your own pride can be your worst enemy and sometimes has to be swallowed to get where you want to be
In our latest series of interviews we talk to entrepreneur Tom Bowman, founder of Fear and Rolling Freesports.
The business runs a Skate Park and Shop in Newport, Wales and an online store. Nearly ten years since its launch it has weathered the global financial crisis and the change in consumer shopping habits.
Online retail sales make up 15.2% of all sales in the UK and on average consumers spend £1,174 online a year. This reflects advances in broadband speed, mobile phone technology and tablets.
It is challenging for smaller retailers who are competing against bigger online retailers like Amazon; meaning that they have to carve out a niche and remain competitive whilst ensuring the business remains profitable.
In this interview with Tom we explore the retail side of the business (and in particular the online presence), and the funding of the Skate Park.
Q: “I started the interview by asking Tom about the background to his business.”
In 2006 Tom developed a clothing brand which he distributed via local retailers.
However, when relations broke down with the main retailer of the brand he decided to take control of the way the brand was presented to the consumer. The natural route was to open his own shop in Newport to showcase his brand and sell high end inline skate equipment (which wasn’t being offered in Newport).
From a business logic viewpoint it made sense. The shop was on route to a Skate Park in Newport and therefore the theory was that it would pick up passing trade. Tom explained that he believed, as many entrepreneurs believe, “if you build it they will come”.
This wasn’t completely the case, times where hard and the business struggled. So he moved into the centre of Newport to capture more passing trade. This risky move meant increased overheads but proved even more fruitless. As time progressed Tom took Fear and Rolling (the Skate Shop) online to reduce overheads, and looked to other ventures including a retro clothing shop and a horticultural business to generate income.
With some success in horticulture retail under his belt Tom was reluctant to let the skate brand fail. As Tom explained he had a natural affinity with the brand after so many years work and vision had gone into it and he wasn’t prepared to let it go.
Expanding Fear and Rolling into the Skate Park realm seemed to be the next progression. It would help expand on his vision to better the standard of living in Newport, creating a space for the local skate community to grow and creating much more potential retail trade for the skate shop. So in 2012 Tom took the leap and invested in building an indoor Skate Park. Not wanting to waste time seeking outside funding he used his own money to fund the project.
Today Tom’s business is at an important crossroads with more Skate Parks opening up in neighbouring towns and competing for customers.
To respond to this challenge Tom is diversifying the services offered, moving to a new site and converting the park to a charitable status.
Q: “I talked to Tom about the challenges of starting a business and how this must been even more difficult as it was around the 2008 financial crisis. In particular I was interested in how Tom approached the funding of the business and what the impact of the financial crisis was.”
Tom has always funded the business himself, and although there is debt his aim is to keep this under control. Tom explained there is good debt and bad debt and that he only subscribes to the good kind.
He believes passionately in what he is doing and he is happy to reinvest money to make it work. As Tom said if Elon Musk has to do it then it must be ok; but your own pride can be your worst enemy and sometimes has to be swallowed to get where you want to be.
Tom knows he has been closed to external funding throughout the venture due to pride and unwillingness to jump though the necessary hoops. But as he moves to the next stage of the journey he sees the importance of working with others on networking and investment levels.
We touched briefly on the financial crisis and Tom felt that 2008 would have been difficult but as a new business they were already struggling, hardship was already there so the financial crisis went virtually unnoticed.
Q: “In this part of the interview we turned to the Skate Shop and I asked Tom whether on-line or off-line was more profitable and whether this has changed over time?”
We talked about the fact that people are turning to the online route for convenience and whether this had any impact for what Tom does.
Tom explained that the products he sells favours the physical shop in terms of being able to try skates on. Not only is he selling his own brand of clothes but also specialist high end skates. There is also huge online potential if you are willing to put time and effort in to getting a website up the search rankings.
People want to come and see the products before they buy them. With online although you can provide the products you can’t have the same relationship that you can through a physical shop. Tom knows his customers and they know him and this is really important.
The online store is a necessity but it is the physical shop which is equally as important. Tom Explains; “online is all about price, your essentially competing to present the customer with the lowest price possible online, where as in store its far more about the customer being able to relate to you on an almost personal level, the price suddenly becomes almost irrelevant in lots of cases. With a skater owned store the customer is investing in you and what you stand for as much as they are a new pair of skates.”
Q: “With shopping habits changing, I asked Tom what the challenges were for a retailer in terms of running an on-line store and whether this has changed over time.”
We touched on this briefly, the real challenge with online is the relationship. Offline you can build that relationship which is important in growing the business. Online thanks to social media its becoming easier to build up that relationship with your customers but it is always going to take a lot more time and effort to build a complete relationship with a customer than it would in store or even over the phone.
Q: “With big online retailers like Amazon, I asked Tom whether it is harder for him to carve out a niche and whether this puts pressure on him to lower prices, and therefore cut margins.”
Tom explains the aggressive inline skate market is a niche market and the likes of Amazon are not the competitors for his business at the moment. However, there are big players in the market that apply pressure but it can be a waste of time and energy to try and compete with them. It’s often better to serve you own customer in your own way rather than try and mimic the big players.
The main area of competitiveness is from similar physical shops and online retailers. For those who are comfortable with buying online there is very little that Tom can do to change that habit. But Tom went onto explain that where the skate market is different in that no-one wants to devalue the price of the product and if they did it would have an impact on such a small market. It therefore means that there is very little price difference between shops. Any serious price cutting is frowned upon almost to the point of price fixing from the manufacturer’s point of view to make sure the playing field isn’t price dictated and products do not get devalued.
He added that online stores in Europe willing to ship to the UK are a major challenge and a difficult one to contend with.
But to come at the market from a purely price driven view point is wrong. With online you have a level playing field; those who get to the top of the google ratings are not there due to the lowest prices but due to hours of good SEO work being put in to achieve it. In this environment Tom feels that where people like him have an advantage is in the service they offer being right and being found due to well managed SEO. He believes this is a bigger factor than price alone.
Q: “Turning to the Skate Park, Tom has run fund raising events to help with the refurbishment and I asked him to explain the reasons for this and whether he had considered the likes of Kickstarter as a means of funding.”
Tom explained; “I have considered crowd funding on a few occasions but I always felt at the time at least that because the nature of the skate park being in a fixed location inaccessible to most that we’d struggle to get enough backers who could benefit from it. I just imagined us putting weeks into producing our pitch only to fail and come out with nothing at the end of it being the all or nothing nature of the likes of Kickstarter. Although I think my Skate Park model is pretty individual the concept of an indoor Skate Park itself isn’t a new one so probably not enough quirk appeal I felt.”
An alternative option was to get grants but unless the park had charitable status this would be difficult to achieve so the route for funding was his own pocket and turning to the community.
Tom added that they are now moving towards charitable status and this will make a big difference towards what they can do in the future. The charity will run the Skate Park and the shop (Fear and Rolling) will be a separate entity.
Q: “Tom runs one Skate Park and I wanted to know whether Tom had considered opening up another park, and what the challenges would be.”
We spoke for some time about Tom’s deep connection with Newport.
There are two reasons why Tom does what he does; firstly he didn’t feel he belonged in a conventional workplace and secondly he wanted to better Newport. He feels passionately about where he lives. It is sandwiched between Bristol and Cardiff and misses out on the opportunities afforded to both these cities.
Rather than looking to emulate other parks Tom prefers to do things differently. The competition has changed from when he set this up. Now there are two new parks in Cardiff and for him it is about having the right equipment and ethos which attracts people to his park but also he wants to make the space more accessible to other activities including a free running and an artistic space in the future.
Tom knows there is not much money with running a Skate Park due to the running costs but for him this is much more than the money, this is about creating something special and a legacy that will be part of Newport.
Q: “With more on-line access, social media appears to have an influence on people, and how businesses interact with customers. I was interested in knowing how social media plays a part in promoting Tom’s business to a wider audience.”
Tom explained that marketing is the single greatest challenge for small businesses.
Often there is the belief that if you have the facilities, the stock, a great idea, and the product then people will come. Small businesses are happy to spend money on everything but marketing and Tom sees this as a downfall he himself suffered from for too long.
As the business develops Tom knows he needs to focus on the marketing side above all. Age demographics are an important part of the business, it tends to be a younger generation so he needs to constantly engage with this group.
He uses Facebook which he has actively been working on to increase ‘Likes’, Instagram and Twitter. As an example, Tom explained Facebook is great because he can use videos to engage people with what they are doing in a visual way which seem to be ten times more reactive than simple text updates. “Facebook for us is our number one online marketing tool, for our target demographic nothing rivals it.”
Tom understands the importance of social media and believes this will be an important driver of ‘success’ in the future.
Q: “In my last question I asked Tom where he would like his business to be in five years’ time?”
Tom feels that success tends to focus on what we have (and therefore the financial side). Appearance is all important, and to a greater extent this makes us terrified of failure.
He went on to explain that when you go into business you need to have the right mind-set. You need to believe that what you are doing will work and you need to be prepared to make it work. You also need to be prepared to invest without worrying about the outcome. But Tom also said you shouldn’t be afraid of getting help.
Setting up and running the business has been a struggle as Tom has been the main driver, and he has been determined to keep it going. In the past he has been closed to external funding and convinced that the only way is his way but going forward he needs to work with others.
Part of that is the move to put the Skate Park into a charitable status which will open up funding opportunities. This is really important because he wants the park to be sustainable for the future, part of the legacy he wants to give to Newport.
But it is much more than being sustainable; at the moment 95% of skaters are male, in places like Brazil it is much more equal and therefore he wants a more even split and to encourage female participation. So a lot of effort will be placed in teaching and tutoring and the charity will help them to do this.
Also being a charity they can reduce prices to encourage those with less money to come in, so getting the community much more involved and part of the journey. Tom also explained that the area is multi-cultural and he is really keen to encourage minority groups to get involved.
And importantly he wants to get out and talk to schools. For him clearly this is a community project for an area he is deeply passionate about. The journey has led him to this point and he believes if he gets it right the next five years could be very important for the park and its sustainability.
We touched on the shop and this remains an important part of the vision. His belief is that as the park comes under the charity it should free up cash in the shop and make this more sustainable.
As we ended the interview Tom explained that this is not about the money, this is about doing something he loves, it is about making Newport a better place and it is a about building a sustainable career for him. If in five years there is greater involvement, diversity and sustainability then that will be judged as success.
Running a business is incredibly hard especially in the early years. Speaking to Tom provides a real insight to this, and even after nearly ten years those challenges remain. However, Tom is determined to deliver a lasting legacy and we look forward to seeing how the business develops over the coming years.