Some commentators have mistaken Dream Direct as a software venture. Others have dismissed it as a 'blue-sky' web operator. The company is neither of these. It is a very simple mail-order business, selling computer software to a particular niche of the mass-market.

Dream slipped onto Aim in May after reversing into fully-listed food producer Willisham. Its launch was accompanied by a £300,000 placing at 88p and a KBC Peel Hunt-advised offer at the same price. In total, the company now has £1.37 million (plus a £500,000 debt facility) at its disposal.

Dream has been around for a few years, but chief executive Robert Colquhoun believes that the recent injection of cash 'will enable us to take advantage of the markets we serve at a much more rapid pace'.

Dream's niche is the supply of 'family'-orientated software. It targets consumers aged between 35 and 55 who are buying PC software for the rest of the family.

Its stock in trade is board games that have been computerised (such as Monopoly and Scrabble), mystery, adventure and strategy games (including the classic Myst and chess). It also sells a lot of educational software (computer learning, language programmes, dictionaries and encyclopedias), and general interest and information packages. Some of its best-selling titles have come from partnerships and 'special offers' with Hornby (for Scalectrix and railway software) and the publishers of Harry Potter intellectual property.

'We have shied away from concentrating on the teenage-only games market which is too competitive,' says Colquhoun. 'Our focus on the family market is borne out of the fact that this market is largely untapped and is growing – by 2003, we reckon it could be worth close to £750 million.'

The most important aspect of Dream's business is customer acquisition. It picks up customers by engaging in direct-mail and putting inserts in national newspapers.

'Our business model is all about gaining customers. We use a wide variety of basic marketing tools; the most important is probably inserts in the weekend press. At present we have over 200,000 customers who have bought from us using our catalogue or our website. The average spend is probably in the region of £40 per order.'

Colquhoun readily admits that the money feeding into the company from this batch of people is not enough to take the group into profit, but he remains bullish about his short- and long-term goals.

'To reach operational profitability we probably need around 250,000 customers. To take a business like this into pole position in the market, where we can harvest serious profits, we reckon we need around 500,000 customers. That's the holy grail.'

In the next two to three years, Colquhoun intends to exploit the efficiencies that the internet offers (35 per cent of orders come via the web) and ratchet up the number of mailings and inserts to hit both these targets.

In 2001, Dream issued around 11 million catalogue inserts in the national press. This year it expects to complete around 25 million. The number should rise to 45 million in 2003.

'We are experienced mail-order people. We know it's a numbers game, and provided you use your data appropriately, customers – and profits – will arrive. It's a three- to five-year project.'

In the year to March 2001, Dream achieved sales of £1.7 million and made a loss of £1.5 million. This year, it expects to double the sales figure and curtail losses slightly. By 2003, it expects to be in profit.

If you have got a brave heart and a longer term outlook than most in the market at present, Dream could bring big rewards.