IN this week's SME Focus, we hear from an entrepreneur who turned a hobby into a business and saw growth take off following a radical change of strategy.

Name: Elizabeth Carnahan

Age: 45

What is your business called?

Gracefruit Ltd

Where is it based?

Longcroft, Falkirk

What does it produce, what services does it offer?

Gracefruit is a family-owned business which supplies a diverse range of raw ingredients for soap and cosmetics.

Who does it sell to?

We sell mostly to small or independent soap and cosmetics firms throughout the UK, but in Europe we find a lot of bigger businesses and shops will buy from us.

What is its turnover?

£770,000.

How many employees?

15 based in Longcroft and 24 distributors all over Europe working on our behalf.

When was it formed?

2005

Why did you take the plunge?

Since I was a child, I've always known I was made to be self-employed. I can't work for anyone but myself!

What were you doing before you took the plunge?

I was a housewife when I started making soap. I've always been interested in bath products and soaps (because I love to use them) and thought soap might be a way for me to earn a little money while staying home and looking after two young children. I read a soap making book and was very keen to try it, but the chemistry of it all scared me a bit. I think I studied for nearly a year before attempting my first batch in 2003. All of that study must have paid off because my first batch of soap was really lovely.

I started off making my own products to use at home - bath salts and soaps etc. It was quite addictive, and I soon found myself with a lot of extra bars of soap. I decided that it might be a good idea to sell the soaps to fund my soap-making habit. I did this mostly at craft fairs and farmer's markets, selling soap come rain or shine - but mainly rain. I sold soap directly to the consumer and had many regular customers who would come to visit me at markets.

After working at the craft fairs and farmer's markets for a few years, I noticed there were more and more stall-holders selling soap. With competition increasing, I spotted a gap in the market for the sourcing and distribution of the materials required to make organic fragranced soaps, so I decided that it might be better for me to supply all of these soap-makers. This led me into selling cosmetic ingredients and Gracefruit was born - from my dining room.

I belonged to a few soap-making forums online and was able to speak with other soap-makers from all around Europe, and as soon as I let them know I was opening my own shop, I had a small group buying from me immediately. These soap-makers also belonged to other forums, and it didn't take long for word to get out that I was selling fragrance oils for soaps.

Within four months of launch, we moved to our first premises, followed five months later with a move to our first warehouse. I have just recently taken over the business space next door to my premises to help with distribution.

How did you raise the start-up funding?

I was given what was, for me at the time, a very big order for soap from one company, and put everything I made from that order into starting up Gracefruit as a supply business.

What was your biggest break?

Hiring the right staff; definitely. If your team doesn't share your business ethos your business just won't work. For us, the most important thing is getting orders to our customers quickly, efficiently and at what we think is a good price.

What was your worst moment?

We have distributors working for us all across Europe. One of the first was our French distributor, a lady called Laurence. She sadly died in October 2011, and that was a big blow. Losing such a lovely person who was also a valued colleague was very difficult.

What do you most enjoy about running the business?

For me, it is really thrilling to research and take on new ingredients and products which our customers have asked for - and even coming up with things they don't even know they need yet!

What do you least enjoy?

Book-keeping and admin.

What are your ambitions for the firm?

I would love to export our products globally. At the moment, we primarily export to Europe. Getting our products into South America, the Middle East and North America is a definite priority.

I have recently received a grant from Falkirk Council's Growth & Investment Unit to help fund a new telecoms system and have also been accepted on to the Business Gateway Growth Pipeline which has a great support system to assist with my growth plans. They have a team that can help with international development, which will be a good support as we continue to export.

What are your top priorities?

In no particular order: designing and producing our own, exclusive range of cosmetic packaging; exporting our products globally;

continuing to build customer trust and loyalty.

What single thing would be of most help to your business?

Capital! Always more capital.

What could the Westminster and/or Scottish governments do that would help?

Reduce the administrative burden on small business. We spend a vast amount of time filing reports that don't assist us in any way. Any government-imposed administration seems like a waste of time that could otherwise be put into boosting the business.

What was the most valuable lesson that you learned?

Grow at your own pace. Don't let anyone pressure you into doing too much, too soon. If you have a feel for your own business, you'll know when the time is right to take a risk - never feel pressured into making decisions that don't feel right. I've almost always gone with my gut instinct - and it rarely lets me down.

How do you relax?

Baking bread. I find the whole process of kneading the dough and preparing the bread extremely  relaxing.