A market where it really pays to be in the pink

IT seems, these days, that being gay has less to do with whose bed you end up in, and more to do with where you spend your money. Unless you're a C-list celebrity with the paparazzi hot on your heels, people are more interested in knowing what you're spending your hard- earned cash on than who you're spending it with.

Businesses have seen the results of appealing to niche markets, such as the "grey pound", tweenies and "middle-age youth". Smart businesses have cottoned on to the fact that the gay community is no different and it is now possible to get almost any commodity specifically targeted at it.

The Gay to Z guide (3, from 41 Cooks Road, London SE17 3NG) lists more than 5,000 gay and lesbian businesses. Its web-site, gaytoz.com, lists an additional 1,500, covering everything from gyms to plumbers and mechanics to finance companies. These are gay-run companies selling to the gay market.

The concept of the pink pound is not new. Bars and clubs have been happy to fill the tills with rose-coloured cash for years.

But now companies are taking it a step further and tapping into the whole gay lifestyle. Even mainstream companies (Absolut vodka, the Bristol and West building society and Ford) have seen the benefits of appealing to the gay community. Steve Coote, the man who set up Gay to Z, said the disposable income of gay people in Britain is estimated at 5 billion. Other surveys have put it as high as 10 billion, and with around 40 per cent of the gay population living in London, there's a great deal of money to be made from it.

One of the newest companies to service the gay market is Queercompany, which launched last November in a blaze of publicity. A large billboard went up in the West End showing two women in underwear kissing, accompanied by the caption "Thank God for women".

The website is the brainchild of Henrietta Morrison, 32, and Dominic Richards, 35, and the company aims to attract advertisers by appealing to a target group. It does this by providing gay lifestyle information: cinema, restaurants, travel and shopping news, and recently it started selling travel insurance specifically for gay people over the internet. Soon, classified ads will be included.

As befits a young, new-media company, the staff are young (under 35) and the office environment is informal but smart. Sofas nestle against desks in its large, open-plan Shoreditch offices.

The staff of 35 (there were 12 when Queercompany began last year) is predominantly, though not exclusively, gay.

The company prides itself on its inclusivity and that includes having at least one straight member of staff.

"I think people are 'tribal' as opposed to sexuality-oriented.

You won't be successful being just a gay business, but you will be successful if you cater to a tribe who share a certain attitude to life," says Richards.

But he warns: "The future for gay businesses as such is that there isn't a future, or rather, not for ones that just rest on their laurels. There is a future for businesses that are inspired to create great services for people."

Chris Morgan is the director of Compass International, a finance company that arranges life insurance, mortgages and pensions for gay people. He set up the company two years ago in the belief that non- discriminatory financial advice was needed.

Now the company has offices in Shaftesbury Avenue and a staff of four.

He says: "I am overwhelmed by the need for specifically gay advice. Most 'straight' financial businesses don't have the first idea about avoiding discrimination and sometimes their advice actually puts gay clients in a far worse situation - having to take HIV tests and answer questions about their sexual activity."

Compass was set up in 1999.

It uses specialist knowledge "of gay lifestyles and 'family' units" to get the best deal for gay clients. In an attempt to reach more people, Morgan recently launched the website pinkfinance. com. "This reaches a whole group of people who don't read the regular gay press," he says.

Darren Brady, 36, is co-director of Outlet property and accommodation management agency. Big Brother's Josh Rafter is the other director. Darren started the agency in 1995 after arriving in London five years earlier only to discover it was almost impossible to find accommodation.

"I went to Gay Switchboard, the only place to go then. But finding accommodation wasn't really its job. It had other problems to deal with," he says. So he set up the agency and it is still the only service to match gay tenants to properties. As a measure of its success, it is taking the scheme nationwide this autumn, and has branched out into finding holiday accommodation for people coming to London.

The scheme is paying off: there are around 300 properties on its books at any one time, and usually three times that number enquiring after accommodation. Outlet is frequently approached by straight people, especially women, who feel more comfortable with the idea of sharing a flat with a gay person.

With its offices in Old Compton Street, the company is in the ideal location to connect with its gay client base. The 12 fulltime staff can help with the paperwork: faxing, photocopying, tenancy agreements and housing advice.

The Soho Athletic Club opened in Covent Garden's Macklin Street seven years ago. The gym was the brainchild of three businessmen, including entrepreneur Jeremy Norman. There are now branches, recently rebranded Soho Gyms, in Camden and Earl's Court, and a fourth is set to open soon in Clapham.

Gym director Michael Fenton said the original philosophy was to create a comfortable environment for gay men and women, adding: "But the contradiction is that we do not want to create an environment that is exclusive, or part of a ghetto. We want it to be inclusive: comfortable for gay men and women, and also straight men and women."

The idea has really taken off.

The combined membership of the gyms is now 7,000, and the club rules still stick to the original idea. "We celebrate difference. Discrimination, on any basis, is not tolerated.

This is the perfect environment for fighting prejudice."

Serving the community

SO what do you do if you want to set up a business to cater for the gay community? The first stop should be the Gay Business Association (0700 2255422), an organisation that has been helping gay and gay-related businesses to get off the ground for 17 years, and now represents the interests of 220 firms.

Kevin Waite, co-ordinator of the GBA, says: "An increasing number of businesses know there is a market there, and we facilitate access to it.

"By and large, gays and lesbians do have a higher-than-average disposable income, but what is relevant to us is how they use it. Obviously there's no need for a gay Tesco, but you may want to consult a gay or lesbian solicitor or, from a security point of view, use gay or lesbian people in the home.

Some people want to show support for gay services. But we also give advice to gay organisations that want to trade outside of the gay community."

Here are some tips from the GBA for setting up a gay-friendly business:

As with any other business, do your market research before jumping in.

Set up a stall at Mardi Gras to test the market.

Although blessed with a relatively high disposable income, the gay market is still relatively small. The gay market should ideally be an add-on to a broader business, not the basis for it.

What matters above all is quality and value for money.

Copyright 2001
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