emissions, is the second-largest consumer of the world’s water supply, and pollutes the oceans with microplastics’ (McFall-Johnsen, 2019). Although my company isn’t primarily going to be a fashion company, I need to ensure that my products don’t contribute to a negative impact on the environment.

Being an environmentally friendly company does also have the benefit of making my business stand out by appealing to other environmentally conscious individuals. However, I am aware of the ‘greenwashing’ technique which many companies are guilty of. Greenwashing is described as ‘the practice of companies launching adverts, campaigns, products etc. under the pretence that they are environmentally beneficial’ (Ethical consumer, 2020). As there is now a ‘rising demand for environmentally sustainable products … companies apply greenwashing techniques to the promotion of their products in order to appeal to the environmentally-conscious consumer.’ (Ethical consumer, 2020). After doing some more research into greenwashing, I feel that the reason why most of the companies are greenwashing is to benefit from the financial gain as opposed to the environmental impact.

Some techniques that companies will use to appear more ‘green’ include adding natural looking graphics to their products such as grass or flowers. They also may use vague words in advertising their product to make them come across as ‘eco-friendly’ when the truth is quite the opposite.

I need to ensure that no greenwashing goes on in my business and that my products are genuinely environmentally friendly. I have to spend time in researching methods of running a greener company. One of the methods I have found is ‘green marketing’, which is ‘when companies sell products or services based on legitimate environmental positives.’ (Corcione, 2020). Some examples of green marketing criteria include being:

  • ‘Manufactured in a sustainable fashion
  • Free of toxic materials or ozone-depleting substances
  • Able to be recycled and/or is produced from recycled materials
  • Made from renewable materials (such as bamboo)
  • Does not use excessive packaging
  • Designed to be repairable rather than disposable’ (Corcione, 2020).

I will take the above points into consideration in order to ensure my business is as environmentally friendly as possible.

Overall, I am confident that my business idea is unique amongst others like it. Despite the fact that there aren’t any companies offering my specific idea, I do think there is still a gap in the market for my idea. This, including the considerable effort to be an environmentally friendly company, will hopefully make my idea a viable business option.

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References:

McFall-Johnsten, M (2019) The fashion industry emits more carbon than international flights and maritime shipping combined. Here are the biggest ways it impacts the planet. Available online: https://www.businessinsider.com/fast-fashion-environmental-impact-pollution-emissions-waste-water-2019-10?r=US&IR=T (Accessed 21/10/2020].

Ethical Consumer (2020) What is greenwashing? Available online: https://www.ethicalconsumer.org/transport-travel/what-greenwashing [Accessed 21/10/2020].

Corcione, A (2020) What is greenwashing? Available online: https://www.businessnewsdaily.com/10946-greenwashing.html [Accessed 21/10/2020].

My idea, purpose and audience

My business idea is to design personalised graphic characters of people and print them onto various products. Personalised gifts and products are becoming more popular these days owing to consumers wanting more thoughtful and individual products.

Before coming to university, I used to work in a photo lab where I would print peoples photos onto gifts including canvases, calendars and photo books. These personalised gifts were very popular, especially when they were for special occasions such as birthdays and Christmas. I decided to merge it with my love of graphic and character design to create this business idea. The age range of people buying the gifts was very varied, so, based on my experience working in the photo lab, I think that the age span of my audience would also have quite a wide span, from children to older animation and character fans.

First, the client would upload a photo of themselves or someone else onto my website. Secondly, they would choose a style of character they’d like to be illustrated as. Thirdly, they would be able to select what product(s) they would like the character design to be printed on, type in their shipping address and then pay online for their order. Using the photo they supplied as a reference, I’d create their character using graphic design software such as Illustrator or Procreate. The designs would then be printed onto their chosen product and delivered to their shipping address.

I’ll be offering a large range of character options to my client. These may be drawn in my own personal style which I’m continuing to develop or in an existing style from popular culture such as animated shows (for example: Disney, anime, The Simpsons), and video games (such as Minecraft, Animal Crossing, Pokemon). I feel like these pop culture characters would be good options especially when the client is buying a gift for someone who is a big fan of that certain show. I’d also be able to easily capitalise on current trends depending on whichever show/game is popular at the time for various age groups. Keeping really up to date with popular culture is going to be so important as what is in fashion changes so rapidly. 

I’ve researched what products are being offered on other existing gifting websites. I have also used my own experience of working in the photo lab making gifts to help with my selection of what products I will be offering. Some examples of products I would definitely like to offer include, t-shirts, phone cases, framed prints, coffee cups and tote bags for example. I’m going to keep this product range fairly small to begin with and expand the range when the business grows or if there was a demand for other products.

A piece of inspiration for me when creating the business idea was an article showcasing the work of artist Dino Tomic (see the examples below), The artist did a small project where he illustrated celebrities in the style of cartoon characters. He has now gained 950,000 followers on his Instagram page, which indicates that people really like the idea of turning people into different character styles. His artwork is an excellent example of the style and quality of work that I wish to emulate.

Celebrities as characters in different cartoons by Dino Tomic

In researching more into the creative industries, I discovered that they are ‘one of the worlds fastest growing sectors’ (Creative Economy, n.d.). The design sector is very successful, in the UK alone ‘an estimated £33.5 billion [is] spent annually’ and it ‘is linked to profit: For every £1 invested in design, businesses can expect over £4 increase in net operating profit’ (The Creative Industries, n.d.). These facts and statistics have confirmed to me that the design industry is a great sector to be starting an online business in.

Within the design industry, there is a growing demand for personalised gifts. I read an article explaining how the founder of ‘personalisedgiftshop.co.uk‘ ‘Turned £5.50 into a £7Million personalised gifts business’ (Fitzsimons, 2019). Also, a search on ‘etsy.com‘ of the words ‘personalised’ and ‘customised’ both bring up over three million search results. All this research reinforced how popular personalised gifting options are.

Search results on etsy

However, I am also aware that I am going to need to have unique attributes in order to stand out in this market. I did some further market research and discovered that there aren’t many other companies that are specifically offering my idea of printing personalised character designs onto various products. There are some similar existing gifting companies such as ‘personalisedgiftshop.co.uk‘, who print custom text and names onto products, and Photobox, Snapfish and Boots Photo, who all print photos onto their products instead. As my business will be printing different character graphics onto multiple products, I will be able to stand out from these existing companies. I’ll analyse this more in the next blogpost.

– 749 words

References:

Creative Economy (n.d.) The creative economy team supports people around the world to shape and share a creative and prosperous future. Available online: https://creativeconomy.britishcouncil.org/about/ [Accessed 18/10/2020].

The Creative Industries (n.d.) The value of the uk design industry. Available online: https://www.thecreativeindustries.co.uk/industries/design/design-facts-and-figures/the-value-of-the-uk-design-industry]. [Accessed 18/10/2020].

Fitzsimons, J (2019) Women reveals how she turned £5.50 into a £7Million personalised gifts business. Available online: https://www.mirror.co.uk/money/woman-reveals-how-turned-550-14270554 [Accessed 18/10/2020].

Demilked (2020) This artist drew celebrities as characters in different cartoons. Available online: https://www.demilked.com/celebrities-in-different-cartoon-styles-dino-tomic/ [Accessed 18/10/2020].

Etsy (2020) Etsy personalised search results. Available online: https://www.etsy.com/uk/search?q=personalised [Accessed 03/11/2020].

Etsy (2020) Etsy customised search results. Available online: https://www.etsy.com/uk/search?q=customised&_qc=customized [Accessed 03/11/2020].

Creative Industries Research

After doing some online research into the creative industries, I feel like my business idea should fit in really well. The creative industries lecture that I joined particularly inspired me, including the video on ‘getting a job in the creative industries’ (https://www.youtube.com/watch?v=ArnhItrVuFM) I learned how the creative industries are growing at such a big rate, and that there are so many different opportunities within the industry – it’s so varied and spans anything from graphic designers to musicians to crafters to film/tv and these different sectors within the creative industry are able to support and work together on interesting projects. 

Here’s a couple of existing Businesses that inspire me:

BECKY CAS:

 

https://www.instagram.com/beckycas_/

https://www.etsy.com/shop/beckycas

Becky Cas is a digital illustrator I found through Instagram. Her business is a great example of one that I’d like to emulate. She is one of the many digital artists who design and post their digital art through the platform and over time has gained a following. She has turned her hobby into a little business where through her Instagram page, she promotes her Etsy shop where she sells her designs as gifts – for example design prints, enamel pins and stickers. I feel that her business is a great example of how using a combination of social media and existing selling websites, you can create a small business.   

THE ARTISAN:

https://www.theartisancoffeeandart.com/home 

https://www.instagram.com/theartisancoffeeandart/ 

The Artisan is a coffee shop located on Newland Avenue in Hull, and is a business which I use often. They serve lots of tasty breakfast and lunch foods, homemade cakes and hot drinks. I particularly like how they stand out compared to other coffee shops and cafes in the area due to the fact that they also support local artists by decorating the walls of the shop with artwork and handmade gifts, all of which are for sale. I feel like this is a great way for the artists to exhibit their work and reach a wider audience. They also host craft events and workshops that people can attend, which is a great way of reaching out to the local community by providing fun activities, but is also a good way for the business to make extra money.