With a business that grew from nothing to one with a £2m turnover in only three years, Angela McLean had the childrenswear market sewn up. But ultimately, the success of the company was its undoing, and now she teaches business students the hard lessons she learned. Sarah French reports.

FROM shivering jockeys to muddy children, Angela McLean has spotted opportunities for business in the most unlikely of places. As a wife and mother, she built commercial ventures from everyday problems, often using no more then a sewing machine at a kitchen table.

Angela, one suspects, could make a business out of anything.

That, coupled with the experience of building a high-profile business in her 20s, only to see it crash, explains why she is in such demand by the region's universities.

With her children grown up, Angela's latest venture is Fast Forward Now Limited, through which she is helping students learn about enterprise and how to turn ideas into viable businesses.

Nurturing an entrepreneurial spirit among the region's young people is regarded as the key to improving the economic fortunes of the North-East.

Angela's business provides universities with a link between education and enterprise. She has also developed a successful graduate enterprise programme at the Universities of Newcastle and Northumbria, where many of her students have gone on to win national and international awards.

Angela began her career in marketing at car dealership Reg Vardy. She left the motor industry to marry a racehorse trainer and it was through her involvement in racing that she spotted her first business opportunity.

"It was my job to wash the jockeys' silks, and I couldn't believe how unsophisticated they were, made from quite flimsy satin that the jockeys wore in all weathers and with no cuffs so the sleeves kept riding up their arms. They even had to put elastic bands around their wrists to hold the sleeves in place.

"I thought, 'why doesn't someone just put cuffs on them and make the silks out of breathable or waterproof fabric?' No one else was doing it, so we started making bespoke racing colours. It was a cottage industry for a niche market."

The business was successful, and after two years, Angela sold it for a profit.

By then, her daughters, Stephanie and Jessica, were old enough to play outside.

"The only waterproof clothes for children at that time were all-in-one mini boilersuits that weren't very practical, so I made them each a pair of waterproof trousers. Fortunately, I had the skill to make anything with a sewing machine."

Baggers, the product and the company, were born. Little Baggers and Big Baggers in different sizes for younger and older children followed.

The concept took off. Within three years, Angela had gone from a sewing machine on the kitchen table to running a company with a turnover of £2.5m.

"It was an amazing learning curve, but I knew that we had to develop new ideas to get the business really motoring. What I didn't understand was that when a business is growing, you need money, and that's where our problems began."

Baggers had everything going for it - a strong product with enormous potential, innovation and creativity, a unique brand, good sales and marketing and demand from customers.

Angela used her marketing background by putting the business forward for competitions in women's magazines. By winning them, she was guaranteed acres of free publicity, including a slot on the BBC Clothes Show programme.

The company also won the Barclays Small Business of the Year Award in 1990.

The downside was that national exposure brought customers by the thousand. Baggers wasn't ready for them and many were let down.

There were other mistakes, like agreeing to an on-pack promotion with Heinz. "I didn't think that our customers, who had paid £25 for their set of Baggers, might not be too happy about their child's clothes being available for labels off a few tins and a couple of pounds," she said. It was an early lesson on the importance of strategic planning for small businesses.

Imitation is said to be the highest form of flattery, as Angela soon found to her cost. A major high street name and a supermarket chain both expressed interest in Baggers but, after several meetings in London, she found her calls were not being returned.

Her disappointment at finally being told neither company wanted to proceed with a contract was only exceeded by her horror at walking into their stores a few weeks later to find copies hanging on the racks.

"That is devastating for a small business. You put your trust in big organisations, but I was young and nave and didn't understand that kind of thing went on," she said.

Then there was the conman who pretended to be a buyer from Harvey Nichols in a ruse to get hold of the products in bulk.

Angela's inexperience was most apparent, though, when it came to money. She confesses: "I went to a meeting with my accountant. He was talking about balance sheets and cashflow and I didn't understand a word."

By then manufacturing in China, with a six-month cash cycle, working with unreliable suppliers and continued customer demand, she admits they lost control of their "wild child".

"If Baggers was a person, it would have been in a detention centre for young offenders. I had created an unruly monster that I really didn't understand.

"Everyone wanted the product, the business was profitable, but we just ran out of cash. It's the main cause of business failure - you can be profitable, but if you run out of cash, that is when the problems start.

"It's something that I drum home to students now, because they don't understand the difference between cashflow and managing profit."

Baggers' basic problem was there wasn't enough money to begin with. They were also short of management skills.

On seeking investment from 3i venture capital, Angela took it personally when they told her they would need to bring in a managing director. "That was really hard to take, but they were right," she said.

It was another serious low point when 3i walked away, but then a North-East investor stepped into the breach. But in return for his financial backing, he wanted a majority share.

"I came to terms with the fact that it was better to have a small piece of a big pie than 100 per cent of nothing, but in the end we had a major bust-up and it all fell apart. It was devastating, but you have got to pick yourself up and battle on."

The investor sold the product to another company, though Angela still owns the Baggers name.

"If I had the experience, knowledge and training, or even some of the support that is available to my students now, I know Baggers would have been a very different story. I was very inexperienced, but I have learned so many lessons. I don't take risks as easily any more and I plan strategically."

As Entrepreneur in Residence at the University of Newcastle, she is a consultant lecturer teaching strategic marketing, entrepreneurship and small business management up to MBA level students.

"I had done a part-time MBA myself and a residential course at London Business School. Until then, I hadn't realised how education could help you learn to run a business. I had a burning passion to work with young people who wanted to start their own business and could pass on real experience to make them aware of the pitfalls."

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