How to start up business

Flyonthewall

I have an idea for business, but I need stock and a shop. I can't afford this. I don't have any debt and never have, but I don't work and I don't own any property or anything so I can't imagine a bank would give me a loan.

How can I set up my own business with no money?

Thanks.

Wywth

Flyonthewall wrote: »

I have an idea for business, but I need stock and a shop. I can't afford this. I don't have any debt and never have, but I don't work and I don't own any property or anything so I can't imagine a bank would give me a loan.

How can I set up my own business with no money?

Thanks.

Why do you need a shop to start with?

Start with a few items of stock that you can afford to buy and try selling them online or at a market stall/boot sale.

Hopefully you'll prove you have a genuine business plan and make some money. Invest the profit in more stock, and one day you may eventually get to own your own Harrods.

Flyonthewall

Wywth wrote: »

Why do you need a shop to start with?

Start with a few items of stock that you can afford to buy and try selling them online or at a market stall/boot sale.

Hopefully you'll prove you have a genuine business plan and make some money. Invest the profit in more stock, and one day you may eventually get to own your own Harrods.

Well first of all, I have nowhere I could store any stock. Second, I wouldn't really be making any money selling online, especially after fees (and costs of running my own website if I were to create one). Third, there's quite a bit of competition online whereas in my local area there is far less.

If I had a shop I'd get sales that way and it would be worth having my own site and selling a few things through ebay/Amazon, but it's not really worth just selling online.

My local carboots don't like traders, but assuming I did set up a carboot I'm not sure I'd sell enough to cover the selling charge.

motorguy

Flyonthewall wrote: »

Well first of all, I have nowhere I could store any stock. Second, I wouldn't really be making any money selling online, especially after fees (and costs of running my own website if I were to create one). Third, there's quite a bit of competition online whereas in my local area there is far less.

If I had a shop I'd get sales that way and it would be worth having my own site and selling a few things through ebay/Amazon, but it's not really worth just selling online.

My local carboots don't like traders, but assuming I did set up a carboot I'm not sure I'd sell enough to cover the selling charge.

If its readily available cheap on ebay and amazon, i'd be very wary about trying to start a bricks and mortar shop to sell the same stuff only much more expensively.


There is absolutely no loyalty to local businesses from the general public.

Flyonthewall

motorguy wrote: »

If its readily available cheap on ebay and amazon, i'd be very wary about trying to start a bricks and mortar shop to sell the same stuff only much more expensively.


There is absolutely no loyalty to local businesses from the general public.

It's not cheap online. It's not cheap buying it wholesale from what I've found so far. I wouldn't be selling it for any more if I had it in a shop, possibly a little less. It's the cost of postage and fees that eats into any possible profit selling online.

jm2926

Flyonthewall wrote: »

It's not cheap online. It's not cheap buying it wholesale from what I've found so far. I wouldn't be selling it for any more if I had it in a shop, possibly a little less. It's the cost of postage and fees that eats into any possible profit selling online.

Shops have rent, rates, insurances, water,electricity, phone, pdq terminal, fitting out/signage, display stock, etc etc. how many items would you have to sell per week to meet these costs from your saved postage costs?

motorguy

jm2926 wrote: »

Shops have rent, rates, insurances, water,electricity, phone, pdq terminal, fitting out/signage, display stock, etc etc. how many items would you have to sell per week to meet these costs from your saved postage costs?

+1

Postage is peanuts compared to the costs of a bricks and mortar shop.

Costs will easily come to £1500 a month. Add to that a wage of say, £1500 net, which is £2000 gross, and you're up to £3500. Add in £500 to cover you for the lean months and / or expansion and you're up to £4000 a month.

If your product has a 25% net profit you need to be selling £16,000 of them every month. Which means you're into the realms of VAT registration and losing 1/6th of your profit margin, so you'll need to be clearing nearer £5000 a month by the time you budget in for VAT.

So thats £20,000 a month every month.

And i never factored in any sort of loan repayment to cover the startup costs.

Can your local town really support buying £20,000 a month of your product? And if so, why isnt someone doing it already?

motorguy

Flyonthewall wrote: »

It's not cheap online. It's not cheap buying it wholesale from what I've found so far. I wouldn't be selling it for any more if I had it in a shop, possibly a little less. It's the cost of postage and fees that eats into any possible profit selling online.

Sorry, just to clarify here, you think you'll be able to undercut online sellers, by opening a retail unit??? :eek:

To be honest, i think you're thinking about this all wrong.

Yes, ebay and amazon can be expensive, but many big sellers accept the narrower profit margin to achieve both volume AND to drive customers to their own (fee free) website.

Flyonthewall

jm2926 wrote: »

Shops have rent, rates, insurances, water,electricity, phone, pdq terminal, fitting out/signage, display stock, etc etc. how many items would you have to sell per week to meet these costs from your saved postage costs?

I know. I can't possibly say how much them costs would be to know the answer to that. However, the postage costs are stupidly high.

Ok, I got one item that I wrote down that I was looking at selling and I'd have other similar items. I could get it for £11.99 (that may not include postage). Online (ebay) it sells for £16.99, I think with postage costs. But it would cost me at least £5 to post. So with fees on top I'd be paying to sell that item.

In a shop I'd make a profit, especially if the buyer saw something else to buy as well. Can't say how many I'd sell or how many I'd need to sell to cover costs, but with that and other things at least I'd be making a profit on the items. I've got more hope of making a profit overall in a shop than selling online at a loss.

Flyonthewall

motorguy wrote: »

Sorry, just to clarify here, you think you'll be able to undercut online sellers, by opening a retail unit??? :eek:

To be honest, i think you're thinking about this all wrong.

Yes, ebay and amazon can be expensive, but many big sellers accept the narrower profit margin to achieve both volume AND to drive customers to their own (fee free) website.

Yes. Probably more match than undercut. But it's only because of the type of items I want to sell and not having to post it. They're awkward items to post in most cases.

motorguy

Flyonthewall wrote: »

In a shop I'd make a profit, especially if the buyer saw something else to buy as well. Can't say how many I'd sell or how many I'd need to sell to cover costs, but with that and other things at least I'd be making a profit on the items. I've got more hope of making a profit overall in a shop than selling online at a loss.

No you wouldnt.

Profit = number of items sold * (Selling price - purchase price) - all costs

not

Profit = Selling price - purchase price.

You're not making a profit if you sell one item in a shop for £5 more than you paid for it, but your overheads are £1000 each week.

You could do some very simple calculations around how many of these widgets you need to sell but it sounds like a lot.

If i were you, i'd be more interested in understanding how your online competitors are making a profit on their items, ie, where are they getting them so much cheaper than you?

I cant emphasise enough how bad an idea opening a retail unit is. You only have to look at your local high street and market trends to see that.

You're aiming to buck that trend with

(a) no experience
(b) no money
(c) a line of items that your internet rivals are clearly buying cheaper?

I heard this recently that sums up high street retail perfectly - "opening a retail unit is a great way to make a small fortune - out of a large one"