In our third series Maree Morrissey talks to Ross and Alan Curran, brothers and founders of Reveal.ie about their difficulties with the business.

VITAL STATISTICS

Alan Curran, one of the entrepreneurs behind Reveal.ie

Business Name: Reveal.ie Company Name: Curran Media Enterprises Year of Set Up: CME was set up in 2004. Reveal.ie was launched in June 2005 and started trading on eBay 1st July 2005. Founders: Ross and Alan Curran (50/50 shareholders) Location: Office is based out of Ross's house. Items are kept in storage facility in Finglas Business Park, a five minute drive away. Business Type: eBay Trading Assistant, eAuction Specialists, intermediaries.

Managed by brothers, Ross and Alan Curran, Reveal.ie is a unique service that takes people's items and products and sells them on eBay for a commission and has been trading on eBay since July 2005. The business is currently based in Finglas, Dublin, and has one full time and one part time employee.

The impetus to become Ireland's first eBay trading assistant came from an issue of The New York Times and its profile of the new business phenomenon of eBay Drop-Off stores. Similar stores had just opened in Germany and the UK. Alan Curran had been working as a fund accountant and, as both brothers have IT backgrounds, technology wasn't a barrier.

PATH TO GROWTH

Assessing whether to go straight in looking for lots of capital and set up a high profile business or whether to start smaller and build the business from there, Alan explains, "due to our inexperience we felt that it would be hard to secure funding so we took the latter route."

As Ross decided not to leave his existing job straight away, their outgoings have been kept to a minimum with Alan the only one receiving a wage from the business. They say that the business is currently at a crossroads. "For the business to be a success we need to bring in economies of scale. The scale that we currently work at is not sufficient to generate enough profit to cover all outgoings."

While, in recent times, their income/expenditure ratio has definitely improved to a level where they hope by the end of the year to be running at a break even point, they sense that this may not be good enough to continue indefinitely. Dealing with finance, administration, packaging and shipping and their main work on eBay itself leaves little time to seek out new business opportunities. "We are perhaps too reliant on a core number of clients."

The interest shown through simple advertisements in local newspapers has been a pleasant surprise. Outlines Alan, "Reveal.ie has two personas: real world and ebay community. We are happy that our feedback eBay sales score is 200 with 100% positive."

Arguing that Reveal.ie's main selling point is the fact that they do everything, Alan explains, "we pick up goods, pay for the storage, list them on eBay, communicate with the buyers and package and ship the goods ourselves." This full service is included in their commission but Alan now realises that there is a real need to review these time-consuming services.

RAISING FINANCE

Both directors had €2000 as initial capital and were able to get a small business loan for a further €16,000 from Ulster Bank. With a small business loan, they purchased and branded all the equipment.

RIGHT HERE

The immediate goal is to get through Christmas with a good cash-flow situation. "We would like to be in a situation where the company is running at break even point." They plan to re-evaluate their business plan and show it as a viable and feasible operation.

Says Alan, "we have been treating this operation to date as a trial, and as a concept and, having proven the feasibility, we will then move onto the next stage of seeking investment." While they have contacts where they can present their business plan, they have not initiated any negotiations.

Outlining how they have no direct competitors, Alan views corporate sales as a primary route to success. "The consistency of turnover is comforting and it is an area that we can control far easier than a truckload of antiques." However, their existing scale of operations limits their ability to pursue the corporate sector. They plan to systematically target companies that would benefit from their service.

ANTICIPATIONS

Alan's vision is to have a branded drop shop, where people could drop off items with relative ease. At the back of the shop, they would like to have their computers running alongside the storage facility, making listing and answering eBay queries much easier as the current arrangement is not the most efficient. Process wise, Alan feels they have to re-evaluate the core offering of no sale, no fee. "We now know that this just doesn't work. eBay charges a listing fee, the customer needs to cover it." As this was never an option while Ross and Alan were calling out to people's houses, with a fixed location, they think this might change.

They also feel that they need to look at creating sales channels.' Says Alan, "walk-in custom is one area as is the corporate sector. Another possibility is the use of independent brokers." Envisaging outside consultants to conduct house calls while Ross and Alan list and manage auctions unveils a scenario that could even lead to franchising options down the road. What is the Crux of the Matter for Reveal.ie right now? Is their best option to scale up and go for it, or should they continue trying to grow the business on a piecemeal basis?

ROSS AND ALAN'S QUESTIONS FOR THE PANEL

1. Should we split the business into different channels?
   
   
2. If we were to open a drop-shop, what type of location do you think is the best, i.e. industrial verses retail?
   
   
3. Will people pay upfront for the service?

Read below comments from our panel of experts about ways in which Ross and Alan could steer their business in future directions to overcome their current dilemmas.

Financial Resources From the information available it would appear that Ross and Alan do not have the financial resources to side up the business. Trading Performance Ross and Alan do not appear to know exactly how the business has performed to date. It is essential they establish their trading performance to date. There would not appear to be any specific advantage in splitting the business of this stage. Running Costs If Ross and Alan had sufficient resources to do so, an Industrial Park would be the preferred location. We do not think they should be providing a free service. They are running costs from eBay irrespective of whether they earn commission or not. We suggest they re-visit their business plan and review the business model. Gerry O' Neill, First Step

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