Start up Business Finance help!

pitkin2020

paulwf wrote: »

Sunny I know this isn't what you want to hear but your current business plan just isn't going to happen. In the current climate no one is going to give you a 100% loan, especially for £15K and presumably without security. It doesn't matter how good your business plan is, that's just the way it is.

Put yourself in the shoes of a lender. Unless you are personally going to put in a significant stake they will be concerned you don't have a strong enough personal commitment to make it work. You have to show them some money so they know you are serious and not going to drop the project if it gets tough. You also need some money to do the initial stages before you are in the stage to formally apply for the loan.

If you really want this to work either find a way to start up with little capital or look on it as a long term project and work out how to save some money over time. If you are both talented enough to run this business you will get there. Good luck.

Spot on, without any real assets a 100% start up loan is very unlikely. You could try something like the princes trust and see what they may or may not be able to offer you.

As others have said try and start small, I know with returns you normally have to buy anything from a single pallet to a lorry of pallets, which i'm guessing the lorry is where your hoping to start with @ 15k. You would be far better starting with a single pallet and build it up. If you can prove a track record for several months the bank maybe more willing to lend, hopefully by then though you will have enough capital behind you.

Atleast with starting small you can also reduce your costs, you won't need the expense of an industrial unit as you could do it from home to start with. You could even borrow off a credit card to get the first pallet of stock if you had to but you would be better off trying to get some cash behind you first.

paddyrg

Start small, prove the model works with a £1000 investment, then grow with the profits and proceeds. If you can't grow a grand into more, what would make £15k 'work', if you get my drift? If you can grow from £1k to £7.5k, the bank will be happy to lend you the balance as you'll have a viable business, if you can't, they won't anyway.

grey_lady

There's actually some very good advice here, I hope you do come back and read the constructive parts. Just to add, is there anyone else you know that might consider being partners? Are there any start up grants available to you?

bengalknights

The ideas about starting small and growing the business should be taken as good advice after all why get into debt on something you could slowly grow.

jexygirl

Loads of honest and true advice, and even though you arent reading because someone said there is no Santa claus... Im typing a reply anyhow!

Whilst I recognise you are trying to help yourself, if you spent hours / days doing a buisness plan, thinking you would get the money for sticking a few numbers on a sheet, then you simply didn't research enough.

Silly as it may sound - have a clear out and go charity shop hunting, buy a few bits for a few quid, clothes /nik naks whatever, it might only be a couple of pounds a week that you can manage. Learn the best /cheapest/most cost effective way of buying what does or doesn't sell, wrapping, posting, record keeping, waiting for free list days etc.

I think not getting the 15k is a blessing, as it sounds in all honesty like you have an awful lot to learn, surely it is better to learn with a few quid here or there on items, than a 15k loan around your neck that you can't pay back, nor can you shift the stock because you bought stuff you thought would sell that doesnt, and then find you dont have time to wrap /post / ran out of stuff to wrap with / underestimated postage so you made only £2 on a £10 item (not a great return) dont have time to stand waiting at post office for proof of posting etc.

Underestimating postage, or wrap costs, or refunding postage when overestiamted, the time it takes to administer, not accounting for ebay and paypal fees etc. There are SO many lessons to be learned from having a clearout / trolling the charity shops its untrue - try it and see how you go - and yes I know you want a quick fix make a million or at least a living... but again, there is no santa claus.
Jex

motorguy

paddyrg wrote: »

Start small, prove the model works with a £1000 investment, then grow with the profits and proceeds. If you can't grow a grand into more, what would make £15k 'work', if you get my drift? If you can grow from £1k to £7.5k, the bank will be happy to lend you the balance as you'll have a viable business, if you can't, they won't anyway.

This was / is the model i am using RE: car sales. I was able to buy one car, and make a profit. By doing that several times, i got the money to have two at a time, then three.

I've now just went full time at it and am doing quite well. I know i can make more money if i have more cars to sell, but my limitation is my available cash. I'm circumventing that by selling cars for other people (who have bought the cars with their own cash) and taking a split on the profits, and also by buying cars with other people. I have also managed to borrow some money off a family member.

Now the way to grow my business over the next year will be to convince the bank that i have a model that works, and that by borrowing money i can make more money. I can do that over a period of time by the levels of in and out movements of cash in my business account and through my year end accounts.

And i've got from part time hobby, to full time job making money in less than a year.

I dont see how my model couldnt be applied to what the O/P is proposing?

motorguy

Sunny29 wrote: »

I'm sure there are lots of questions like this. I need £15,000 to set up my business.

I will remain in full-time employment until the business starts showing a profit (a modest one in year 2)

Surely your business model is along the lines of buy a pallet / lorryload of goods, sell, repeat. How come its not making a profit until year 2?

pitkin2020

pgilc1 wrote: »

Surely your business model is along the lines of buy a pallet / lorryload of goods, sell, repeat. How come its not making a profit until year 2?

i'm guessing they are aiming at buying 1 lorry to begin with @ roughly 15k, and then using any profit to buy another or two until they get to the stage where they have a warehouse full paying a lot of money per month to hold a lot ££££ stock. Just a guess.

motorguy

pitkin2020 wrote: »

i'm guessing they are aiming at buying 1 lorry to begin with @ roughly 15k, and then using any profit to buy another or two until they get to the stage where they have a warehouse full paying a lot of money per month to hold a lot ££££ stock. Just a guess.

Simple answer then - buy a pallet at a time to get started.

hermum

A lot of the catalogue companies now have outlets on ebay. What gets sold by the pallet-lorry load, could be the absolute dregs.