How to start up business

COOLTRIKERCHICK

Flyonthewall wrote: »

Due to the target market. If they knew there was a shop they'd go there. But I can't inform people I'll be doing a (possibly) one off carboot and hope that everyone interested can make it to that place in them few hours on a specific day. Plus at carboots everyone expects everything for 5p, you don't get people haggling like that in a shop and they expect higher prices.

:rotfl::rotfl::rotfl: do you want to put a bet on that.. of coarse they do...

Every poster has given you good solid advice, but yet you just cant see it.

You have set your mind on selling x item, infact you seem to be infactuated by this item, don't open a shop... as it will be a noose around your neck, which will get tighter, and tighter, and then choke you will debt...

stick to selling your bits and pieces on the bay, but this time declare it the hmrc, run it as a little business.

Also don't forget you will have to find a bond, a months ( or 3) rent up front, public liability insurance.. you will also have to pay buildings insurance to the landlord, and with most commercial properties you will be liable for all work that's needs doing on the premises.

talking to a brick wall springs to mind

Percy1983

Flyonthewall wrote: »

True. Not easy to start though when you know the very start is likely to include a loss until you can get the word out.

This is where I am failing to see how.

Open a shop full overheads from day one, making a loss everyday until you "get the word out".

Online, buy stock put it in corner/cupboard/loft/shed, sell quickly if there is good demand making small profits, buy £100 worth of stock, turn it into £120, buy £120 worth of stock turn it into £150.......

You slowly build money up and cam show a good business model (with real demand) tot he bank and they lend you money to open shop.

I really can't see any other sensible way forward.

I will tell you a sort story of how my business started, I bought a used video camera for £50 and borrowed a secondary one form my now father in law. I filmed a school show and edited together the hard way using free software. Sold 50 copies at £3 each with material costs of £30, £120 for many hours work, bought a second camcorder.

I have been through that process many times adding more equipment, upping quality and upping prices and you get to where I am now, I turn up with over £3ks worth of equipment film from 6 angles and have a rather powerful PC with much more capable software all of which has been fully paid for out of profits... all from a £50 investment.

When I first started I had a dream but I couldn't go straight to the dream, the funny thing is the reality is now much bigger than that original dream.

paddyrg

I'm slightly less pessimistic for you myself, as you say we don't know your items that you are selling. Maybe you have found that illusive high volume high margin perishable impulse buy that isn't going to get undercut online and which you can develop and franchise your model before the copy cats turn up. You may have that marketplace disruptor. And full credit to you if you do. I'm sure you can understand why people are nervous for you, but ultimately it is your punt. If it doesn't work out, better it doesn't work out whilst you're young enough and robust enough to bounce back!

I will bet everyone on this board has had at least one great idea that's cost them dearly. But if they hadn't tried, it would still be a great idea in their minds, and they learned from the experience. Sometimes we make mistakes, sometimes we get lucky. We're all still alive and all ate a meal today, so we're already ahead.

But people here want to make sure you can avoid some of the mistakes they made, it's natural. One typical mistake I'm certain we've all made in one way or another (or if we were lucky we watched a friend make) is overcomitting too much too soon. I have become very debt averse having lost a business in the past through cashflow problems. Cash is the best asset you can have, it can be converted into rent, stock, electricity, salary, whatever. When a business starts up, there are a lot of costs you suddenly realise you had never considered. Many people model their business around the ideal they have in mind, but forget it takes time to build a business. Look how many years Amazon made a loss on every single sale in order to create a market from nowhere. Staggering.

The problem is that it is easy to go spending on printing, stickers, advertising, car decals, nice desk and phone, etc., but when the first problem hits, there just isn't the cash in the bank to make it go away. Money makes most problems go away and having on hand cash means you can jump on spot opportunities, those moments when you see a chance to nail a competitor, or even just pay for a lawyers letter, or even refunding a faulty item. If you have cash, you can seize the moment, if you don't, you have the choice of taking on expensive credit, liquidating loads of stock without margin, or missing out. Instead of business predator, you become prey, effectively. Your competitor with on hand cash could do the deal, pay off the lawyer, whatever and leave you for dust. Cash is so so important!

So, this is why people are wary that you're over committing by leasing a property if you haven't proven the product demands is there first on the markets etc. Markets are by far the cheapest way to see the product in punters hands, with massively lower risk. Massively lower. Sounds like you're not cash rich right now, so you are going to need to be canny and not commit to long term costs. There are not really any grants for starting in business, the point being that businesses are supposed to be commercially viable, and if they are then you can attract a backer for cash flow. Get out there with a fistful of notes, test the idea on a market stall for a day. Do people like it? Do they take your mobile number and actually call it for more sales? Do people have any useful suggestions of where it would be good to try selling? If it goes well, become a market regular and then take the shop, if it doesn't you can cut and run at any stage without a a wily commercial leaseholder hitting you up with a fifty grand bill for repairs/whatever. The market stall you can try out for a few hundred quid point, you can't even afford the commercial property lawyer for a shop at that price.

paddyrg

Ps - example of cash being King - a pair of first time promoters hired me because they were staging a festival. It was a nice idea for a festi, and in their plans it was a moneyspinner as they also took 100% of the bars and main catering franchise. 5k capacity, sold about 10%, but they reckoned with the food and bars they could still minimise their losses... But the bills all arrived before showday, and people in this industry get jumpy easily, they have all been burned before. Cashflow meant a couple of essential bills were not going to get covered, the promoters borrowed from everywhere possible, even Wonga. It was getting silly. Eventually, some core kit wasn't delivered, festival cancelled, they didn't get 500 people of food and drink revenue. The guy who had retired had to mortgage his house and go back to work, the other one lost his house. They've been paying me what I was owed in dribs and drabs, a few hundred notes at a time, when I can catch them. The festi was a few years ago now, they're both still paying off debts. Cashflow killed them. They overstretched. Don't overstretch!!

DKLS

Flyonthewall wrote: »

Well I know roughly what items I want, the area I live in, what competition I have and so on. But I'd rather not discuss it all here.

My question was simply how to get a shop when I have no money. Any grants, loans or companies that can help?

Obviously, if they wanted a business plan and to prove it would work I could sort something and research further, but if I've no hope whatsoever of getting a shop because there's no help out there then I know that my idea just won't work as I'm currently thinking.

I do know people who have built successful retail business's all started with no assets other than a credit card but it aint easy at all and does leave you vulnerable to early mistakes. Pick the wrong stock, suffer crappy weather for a couple of months and it could be game over.

A business plan isnt just a document you create when your looking for funding, it should be your plan of how your business is going to run and turn a profit and it should be a 'live' and adaptable plan.

I dont mean to put you off, but to avoid the many sme failures you need a solid model and it may not be this idea that works but keep at it. What you dont want to do is to be working like a dog for little return.

It may be worth checking out Pop up shops which could help minimise risks and test your model out with the public, I am seeing them a lot at a local shopping centre that was left half empty after a new shopping centre opened close by and the big chains jumped.

Some are more successful than others the Arts/Craft coop thing and a young fashion designer are doing well, but the 3 traditional sweet shops failed within 3 months.

I have many business ideas at the moment about 95% of them I will dismiss as not having a viable business case.

Flyonthewall

COOLTRIKERCHICK wrote: »

:rotfl::rotfl::rotfl: do you want to put a bet on that.. of coarse they do...

Every poster has given you good solid advice, but yet you just cant see it.

You have set your mind on selling x item, infact you seem to be infactuated by this item, don't open a shop... as it will be a noose around your neck, which will get tighter, and tighter, and then choke you will debt...

stick to selling your bits and pieces on the bay, but this time declare it the hmrc, run it as a little business.

Also don't forget you will have to find a bond, a months ( or 3) rent up front, public liability insurance.. you will also have to pay buildings insurance to the landlord, and with most commercial properties you will be liable for all work that's needs doing on the premises.

talking to a brick wall springs to mind

A bet on what?

I understand what everyone is saying and if it were any other item I'd agree, but as you've no idea what items I wish to sell or the area I live in you can't possibly say if I have any chance of doing well.

Any items I've got to sell would be private sales. It would be daft to make that into a business and be taxed on items I shouldn't be. To buy more items requires finding things cheap, having space to store them (which I don't) and being able to sell them for more, but just selling odd bits I doubt I'd ever get enough to run a business. I already thought about trying it, but you could spend hours just trying to get one item, nevermind the trouble of loads of items and selling each one.

A brick wall? That's rather rude in my opinion. I've listened to what people I have to say, I thank them for all the advice and some things I will consider (e.g. the market), but as much as I'd love to just sell everything online I haven't yet thought of a way to do that and make a profit for what I wish to sell.

Before the Internet people managed to sell items perfectly well and there's still plenty of people who don't use the Internet or who don't like buying online. There are options outside of the Internet.

Flyonthewall

DKLS wrote: »

I do know people who have built successful retail business's all started with no assets other than a credit card but it aint easy at all and does leave you vulnerable to early mistakes. Pick the wrong stock, suffer crappy weather for a couple of months and it could be game over.

A business plan isnt just a document you create when your looking for funding, it should be your plan of how your business is going to run and turn a profit and it should be a 'live' and adaptable plan.

I dont mean to put you off, but to avoid the many sme failures you need a solid model and it may not be this idea that works but keep at it. What you dont want to do is to be working like a dog for little return.

It may be worth checking out Pop up shops which could help minimise risks and test your model out with the public, I am seeing them a lot at a local shopping centre that was left half empty after a new shopping centre opened close by and the big chains jumped.

Some are more successful than others the Arts/Craft coop thing and a young fashion designer are doing well, but the 3 traditional sweet shops failed within 3 months.

I have many business ideas at the moment about 95% of them I will dismiss as not having a viable business case.

Thanks. It doesn't put me off- business ideas need to be thought through and there is a lot to consider.

I've had a number of business ideas, but part way through writing out research and planning each step I keep getting to the aww, no moment where I realise there's one thing that means my idea isn't possible.

Some aren't possible at all, others might be possible for other people, but either way they don't work for me.

This one so far works up until the point of I can't work out how I could possibly sell the items for a profit online and I haven't the funds for a shop. After that, I may have other problems that stop it or require more research or change in plans but without a place to sell it's pointless going any further lol.

I have seen shops in my area come and go, but I can't say I've seen any pattern in the types of shops. There have recently been more sweet shops opened, but so far they seem to be doing alright.

Percy1983

Are we talking something big and rare, I am going to go with classic cars, yes if you get good stock and have a good eye for it you would attract people from up and down the country and profits could ve good, as you say potage is impossible.

But whsat would stop me listing said cars on ebay as collection only?

Flyonthewall

Percy1983 wrote: »

Are we talking something big and rare, I am going to go with classic cars, yes if you get good stock and have a good eye for it you would attract people from up and down the country and profits could ve good, as you say potage is impossible.

But whsat would stop me listing said cars on ebay as collection only?

Nah, but I like that idea lol. I don't know enough about cars though.

It's not exactly something rare, more collectable, but some are far harder to get hold of than others and they vary in size. Although, that's for new items. I guess there may be some old rare items out there, but I highly doubt I'd ever find any of them.

DKLS

Flyonthewall wrote: »

Thanks. It doesn't put me off- business ideas need to be thought through and there is a lot to consider.

I've had a number of business ideas, but part way through writing out research and planning each step I keep getting to the aww, no moment where I realise there's one thing that means my idea isn't possible.

Some aren't possible at all, others might be possible for other people, but either way they don't work for me.

This one so far works up until the point of I can't work out how I could possibly sell the items for a profit online and I haven't the funds for a shop. After that, I may have other problems that stop it or require more research or change in plans but without a place to sell it's pointless going any further lol.

I have seen shops in my area come and go, but I can't say I've seen any pattern in the types of shops. There have recently been more sweet shops opened, but so far they seem to be doing alright.

Its not just small businesses that need to have a viable model, earlier this year I was working at a big corporate, and I attended a presentation of a new product by my American colleagues, they demo'ed an innovative and whizzy product that would "revolutionise the sector and sell like hot cakes."

They then showed their financial model and revenue expectations, after a quick look at their model I discovered a flaw and tentatively raised this.

With 20 odd directors in the room scowling at me plus directors from EMEA and APAC on video conference I pointed out that they had missed that we charge VAT in the UK, and the model wasn't viable any more.

They had already invested 500k in the project and it was canned there and then as it wouldnt meet the revenue expectations of the business.

It made me popular with the UK Managing Director but a few directors from the US side didn't appreciate my input

Keep working your model until it works and pays.