How a rundown Sydney cafe set Emily McWaters on the path to create a $10 million gifting empire

In 2006 Emily McWaters and her sister bought a café in Sydney for $20,000. One year later the paid sold it for $180,000 – nine times their investment.

Today, McWaters is the founder and chief executive of one of Australia’s leading online gifts company, The SOL Group, which turns over $10 million a year and dispatches more than 100,000 gifts annually. The Sol Group includes The Hamper Emporium, Gifts Australia, Everything But Flowers, and Men’s Gift Store.

McWaters’ journey to where she is now started in 2003, when she chose to drop out of law school with only two semesters left.

“I think it was the best thing I ever did, I wasn’t really very good at studying,” McWaters told SmartCompany.

“My parents were accepting of the choice, but cut me off financially. I had to sink or swim, and after a little while, I swam.”

That “little while” involved a number of years distributing and promoting wines, both of which McWaters admits she was “not very good at”. It was at her café in Rose Bay, Sydney, where her business journey really started.

“My sister had just finished school and I roped her into buying a café with me, we both invested $10,000 to purchase it,” McWaters says.

Armed with very little knowledge about running a café, McWaters and her sister received the keys at 5pm, cleaned all night and opened for trade the next morning. The next night, they did it again.

“The place was so rundown, but we couldn’t afford not to trade, we didn’t have enough money to do that,” McWaters says.

“For the first few weeks we weren’t very good at what we were doing, but we picked it up quick.”

Why buying a business is better than starting from scratch

A year later, the café was sold and McWaters set her sights on a new industry.

“After I sold the café, my business partner David and I looked at multiple businesses to buy, but a particular wholesale business is what we settled on,” McWaters says.

The business, Kingston Foods Australia, sourced gourmet food from around the country, and was distributed through Coles, Woolworths, and David Jones. Being the second business she had bought, McWaters was experienced with the process.

“I like the concept of buying a business, just throwing yourself in the deep end. I think it’s something that people need to consider rather than always having a startup,” she says.

“A lot of people underestimate the hard work and energy needed in a startup. With buying a business, you’re forced straight into the day-to-day operations.”

After selling that business in 2014, McWaters chose to continue with a subsidiary established during her time at Kingston Foods – a hamper provider called The Hamper Emporium.

This business formed the basis for The SOL Group, which McWaters currently runs with her two sisters. She claims it “doesn’t really feel like working at all”.

“My older sister is our chief operating officer, and our younger sister is our marketing manager. We all love it, and we all have such good energy and passion for the business, it just flows with our life,” McWaters says.

Wait to seek investment

The SOL Group has always been self-funded, which McWaters admits has been “at times quite difficult”. But having once thought about seeking investment for the business, McWaters says she regrets ever looking into it.

“We did consider investment once in 2012, and I got quite distracted by it, which I regret,” she says.

“At the time it felt quite enticing, and it was the be all and end all. I came to a point of realisation it wasn’t going to work for us, and I vowed to never do it again.”

McWaters believes this is a trap businesses can easily fall into, and says investment should only be sought once a business is established and well built.

“Instead of spending time building up the business, you end up spending time presenting yourself to investors,” McWaters says.

“Young businesses can’t afford to be distracted, so it’s something to look at later on in a business’s life.”

“Everyone wants everything right now”

As a business that relies on delivery services, The SOL Group has run into difficulties with courier services in the past. McWaters says it is something the business is focused on improving.

“Despite our efforts, it is still to an extent out of our control how the final courier delivers the parcel to our customers. We have to take full responsibly for everything, even though it isn’t our company’s responsibility,” she says.

The SOL Group has been improving its relationships with courier companies, but McWaters says customers still don’t understand. She believes this is something that smaller online retailers have always struggled with.

“We live in a world where everyone wants everything right now,” she says.

But the difficulties in this area also represent an opportunity for future expansion; McWaters hopes to move away from using courier services entirely and instead have “full control over the fulfilment of the orders”.

The delayed impact of social media

Despite having optimised and streamlined websites across the SOL Group’s entire portfolio, the company’s social media has until now not been a top priority. McWaters admits she has been “a little slack.”

“Starting the business, I didn’t really understand the benefits of social media, and even now I don’t fully understand,” McWaters says.

“Currently we are focused on it mostly for social proofing, and I’ve hired someone in house to work on social media.”

McWaters acknowledges it can take some time for smaller businesses to see the real impact of social media, but also believes it “suits some brands but not others”.

Have faith

McWaters says the most important thing she has done over the course of running her businesses is having faith – something she believes is “critical to success”.

“Have faith in yourself, your business, your product, and your team. Pressures can become overwhelming, but if you maintain that undercurrent of belief, you will always achieve,” she says.

But that doesn’t mean holding on to an under-performing venture at all costs.

“One venture that is dragging you down can affect everything,” she says.

“We like to try new things, and I think I’ve become better with working out what new things work.”

“But businesses can’t be afraid of cutting losses and moving on.”