Often a budding entrepreneur's bestideas are sparked by their "day job". For Jason Rickaby, now 39, a stint working in an independent health food store in Leeds kindled his interest in developing nutritional supplements for bodybuilders.
However, Rickaby didn't strike out on his own straight away he also realised that he didn't yet have enough business experience to make a go of it. So he took a job with an existing supplement firm, Peak Body.
This gave him much-needed knowledge of all aspects of the business, from product development and research to marketing and sales. It also put him in contact with Mark Bowering, a biochemist who ran a web company, Monster Supplements.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The pair agreed that there was a gap in the market for a high-quality UK-based brand. The duo decided to go into business together, founding PhD Nutrition in 2005. Rather than rush a product to market, they spent the first six months refining the taste and flavour of their supplements, before launching in 2006.
They realised that as "natural" (as opposed to steroid-based) bodybuilding supplements moved from being niche products for hobbyists to becoming more mainstream, these "cosmetic" factors would be increasingly important.
Bowering arranged for his existing businesses to extend a cash loan to the new company to pay for the extended research and development period, as well as the other start-up costs. While Bowering provided the funds, as well as advice and support, Rickaby was in charge of the day-to-day aspects of setting up the new brand from scratch, including selling the product to trade suppliers and via the company's website.
Having to do everything himself meant that the first year was "really hard". However, he was so certain that the company had a "really strong idea" that he had "absolutely no doubts" that it would succeed. His optimism was soon rewarded PhD's flagship product, Synergy, was a big hit, enabling the company rapidly to repay the founder's loan. As of last March, PhD made £1.27m profit on £15.4m turnover.
Rickaby now wants to build on this success. Last year, he and Bowering agreed that "the time was right" to take on further funding. They agreed a deal with private-equity firm B&B Investment Partners. Rickaby hopes that this deal estimated to be worth around £20m will allow the company to expand to meet the demands of a sector that is fast moving into the mainstream.
In particular, he wants to expand new product ranges, including one focused on bodybuilding supplements for women. He also plans to tap into international markets, especially Europe (which currently accounts for 15% of sales).
Rickaby is a very successful "natural" (steroid-free) bodybuilder himself, and he attributes his success to the fact that he is "really passionate about the industry". Entrepreneurs need to "live and breathe their businesses 24 hours a day, seven days a week".
It also helps to have "really strong self-belief" and a willingness to "trust your gut instinct". However, don't let overconfidence blind you to constructive criticism. Indeed, as his partnership with Bowering demonstrates, one of the most important skills is to be able to "take advice from good people".
-
What is bitcoin halving and what does it mean for crypto investors?Bitcoin halving is likely to take place this week, according to experts. Historically, this practice has caused the cryptocurrency to soar in value. But will this time be different?
-
British Airways revamps Avios scheme bringing down flight prices to £1With the new Avios part-payments scheme you can now bag a British Airways flight for as little as £1
