[ubuntu-uk] Lack of support for small business

[Bruno Girin]

On 19/11/11 11:06, Gareth France wrote:
> I have an appointment with Lloyds next week. Bare in mind I'm not 
> trying to sell the bank software, but they are getting cold feet about 
> the idea of me selling a PC with software on.

I understand that. I was only saying that in my experience banks have a 
very conservative attitude to software so from their point of view, you 
are setting up a business that consists in selling PCs with software on 
that they themselves would not buy so from their point of view, they may 
struggle to understand how you will make the business work because they 
struggle to understand who would buy what you have to sell. So it may be 
worth taking the time to write down a number of customer profiles to 
show them that you've actually done research on your target market and 
that there is demand for your product, even if the target market is not 
people like the bank manager you're talking to.

Other things you may want to point out is that you are primarily selling 
PC hardware but your choice of OS and software you bundle it with means 
that you are not targeting the cut-throat mass-market that is already 
over-supplied and dominated by the Currys and Dixons but you are 
targeting a smaller (some would say niche) market that is currently 
under-supplied. And that's the point: your target market may be small 
but there is virtually no competition. And you know for a fact that 
there is a market out there: every single person on this mailing list is 
a potential customer to start with! Also, as a small business with no 
physical presence on the high street, you don't need to shift that many 
boxes to have a profitable business.

You may also want to take the example of other niche suppliers like 
Tranquil PC [1] who are doing very well supplying PC hardware to a small 
market (their USP is low power hardware rather than the software it runs 
but the principle is the same).

Banks are very good at using a risk based approach whenever they invest 
in anything (and even if you're not asking for a loan, opening an 
account for you is seen as an investment). So they will want to evaluate 
what is the likelihood that your business will be profitable or will go 
bust. Therefore, you have to demonstrate to them that:

  * You have a product to sell,
  * You have a target market to sell it to,
  * Your target market is big enough (or under-served enough) that there
    is room for your business,
  * You can make enough of a profit on each sale to cover your outgoings
    with some margin.

The last point can be quite challenging: you don't want your prices to 
be too high otherwise customers won't buy but it needs to be high enough 
that you don't operate at a loss (i.e. if you need to work 18 hours a 
day, 7 days a week to break even, you have a problem with your core 
business proposition). But I assume you're already looked at that if 
you've decided that it was worth your while to start your own business.

[1] http://tranquilpc.co.uk/

Cheers,

Bruno
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