How to finance a new business! Please help!

hjc1305

Hi
I am just starting up my own business, Trinkets By Moonlight, which sells the handmade sterling silver jewellery which I make from home. I am a full time mum so this job fits in perfectly with my lifestyle. However this is such an expensive hobby/turned business that my already overwhelming debt is getting even bigger. I just don't know where to turn to get some money to help finance my business. I have already spent well over £1000 on tools, silver, getting a website up together etc but it is taking time to get my website recognised and get sales up and craft fairs are far and few between. I have been selling jewellery on my ebay shop but they take such a large proportion of my sales that it is ending up costing me money! Not great! I only need a few hundred pounds to help me buy silver to increase my stock, pay for some craft fairs (which on average are about £100) and to pay for some advertising. I just don't know where to get this money, I don't want a loan as I can't afford to pay monthly payments, I don't really want another credit card as I already have one so I was thinking about getting a business account with a fee free overdraft, but of course then you are being charged interest on the amount you are overdrawn???!?!?! Oh I just don't know what to do or where to go? Any help would be greatly appreciated. I don't have any savings, my husbands earnings are nearly completely gone on bills, mortgage, credit card and loan so I have no access to any other cash.
Please advise me, many thanks, heidi

motorguy

I dont see how you can do anything other than take on some form of loan - either personal loan, credit card or overdraft. My preference of those three would be an interest free credit card.

How come ebay costs are negating your profit? You should maybe post on the ebay board and see if theres anything you're doing fundamentally wrong. I cant see how ebay costs could amount to more than 15% and if thats all the margin you can attain on your products then i would seriously question your business viability.

motorguy

Post on one of the regional boards and ask for details of craft fairs in your area - you might be surprised how many there are. Also you may have to travel.

I would have thought the priorities would have been ebay / craft fairs, then expand into your own website. Making a good e-commerce website that really works could cost thousands and at the moment all you have is an expensive hobby / loss making business.

lb364

Perhaps a business angel - someone who invests in the business to receive a share of profits (like dragon's den) could help?

Anyone know a way for the OP to find one for free?

hjc1305

Thanks for your quick reply. The problem with ebay is that they charge £14.99 a month for your online shop, then still charge on top for each item you list, if this then doesn't sell you then have to pay again for relisting it and then they take a percentage when you do sell anything. Seems so much to me, especially when some of my items are only £10.

I agree the only option is really another interest free credit card, just wanted something a bit more like a business account with a interest free credit card or overdraft. Or maybe a personal account I suppose with an interest free credit card, but already have the alliance and leicester one. Oh it's all so confusing and difficult to know what to do.
Thanks for your reply, heidi

Caroline73_2

I do lots of craft fairs and there are lots less than £100. You could try things like school fairs and toddler groups. Both of those would charge a minimal fee, or a percentage of sales. You could also go down the party planning route.

What kind of prices do you sell your jewellery for? I am just wondering how if you are making a loss on ebay where you only pay Paypal and Ebay fees you expect to make a profit at a craft fair, where you would need PLI, transportation, table fee, time taken travelling and all day/weekend at a fair.

You'd struggle to get a business loan if you can't show any profit. If you got a loan, how would invest it and how can you turn this into profit?

What is your current mark up per item?

hjc1305

I have obviously been doing craft fairs!!This is where I focus my selling and I have searched high and low for ones in my area but believe me they are far and few between and the majority of them allow people to come along and sell the cheap brought in crap from Hong Kong. I have already got a website up and running which didn't cost thousands as a friend did it for me, this has been up and running for about six months now. I just need funding for me to build up stock and pay for the more expensive craft fairs.

lb364

I really like your site, the sweetheart bangle is particularly nice
I think perhaps you could put the prices up though - I've only looked at the bracelet section but even with another £5 on each I don't think they'd be overpriced then perhaps you could offer the extra as a discount occasionally...just a thought

Also, I wonder if you could get in your local paper as a local entrepreneur..?

hjc1305

Thanks for your reply. yes perhaps I do need to relook at my prices. I find it hard to price up my pieces I must admit. On ebay I find all the charges mount up, £14.99 a month for the shop, plus insertion fees plus the percentage they take at the end of it, then paypal take their bit too. Think I might just put it on ebay but without having a shop, I am not sure what their rules are, will need to check that out. Also with the school fetes etc I feel that people would only want cheaper jewellery and not expect to be paying £20 for a bangle etc. I have been doing the arts/craft fair in Southampton last year but it gradually got pushed into the regular market with the really cheap jewellery which is not handmade but brought in bulk from abroad. It's difficult to find the right sort of fairs. Anyway thank you for looking at my site and for offering your advice.
Heidi

pelirocco

How much stock do you have at the moment? , its not a wise move to borrow money to invest in more stock when you havent sold the stock you have . You need to price your goods to reflect what it has cost you to make , that has to include all your over heads and a fair mark up for profit.

Mind you posting on forums is a good way of advertising your site:rolleyes:

PasturesNew

Etsy is a big site where people sell hand crafted items online. Etsy started as a US company and does have a UK part too, but there are other sites like Etsy where you could look into selling online. Selling on these sites will get you traffic that would never have found your own site - and, through the sale/exposure, you get to let more people know about your main site. Plus you can further build your mailing list.

Here's a list of UK sites like Etsy: http://hubpages.com/hub/sites-like-etsy

Good luck!