TRICKY BUSINESS 2
PROGRAMME 4: DOHERTY'S JAM
The entrepreneur
Seventeen-year-old Fraser Doherty learnt the art of jam-making from his gran. He has turned a hobby into a business with enormous growth potential and has demonstrated considerable entrepreneurial flair. He is tenacious, works hard, is motivated by his long-term goals and is determined to succeed. His ambition is to see his jams being sold in supermarkets across the UK and around the world.
The business
Doherty's Jam has an annual turnover of £80,000. Fraser works 16 hours a day and produces 1,000 jars of jam a week. His main retail outlets are local and include farmers' markets and delicatessens. Website hits and media publicity generate a few national and international sales. Fraser's business overheads are low as he is a sole trader, works from home, and has no staff.
The business problem
Fraser's jams are growing in popularity and he cannot keep up with demand. He wants to expand, move into high-volume production and supply supermarkets. His plan is to move from home kitchen to supermarket shelves in four months.
The business solution
Initially, John believes that moving from low-volume home production to high-volume commercial production is too big a step for Fraser to take in one go. He feels that Fraser should aim to grow his business more slowly and move into commercial production by renting down-time in a local factory. This would enable him to increase production gradually, in line with increased demand. It would also put him in a stronger position when negotiating with supermarkets and investors. He warns Fraser that concentrating on one type of client, particularly supermarkets, is a high-risk business strategy.
When Fraser receives a speculative phone call from a Waitrose buyer, John reassesses the situation and reviews his advice. He is impressed by Fraser's risk-taking. He decides that as Fraser has no real overheads and no employees, he has nothing to lose by pitching for a supermarket contract. Fraser can live off his savings and if he does not get the contract he will only have wasted a few weeks chasing his dream.
The outcomes
Although Fraser has not closed the deal with Waitrose, he has moved closer to achieving his ambitions. He has a new product line and professionally-designed labels that enhance his brand. He is ready to go into commercial production having arranged covering finance through the Prince's Trust.
