Rebecca Monk, Founder, Bathrooms.com: The 3 Phases of Scaling to a £5m Turnover
Rebekah Monk, Founder at Bathrooms.com, talks to Lexi Mills about how she grew what started as a side project to a £5m turnover business.
Bathrooms.com is a consumer website that sells bathroom products; built on the ethos that good design should also be affordable.
The business began has a side project when Rebekah Monk had her first child, however it grew sharply to such a scale that her husband, Ian Monk, had to leave his full time position to help manage it. Since then, the business has grown to more than 50 employees in the UK and China and has a turnover in excess of £5 million that is expected to more than double over the next 18 months.
Lexi spoke with Rebekah about the tactics she used to scale the business; what she thinks were the key success drivers for her company; and how she dealt with the challenges of raising funding and international expansion.
LM: How did you go about tackling the challenge of scaling your business?
RM: I would love to take all the credit here but I have to be honest I roped Ian into helping me too; with his help I divided the growth of the business over 3 core periods. We called the first three years the Inception years, followed by three years of Evolution and three years of Scaling. The challenges in each of these were quite different.
The Inception years were really about hard work and long hours, not being afraid to learn new things, perseverance and adrenaline! With any new business one must work smartly but you’re unlikely to make it a success without just sheer hard work as well.
We didn’t have a holiday during the Inception years and it wasn’t unusual to get less than 3 hours sleep in a night. This wasn’t as hard has it sounds, even with young children!
The adrenaline and excitement of any new business should be very high in these early years - this was true for us.
The Evolution years were really about starting to hire a small handful of people, developing the businesses culture whilst honing and evolving the business. I think this is one of the areas we would really look to improve upon if we did it over again. As a small business we were really focused on not overcommitting ourselves on things like offices, staff wages and headcount.
We spent a number of years operating out of a small portable cabin in a little hamlet called Eaton Bray, with a rather loud donkey in the field next door! Whilst this is an amusing story, it is one of a number of decisions we made that made it harder to attract the right talent. We had a great retention rate but if we did this over again we would look to invest in things like this because they really do matter.
The Scaling years for us were about recruiting middle management and building the systems and processes that would allow the business to be scaled.
Ian’s background is in business process engineering and IT systems. So early on we took the decision that he would focus a lot of his time on developing workflows and IT systems that would proceduralise a lot of the activities the business did. This investment in time has really paid of in the later years, as we have been able to rapidly scale the number of people working in the business without losing control of it. Being an e-commerce business, we are close to IT but I’m sure almost any business that goes through similar growth would benefit from putting investment in systems and processes as a high priority on their agenda.
I’m sure every business is different and in some these periods may go much faster or take a little longer. We still have a lot to achieve before we reach our ambitions but I feel the key to on-going success is making sure you know what your company stands for, who the customer is and what they want, getting and retaining the best people and continuing to work hard.
LM: What were the key actions you believe made the business a success?
RM: Undoubtedly getting Ian involved, asking for help when you need it is important in all areas of life and was definitely so in this case.
The second biggest things that contributed to our success were not taking no as an answer, persevering and not being afraid to learn new things.
People often said, “I can’t believe you’re doing this, I would have no idea about how to import something from China”. Neither did we!
But actually, we learnt very fast and without too many mistakes. Searching online, reading forums and finding a good service provider or two that you can ask questions should get you up to speed very quickly.
Another key thing is about finding something to target that motivates you. Both Ian and I hate people telling us that we can’t do something. Virtually everyone in the bathroom industry that we spoke to in the UK told us “you can’t import decent quality bathrooms from China” and “you can’t sell bathrooms online.” Rather than taking this as a knock back, we used it as another motivator to help drive us.
LM: You raised an impressive £10m in venture capitalist funding, could you talk through your top tips for doing so?
RM: It’s not as hard to do as you think, providing you have a distinctive business that has the capacity to revolutionise a category and has key competitive advantages that are hard to replicate. If you have this then your focus should be on how you communicate this to a VC.
The VCs we talk to usually tell us that 90% of people contacting them for investment aren’t appropriate for VC investment.
If you don’t meet these criteria then you’re probably better off spending your time looking for high-net-worth investors, investment angles or bank loans to help you grow the business.
Don’t be put off by what you see on programmes like Dragon’s Den, where small businesses have to give away 40%-50% of their business for very modest investments. If you have a business that meets the VC criteria, you should be able to raise a decent sum without giving too much away.
Don’t worry too much about how you value the business, it might not even be profitable yet. The key thing they want to see is that, given sufficient investment, it will be able to grow very rapidly (more than 100% per year) for a sustained period of time (5 years+) and at the end of this period there is likely to be a purchaser and they will likely pay £X+. If the VC buys into this (and having key competitive advantages that are hard to replicate is likely to be a prerequisite) and it gives them a return of over ten times their investment, your business will be attractive to them at the valuation that this represents.
LM: What were the key challenges of international expansion and how did you overcome them?
RM: I think there are two key challenges, but none of them are insurmountable and applying the same learnings we discussed earlier, of not being afraid to learn new things and having perseverance, got us through them.
The first was the cultural differences and here I think you can spend hours and hours reading books and researching but just getting out there and meeting the people will do wonders.
When abroad, Ian would always work hard in the day but then spend the evening out with his suppliers or customers, he would often say, “When in Rome, do as the Romans do.” So when he was invited to go to Western restaurants or do Western type activities he would politely decline and ask to go to places that they would normally go to.
Anything internationally focused will distract you from the business at home. The key thing we did is recognise this would happen and take pre-emptive steps to reduce its impact. For us this meant that we delayed international expansion until we were comfortable that what was happening in the UK was humming, when we did go abroad, we made sure we had very good people running the shop in the UK.
Lexi Mills is an online communications professional writer and artist at heart. She has worked in business consulting and marketing for over six years specialising in SEO and PR. She is passionate about the process entrepreneurs take to help launch their businesses and how they scale them thereafter. She has experience working with designers, start-ups, kickstarter projects, SMEs and big brands in the UK, USA and South Africa. Lexi enjoys working with inspiring people in a variety of sectors from luxury goods to travel, design, finance and technology.
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