Funding / Finance advice for small business

loiseve

Hey all

Me and my partner run a small online business, {removal requested by savvy sue}. We manufacture and sell contemporary Home and Gift items and we work from an office / workroom in our home.

We have been going for just under 2 years and made a small loss last year of £700 approx. We have spent the last two years doing small scale advertising and using the revenue to aquire equipment, small amounts of stock, develop our website and products and of course all the design work. We have basocally been busy 'setting up'. We now have everything good to go and our next step is to really push our site and invest in some advertising. We have some great ideas but we basically dont have the capital to get things moving. Our sales are great considering our low traffic and we know we have a great product, but our personal funds are exhausted, whilst the business has never taken out any loans of any kind, we are struggling to find the funding we need.

Both our credit ratings are VERY poor (both ex students in recovery) and we do not own any property. Our bank wont give us a loan and as we dont have 2 years accounts we cant even seem to get a business credit card. We feel quite stuck. We only need about £2K, even less than that would help!

any ideas??

Horace

If you have a poor credit rating and your own bank won't give you a loan then I don't see any bank loaning you any money. Grants for businesses are very few and far between and usually with grants you have to stump up some cash as well.

Maybe you need to optimise your website (you can do this yourself) so that you can be found easily on the internet, start linking with people and get some reciprocal links going.

You need to look at different forms of advertising - look at the free stuff e.g. setting up a basic account on LinkedIn and join some groups on there that are relevant to your business, get a Facebook Page and use that to promote your business, join groups and pages on Facebook relevant to your business, have a twitter account and use that to promote your business to a wider audience. I happen to know that if you follow @TheoPaphitis on Twitter that on Sundays between 5pm and 7.30pm if you tweet him about your business using the hashtag #sbs, he will select 6 and retweet them later in the evening...you can do all this for free.

Maybe you could do some craft or wedding fairs - negotiate fees and that way your gift business could reach a wider audience.

It is possible to start a business with zero funding - I have done it and whilst it hasn't been easy I am still hanging in there after 2 years, it is only now that I am starting to earn some money. A physical product is far easier to sell than a service and it has taken me time to build up contacts via networking who are now willing to take a chance on the service I provide.

Rather than trying to get funding (which is pretty much non-existent) have a look at what you can do for free or for very little money to boost your business.

Savvy_Sue

loiseve, please could you edit your post to remove the name of your company. Horace has given some good advice about free ways of advertising, but using this forum isn't one of them. Please see the Forum Rules.

loiseve

Savvy_Sue wrote: »

loiseve, please could you edit your post to remove the name of your company. Horace has given some good advice about free ways of advertising, but using this forum isn't one of them.
Hi

My apologies, it wasnt my intention to use this forum as 'free advertsing'! I merely wanted some advice, hence not putting my website in the post?! I didnt come here to promote, I came for some much needed advice. Thanks Horace, we are working on a lot of thos things anyway, its just so slow!! I guess we need to be patient.

paulwf

Best way to raise capital: both get full time jobs, coordinate them so the hours don't overlap too much so you can run the business between you, live off beans on toast and both chuck £50 a week into the pot for the business. You won't answer to anyone and it will save you a lot of money as commercial borrowing comes with lots of fees.

I think you need to be realistic as well about the level of funding required. You don't just need money for advertising you also need lots of spare cash for stock. When a wholesaler is clearing out an end of line product at a silly price you need to be able to jump within an hour and buy it all up. If you are always having to buy to order you're never going to get the right margin. Wholesaler clearances make you easy money plus you can choose to pass the dioscounts on to customers if you want to attract some more sales.

You also need to make some changes that don't require money. Your site doesn't list a phone number (you state you don't) and as far as I can see there isn't an address. I have a policy of never buying anything unless I have full contact details, there are too many mickey mouse outfits that run like this and when something goes wrong you can't get hold of them. You're going to unfortunately be treated the same way until you provide full details...and actually as you list a registered company number you have to provide an address when selling online. You're selling £79 clocks, you need to give customers confidence.

Some of the copy on your site is poor, this costs nothing to fix. A quick example "Join us to recieve exclusive member discounts including exclusive member offers and discounts. All we need is your e-mail address, a username and a password, and within seconds your done!" That has three errors I would fix in two sentences! Not acceptable when you're selling £159 pieces of wall art, you aren't selling £1 widgets on Ebay.

My thought is that you need to write a comprehensive business plan of everything you need to turn this into a slick profitable business. When you are making a small loss it is so tempting to think "if only I had a couple of thousand to spend on advertising to turn this around" but there is never a magic wand, before you know it you'll want "just a little more" to spend on promo and so on. Sit down and work on everything - supply, logistics, cashflow, where the business will be housed, staffing, basically everything.

loiseve

Horace wrote: »

have a twitter account and use that to promote your business to a wider audience. I happen to know that if you follow @TheoPaphitis on Twitter that on Sundays between 5pm and 7.30pm if you tweet him about your business using the hashtag #sbs, he will select 6 and retweet them later in the evening...you can do all this for free.

Thats a great bit of advice, thanks. What does sbs stand for?

Horace

Not sure what #sbs stands for, I don't really understand twitter speak because I am still getting my head around it. maybe it means small business service but that is only a guess because I have no idea. I do know that Theo won't accept tweets on Sundays without the hashtag if you want to be in with a chance of a retweet.

loiseve

paulwf wrote: »

live off beans on toast and both chuck £50 a week into the pot for the business. You won't answer to anyone and it will save you a lot of money as commercial borrowing comes with lots of fees.

I think you need to be realistic as well about the level of funding required.

You also need to make some changes that don't require money. Your site doesn't list a phone number (you state you don't) and as far as I can see there isn't an address. I have a policy of never buying anything unless I have full contact details, there are too many mickey mouse outfits that run like this and when something goes wrong you can't get hold of them. You're going to unfortunately be treated the same way until you provide full details...and actually as you list a registered company number you have to provide an address when selling online. You're selling £79 clocks, you need to give customers confidence.

Some of the copy on your site is poor, this costs nothing to fix.

My thought is that you need to write a comprehensive business plan of everything you need to turn this into a slick profitable business.

Wow thanks!!

Really helpful advice and I agree with every point you have made, some were even on our massive to do list and have now been refreshed in our minds!

Thank you - we will get going!

paulwf

BTW your delivery & FAQ page needs proof reading...don't just use a spell checker (though that helps), get someone else to have a look at it. I usually suggest someone slightly older who was raised in the era of the "3 R's", younger people rely far too much on Word which of course doesn't take account of context. You really shouldn't have allowed so many mistakes to slip through, with all due respect you need to get passionate about doing everything perfectly. Remember it is slightly older people that have more money to spend on home furnishings and they are less likely to tolerate bad English.

With your site layout most shopping sites allow you to click on the image and then get more details. I would certainly expect more details than what you have listed given the price of the items you sell. I think this would give you a chance to really stand out from the opposition. Some other retailers are just knocking them out on Amazon and Ebay with generic descriptions. You could take your own pictures and write your own descriptions and that personal touch could set you far apart from the rest.

You seem to be able to write some good copy (once its proof read!), I think a small but select range that you really believe in and that you photograph and write about yourself could be the way to have an edge over the box shifters.

loiseve

paulwf wrote: »

I usually suggest someone slightly older who was raised in the era of the "3 R's", younger people rely far too much on Word which of course doesn't take account of context. You really shouldn't have allowed so many mistakes to slip through, Remember it is slightly older people that have more money to spend on home furnishings and they are less likely to tolerate bad English.

With your site layout most shopping sites allow you to click on the image and then get more details. You could take your own pictures and write your own descriptions and that personal touch could set you far apart from the rest.

You seem to be able to write some good copy (once its proof read!), I think a small but select range that you really believe in and that you photograph and write about yourself could be the way to have an edge over the box shifters.

ha ha ha...well you would be suprised to hear that I actually used to work in PR and Communications and copywriting used to be my job! I admit, ten years on and three children later I have lost my touch! The site has been a working progress and has had up to three different people working on it and the errors are mostly of a result of enthusiasm to get the job done, working late through the night with tired eyes and fingers or just too many people doing bits at a time.

I completely agree with what you are saying, and whilst we knew there were some typos / errors, we didn't put it high enough on the list of things to do. You're right of course, with the level of products we are selling, everything must be perfect. I should apply what I studied at university and my early career to my own business it seems.

I had a big smile on my face when you mentioned the lack of details. If you view the 'cushions' you will see that they are indeed 'clickable' and my partner is sat beside me working on the rest of the areas as we speak. It's a big old task though - he's certainly had lots of late nights over the last week doing the cushions alone!

I don't know what you mean about the descriptions and the images - 75% of the images are our own?? We have been on ebay and amazon though, and even have a few on Ebay right now, but people often steal our images. I also write all of the descriptions myself? If you could elaborate on what you mean here? Do you mean the clocks? Those images are not ours; they belong to the manufacturer.

Anyway, we seem to be on the same wavelength and I really appreciate your feedback and agree wholeheartedly with the points you have raised and the thinking behind them. It has given me the direction I need, i.e. stop focusing on finding money when I could spend some time using my already aquired skills in making our site more appealing to buyers. Thanks!

mizzbiz

#sbs stands for 'Small Business Sunday'
HTH