Looking to start small business, a computer business

XtraPound

Hi, I feel the time is right, I would like to open my own computer shop, I have the knowledge of computers for many years now, I have found a location, the rent is £15,000 a year, I am going to phone business link for a meeting next week, I have £300 to invest, are there grants available?, does anyone have any advice for me please, such as ways to cover myself against dodgy customers, I am most greatful, there is only 1 other computer shop competator locally, they are not taking staff on so I thought why not stand on my own two feet and open a shop, competition is good.

Thank you. :j

paulwf

XtraPound wrote: »

I have £300 to invest

Is that a typo? Do you mean £30K?

XtraPound

paulwf wrote: »

Is that a typo? Do you mean £30K?

No, I have £300 (savings).

SailorSam

Don't you think you could do with a lot more than £300, you;ll need to pay rent; get stock; tools; just have money to live on.
It may be a while before your business grows enough to make a good living.

Good luck though, i hope it all works out.

XtraPound

SailorSam wrote: »

Don't you think you could do with a lot more than £300, you;ll need to pay rent; get stock; tools; just have money to live on.
It may be a while before your business grows enough to make a good living.

I did ask in post #1 if grants are available.

SailorSam wrote: »

Good luck though, i hope it all works out.

Thank you. :j

nearlyrich

Maybe save up a bit longer, your £300 won't even cover the first month's rent, what are you thinking to do about stock, have you got suppliers ready to offer credit (unlikely for a new business) What other competition do you have, internet suppliers etc.

paulwf

With all due respect £300 is way off the mark to be considering takling on a £15K shop. By way off the mark I mean you'll probably want to have access to something like £30K of funds, at least £10K of that in cash and the rest from a bank loan.

No bank is going to even read your plan through when they see a £300 investment from you, they won't be comfortable unless you are putting in around 1/3 of the total.

Exact figures aren't important at this stage but to give you an idea how quickly costs rack up a solicitor will want around £1K to sort the lease, a surveyor £1.5K, you'll need a till, computer, printer, stationery, office furniture...that's another grand. Signage for the shop, shop fittings, tools, stock, uniform...the list goes on and it's expensive.

Grants are very unlikely, it's all about loans these days. Even if you got lucky with a grant it is only likely to be for a grand or two which won't be enough.

Don't give up though...can you go mobile or start on a market stall or do something similar where the startup costs are much lower?

Just do some basic calculations...if you have a £15K rent, £15K wage just for yourself and the gross profit margin is 50% you need to be turning over £60K a year before you even consider other overheads, so more likely a £100K turnover. That just isn't going to happen on £300 capital.

Savvy_Sue

If the OP is under 25, then it may be worth getting in touch with The Prince's Trust, although I'd hope Businesslink would point in that direction as well.

I think your biggest question is how you expect to undercut the 'big boys' selling online. After the seriously big one of how you fund this, but I think enough has been said about that ...

Although I didn't see anyone mention the costs of employing staff (apologies if anyone did): it's seriously difficult to keep a shop reliably open without at least one other member of staff. You can't be in two places at once, so without that you can't be sick / have a holiday / go and pick up stock / make deliveries / take a lunch break / empty your bowels without closing the shop, and that's not good for business.

PasturesNew

Don't take on a shop. The rent might only look like £15k/year, but on top of that you have bills - and - you'd most likely be tying yourself into a long lease that you have to pay whether you're open or closed down ... and then they take you to court and sue you ... and then you go bankrupt ... and then you're back here asking what went wrong and how you didn't understand what you signed.

Instead, investigate locally what are called "serviced offices". These are easy in/easy out places, where you have to give a maximum of a month's notice usually - and things like phones/electricity etc are included in the cost. Additionally, being in a serviced office, you might already have potential customers on site.

Look around as there are various types. Some are offices for people running service businesses (e.g. insurance brokers, PR companies, etc), whereas some are based on business parks and are people who have a lot of deliveries, so are more likely to have roller shutter doors to receive goods in.

I used to run a building of serviced offices, in a prestigious building, for posh punters. Costs back then (15 years ago) were £300-500/month for the room, which included rates, electricity, phone line, receptionist, telephone line and telephone calls answered in the company name. On site too was a fax machine, copier and coffee machine that you paid "per use" for. With a serviced place there's always somebody there on reception to receive goods or hand them over to people collecting things.

Alternatively, is there a small local shop that has lots of customers coming through the doors, where you can take over "a corner". e.g. a phone shop, or gadget shop. Or, even look at indoor markets, see if you can get a stall.

You do really need to think about where your customers will come from though. What services are you offering, what turnaround times can you offer, what prices will you charge, how/where you'll advertise... and put together a business plan of income/expenditure.

tabskitten

aww how Cute!

krustylicious

XtraPound wrote: »

Hi, I feel the time is right, I would like to open my own computer shop, I have the knowledge of computers for many years now, I have found a location, the rent is £15,000 a year, I am going to phone business link for a meeting next week, I have £300 to invest, are there grants available?, does anyone have any advice for me please, such as ways to cover myself against dodgy customers, I am most greatful, there is only 1 other computer shop competator locally, they are not taking staff on so I thought why not stand on my own two feet and open a shop, competition is good.

Thank you. :j

The margins on Components are so small that some companies barely make a £5 on the the product.

If you wish to go small scale do it online and even then you would realistically need a start up fund of £20k to £30k ...