DIARY OF A START-UP The Children’s Furniture Company, a year on

We first spoke to Paul Hanson, who launched his own online business together with his wife Clare, just over a year ago. Now we’ve caught up with him to find out how the first year has gone and how the second year is starting.

When Paul and Clare Hanson first bought the Children’s Furniture Company more than a year ago, they faced an uphill task. The previous owners of the web domain name had decided to sell it on after suffering problems following the Google Penguin update. The update, which took into account so-called ‘black hat’ SEO techniques such as paid-for links, automatically downgraded the site.

A year on, the Hansons have done much work to repair that damage. “We’ve gone from receiving no traffic through organic search to now being listed on 1,200 terms,” said Paul. “We’ve targeted some of the long-tail terms and are on page two and three of some of the generic terms too. We have a broader, stronger platform for continuing that growth through and hopefully building our authority and credibility. We’re quite optimistic about that.”

The company has also expanded – its two founders have been joined by four other workers, and they have moved from their home into offices in the Bletchley Park science and innovation centre, based in the former home of the World War Two codebreakers. In October the company saw sales grow by 600%, compared to the same time last year, and in November the company expects to be up by 350%, and predicts it will double its turnover in the year ahead.

The Children’s Furniture Company is now looking to new markets, with plans to launch a website in the United States.

“We’re investigating how we take our internet-based business model to the US for 2015,” said Paul. “Because we’re a .com domain we’ve had a massive amount of interest from the States. Because we produce our goods abroad [in Europe and in the Far East] and import them in, effectively we can import them into the States just as easily. We’ve already fulfilled a couple of orders over there and are now looking at how we apply our business model to that market with a view to launching early in 2015.”

Closer to home, the company is also starting to use a group-ordering concept that seems it take orders for 20 products and then produce 50 “once there’s an order book to fill.” That enables the business to expand without requiring large amounts of working capital.

“That seems to be a concept that customers buy into,” said Paul. “That helps us grow and manage the working capital in the business.” The company can thus test ideas, waiting for sales before putting a product into full-scale production. Clear communication around lead times on the site mean customers understand when they will receive items.

Paul said: “We’ve had a couple of designs that have flown, with one that we’ve never had in stock because before it’s landed in the UK it’s been sold out. Equally we’ve had a few products that we’ve tested and haven’t sold and we haven’t put it into production. It’s been a good way of using the internet as a live testing environment. It’s interesting how our business model has adapted as the year has gone on.”

The company is also selling through Tesco Marketplace, and is the only children’s bedroom furniture company selling through the site. “So far it’s working really well, giving us access to a large number of customers who wouldn’t necessarily find us otherwise,” said Hanson. “We’re really pleased to be involved. It’s not only a good acquisition channel but it’s given the business a good stamp of authority.”

About 50% of the company’s traffic comes from tablet or mobile, and the company is now looking at making the website more mobile-friendly. “We’re finding mobile is a very heavy research tool that people want to be more visual and then people move to desktop or a laptop to go through the transaction,” said Paul. “We’re looking at how we can maximize that.”

A year from launch, Hanson says the first year has gone well. Many of the models it used in its original market research are now its best sellers, while the model of live testing through group ordering is also working well.

“Hopefully we have a very exciting future,” he said. “If we can take the model international, I think that will give us a very strong platform for growth.”