H
ong Kong is the easiest
place in the world to start
a business. All you need
is a good idea and some
ambition, and in no time, you’ll be
raking in the big bucks while having
plenty of free time to spend with your
kids. Then, when you get bored, you’ll
simply sell your little company to a
bigger company and collect millions.
Right?
That’s what we’ve all heard. And
part of the story is true: Hong Kong
is
an incredibly easy place to start a
business. There’s very little red tape
and the registration fees are relatively
low. There are even piles of companies
ready to hold your hand and walk you
through the process – with just a few
thousand dollars and a name, you can
be up and running in a few hours.
However, the part of the story that
often gets left out is that, while it’s easy
to
start up
, it’s just as easy to
shut down
.
The best-laid plans
Long-time
Playtimes
readers will
surely remember the online shop
Hocusadabra. When they launched in
2010, they brought toys and other kids’
products to Hong Kong shoppers that
were new and cutting-edge. Everyone
who knew about them loved them
and their success seemed guaranteed.
But look for them today and you’ll be
disappointed: they closed their virtual
doors in 2012, two years after they
opened.
Kirsten Zaki, one of the two
founders, and her business partner
were self-funded, and had been
committed to making the business
work. They did their homework,
researching the market thoroughly;
they wrote a detailed business plan;
they conducted focus groups; and they
selected items that shoppers seemed
to adore. But starting a business took
loads of time – time away from their
families. Kirsten found out she was
pregnant with her second child the
day after they registered the new
business, and her partner also had two
children.
After about two years, when
Kirsten’s partner was having her third
child, they had to re-evaluate. Where
were they going? Could they commit
to doing what would be required to
continue? They were already working
from 7am to 8pm most days, and they
weren’t yet making enough money to
draw any salary for themselves.
“To take it to the next level, we
would have to sacrifice [more time
with] our families,” Kirsten says. “If
you’re bringing in money, you can
justify that.” She thinks it probably
would have taken them three years
to start to turn a decent profit. But,
she says, “Three years in the life of a
child? That’s an eternity.”
“We also knew we needed to raise
more money to take it to the next level.
We would’ve needed to borrow from
friends and work twice as hard. We
had to ask ourselves, Are we ready to
do that? The answer was no.”
But why just shutter it; why
not sell? They tried, but unlike the
mythology, where everyone seems
to sell their start-ups for millions,
acceptable offers did not pour in.
Instant success?
“You expect, I’ve got a website and
these great products and it’ll make
millions! Nope, that’s not really how it
works,” says Chrissy Denton, director
of Bebe2be Ltd, a distributor of baby
and maternity products.
Today, Chrissy distributes ten
brands from the US, UK, Australia
and New Zealand, and has a
partnership with another distributor
in Singapore. “In the beginning,
I was a bit eager and didn’t know
the market well,” she says. Chrissy’s
background was in fitness, nutrition
and management, but after she had
her first child, she was looking for a
way to earn money while still spending
time with her baby.
Her first venture was to launch
her own line of bamboo baby-
wear and nursery items, which
she manufactured in China. She
found a factory and sourced her
own materials, with no prior
manufacturing experience. It was not
an easy path, and one she eventually
left behind. Instead, she looked at
distributing products. This proved
a much more successful model, with
significantly lower overheads.
While an accountant helped
with the start-up process, she did
everything else herself. She created
her own website. She rented a
storeroom near her home; when she
got an order, she’d pack the boxes
herself and do her own deliveries.
It took two years to get to the point
of hiring a logistics company to do
that work for her. And it took nearly
two years before she started paying
herself a salary. Most of the money she
makes still goes back into building the
business.
Do your homework
If you remain undaunted and still
think you’re game for starting your
own business, there are a few things to
consider before taking the plunge.
Kirsten advises, “Ask yourself, Do
I want to dedicate every single cell of
my body to this, because that’s what
it takes [to be financially successful].
February 2014
63
