Step in Carl Derving, founder of Ravenwood Guitars, which is currently crowdfunding a guitar business to launch his new designs. We spoke to him about drawing up a business plan to take on Rock n’ Roll’s market incumbents.
Why did you decide to start the company?Ever since picking up the guitar at the age of 15, I have always wanted to be a professional musician, touring the world with my band and making music albums. I realised that the next best thing would be to start my own guitar company. For years I bought and sold guitars, trying to find the ones that worked for me and building from individual parts.
What is your background and why did it play into this idea?I left high school in 2001 and pursued a career in accountancy. In spring 2013, I essentially came full circle when I realised that what I really wanted to do was the same thing I wanted to do 12 years previously, which was being involved with the guitar. I set up the company and started building guitars in my garage and posting pictures on Facebook. It was at that point that I realised that it could be a viable business and that my experience of both the guitar, and business and accountancy would allow me to make the business a success.
How important is the Made in Britain part of the brand?I think it is really important that the UK has a powerful guitar brand, as the guitar world is dominated by US brands, yet the UK has a huge music industry. How can it be that one country in the whole world has the monopoly on a product that can be made in any country? I don’t believe that the ‘Made in Britain’ part of the brand is as important as the fact that the brand is from Britain. The cost of UK manufacturing is far too expensive, which is the main reason why the UK has lost the manufacturing industry to developing economies based in Asia. Consumers want Western manufactured products at Asian prices and this is just not achievable. What many people don’t know is that the quality of Asian manufacturing has massively improved over the last decade and that if you find the right manufacturer you can get high-quality products for a good price, and even the top guitar brands have most of their products made in Asia, as the cost per unit is significantly cheaper.
How can a small UK company take on incumbents that have ruled the industry for decades?As my grandmother keeps telling me ‘you can’t start at the top’ and the same went for each of the key players in the guitar market [when they started out]. Each one of them had humble beginnings and the same goes for us. It could take up to ten years before the main brands see us as another threat. We plan to shake things up a little bit and offer customisation of guitars in the lower price brackets and also offer limited edition artwork on our premium guitar brand, Ravenwood, as well as introducing new guitar shapes not currently on the market anywhere.
How do you plan to build the brand and the reputation of these models?We intend to focus our company on customer service and quality, putting the consumer at the heart of what we do. I have always believed that a happy customer is a returning customer and this is paramount in building a quality brand.
How much feedback have you got on social media so far? We have around 2,200 fans on Facebook and this has been our main platform to communicate with our audience. As most are guitarists and play in bands, they too will be heavily involved in promoting their music on Facebook, so it is the perfect place to interact with them. The important thing for us to remember though is that a Facebook like does not equal a sale, so it is difficult to tell our true success until we start making our products available for sale, which will hopefully be early 2015.
How long have you been crowdfunding for and how’s it going?We have been live on the Funding Tree platform for just over two weeks now and are seeking to raise £100,000 equity investment. Our products already have a strong fan base and we’re hoping that the power of Funding Tree will help us convert that goodwill into capital. It’s early days, but so far we’ve already hit seven per cent of our target. In order for the pitch to be successful, we have to reach at least 70 per cent of our target within the next 45 days, so we’re hoping that exposure in publications like yours will help raise awareness and drum up more funding! We believe that the investor returns are excellent and as the business qualifies for SEIS and EIS, investors have a powerful tax incentive too.
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