Through the dot.com wringer

My site racing-models.com is about 20 months old, so by dot.com standards it's quite ancient.

The culture of the web two years ago meant that for the first time, it wasn't a crime to be naïve in business.

No one was the finished article. The established businesses had no IT experience. Others didn't have mail order experience. I had no retail experience.

Everyone's graph of selling things online was a straight line going up - no one ever anticipated what was going to happen this year.

'Things went awry...'

I set up racing-models.com because I was frustrated with the quality of other sites selling collectable model cars.

I know it sounds childish, but there's a fairly big market for these things - the models are made in limited quantities and they sell for a lot of money.

It was always my intention to start small, grow with the market, and eventually look for serious development capital to buy out my rivals.

By the stage I got in, there were companies selling off-the-shelf blank 'shops', into which you put your own stock, your own branding. This meant I didn't have to worry about huge start-up costs or the way the site would work.

The biggest investment I made was my time. I put in 500 hours over six months to launch the site, which was money I couldn't earn through contracting.

British reticence

My background is in accountancy and IT, so I thought I was well placed to see the risks. I'd deliberately kept it small and simple, yet still things started to go awry.

I wrote down 12 things I expected the business to be; the opposite happened in each case.

I expected my customers to be people who'd already bought stuff over the web. Yet that first Christmas, about 80% were first-timers. I had to advise them how to order from the web.

Although American buyers were quite happy to buy online, the British proved to be much more reticent. Yet my whole business model had been built around the UK.

Clicks and mortar

The biggest problem internet retailing has is credibility. If you don't have a physical shop or an existing mail order business, then a recognisable name and a reliable site are all you've got.

Yet my site was never run properly. The company hosting it started getting into financial difficulties last autumn, and I was exposed totally.

There'd be outages over the weekends, which wouldn't get fixed until Monday morning. There'd be bugs in the order form, which I couldn't do anything about myself.

The company went into liquidation on Valentine's Day, yet I didn't hear about it until two weeks later when I got an e-mail from the administrator. That was two weeks of crashes and technical problems.

Sales disappeared

During that time, I discovered how fickle my customer base was - the sales just disappeared. Casual buyers weren't ordering because the site wasn't there, and existing customers took fright because of the technical problems.

All I've got now is a site that says, 'watch this space, we hope to be with you again soon'.

I've had to lay off my three casual staff, and go back to contracting to get the money to try again.

I'm looking for new partners, but am insisting on evidence of at least 12 months' liquidity before I'll talk to anyone. Very few companies are willing to - or capable of - providing sufficient assurances.

I don't think there's any future for an exclusive web business in the market I'm in. The way forward is mail order, with a catalogue to give people something tangible and a website for the latest offers and fast delivery orders.

Yet it was never a mistake. I made all the right moves to minimise the risks, yet still I fell prey to external forces.