How Redsbaby founders Meagan and Brett Redelman turned $40,000 in savings into a $6 million pram company

In 2013, Meagan and Brett Redelman’s friends were complaining to them about how there was no pram on the market with the perfect mix of design, practicality, and functionality. Working in product development and finance respectively, the two knew this was a space they could carve out, despite never having run their own business before.

Pooling together $40,000 in savings, the two hit the ground running; their business Redsbaby was cashflow positive after just three months. Today the business boasts annual revenue of $6 million, with more than 16,000 sales, and has taken the Australian pram market by storm.

Meagan Redelman spoke to SmartCompany about how the brand’s unique approach to pram retailing has left their competitors in the dust, and the difficulties of starting out a business with no debt or external investment.

Brett and I started Redsbaby in early 2013 and we had always had our hearts set on starting our own business.

The idea came when we were sitting around at a cafe with a group of friends, most of which were parents at the time, and the discussion turned to prams and how impractical they were.

Nothing in their mind was a perfect balance. They wanted something that looked great but was also designed for functionality.

We thought we could do better, so we looked into it a bit more, and that’s when Redsbaby was born.

Brett comes from a finance background and I come from a product management and development background. We were able to leverage both of our skills in setting up the business.

I had worked in a range of companies, and the most recent was one which designed and manufactured baby linen. So I was exposed to the regulations and standards, and understanding what was required from a safety perspective.

We’d never run our own business before.

I had done some work with a handful of Australian companies and brands, one of which being Sunbeam. That was a really unique opportunity where I was exposed to products designed and developed in-house for an Australian market.

Most major brands don’t do it that way; they design more for European markets and then the product gets localised.

We designed our products for the Australian market from the beginning, but there’s a whole bunch of challenges that come with that. We did a lot of looking at the market to see the common frustrations and what people wanted because we wanted to get it right from the beginning.

Getting it right was essential because making changes to a product can be quite difficult. For example, one of our flagship products is a lightweight single pram, but we saw the opportunity to convert that product into a double pram off the back of consumer demand.

That involved a lot of back and forth with the manufacturer, developing 3D model files, and making sure it passed Australian standards all whilst aligning with the needs of our customers.

It took months and months of strict testing and trips to the factory.

To start the business we bootstrapped it with $40,000 of our own savings, which was a personal decision. Debt is a good or a bad thing depending on how you use it and the level of debt you get into.

We decided we would set a number we were comfortable with and use some savings to get us off the ground. We were fortunate in how we managed that money and how we ran it like a bootstrapped business from the beginning.

We were very careful with the $40,000 we invested, but after many long hours of blood sweat and tears, we became cashflow positive from three months in.

Running from that initial capital really aligns you with your company and where you want to take it. A lot of entrepreneurs, the term used loosely, take on debt early because it’s much easier to spend someone else’s money when it’s not yours.

Successful companies align their capital from the beginning. Forty thousand dollars is a low number to start a business compared to where we are today, but we’ve been successful because we believed and backed ourselves.

In the early days, we implemented money saving measures every step of the way. One good one was when we went to visit an offshore supplier, and instead of getting a driver to take me from one city to the next, I took a high-speed train.

This meant I was on a train with a handheld trolley of four 15-kilogram cartons for a three-hour trip. It might have saved us $600, but that’s a significant chunk of $40,000.

It does come down to how long you can work out of the spare bedroom in your house, or how long you can work out of your parent’s garage. But as a small business, if you want to align yourself with your business, you’ll make those commitments from the beginning.

We’ve had a couple of opportunities for investment but each time we’ve politely declined. That’s not to say in the future the situation won’t change, but we don’t feel the need for any third party funding in the short term.

When we started out, we had no historical sales so we were limited in the suppliers we had and the type of manufacturers we could partner with. Now we’ve grown, our manufacturer is one of the top five in the world for brands like ours, and that’s really allowed us to realise the full extent of our product portfolio and where we want to take the business.

We’ve been pioneering the online-only model for pram sales in Australia rather than going through a traditional distributor model. We work this with a national demonstration day program where we get expecting parents in a room and show off our product range.

No other companies on the market do this, although a couple have tried without much success. It’s something that’s unique to our business, and it’s gotten us a 14% share of the total online pram sales.

We are the change in the industry. Our online sales model has shaken up the pram space, and our competitors are stuck in the traditional retail ways of going through stores.

The industry is becoming more trendy, and as a result, we’re seeing lower tier brands following the top tier brands. We try to be the trend leader in terms of our design, and we’re seeing that start to flow through the industry.

One of the main challenges for us looking forward is managing hiring staff while dealing with our growth.

We’re very particular with the staff we hire. We look at their skillset, and if they will be a cultural fit within the business.

The goal is to look for the right person for the right role, and so far that’s worked to our advantage.

As we look to hire more people, we have to make sure we get the right people who can fill the necessary gaps in the business.

Our goal for the Australian market is to become a trusted household brand leader in the categories we operate in and to have an international presence in the long term.

When people see our business — or any other business — that has a level of success, it’s a bit of an iceberg analogy.

They only see the 10% of the business; they haven’t seen the other 90% that goes into building it.

That 90% takes drive, determination, and passion, and means you have to pull up your sleeves when you need to. I don’t think any aspiring business owner can underestimate the amount of time, energy, and sacrifice that goes into building a business.

You should always be realistic about what starting a business will involve.

Also, any new entrepreneur needs to ask themselves: “Is the business unique?” If someone can outdo you easily, they will, and they will copy your business. If you’re a product, and Kmart can sell it at a lower price, they will.

Always question your business idea. If someone can come down the road and copy it, is it unique? We’re in a global e-commerce world, and copying is so prevalent.

And if it’s not unique, work out a way to innovate so quickly that anyone who does copy you is left in the dust.

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