Starting a new business - need capital

stephthechosenone

Hi all!
I'm very excited to announce I am starting a new business.

I am registered as a limited company, registered for VAT and I have my website and email addresses set up.
It is an online retail store and I've started purchasing stock at wholesale price from a number of vendors (with my ow personal money).
My issue now is...I don't want a dropship relationship with my vendors (I want to buy the stock outright and ship it myself in order to maintain branding, customer relationships etc), but to purchase some of the stock at large quantities is costing money that I don't have.

I need a loan/grant/anything that will allow me to make those purchases. Also for online advertising etc and I don't know where to go or how to go about it =(

A little bit about me:
I work full time as a digital marketeer for a telecommunications company, but hoping this will change once I launch my business. I put about 30% of my earnings into the business each month.

Thanks in advance for your help!

robpw2

loan? , investors ? dragons den ? apprentice ?

wouldnt it be better at first to see how sales go before buying lots of stock

00ec25

do you expect your turnover to be >£85,000 in the first 12 months? Seems mad to have registered for VAT unless your customers are wholly and exclusively VAT registered themselves as your sales price is now 20% higher than it could have been and you have added admin costs for doing VAT returns

as for sources of start up company finance, welcome to the world of expensive borrowing... what collateral (other than the stock) can you offer as security for a loan.

Commercial lenders will expect to have a director personal guarantee given the company will be the borrower and the company has no history and no credibility. Do you own any property which has enough equity in it to underwrite a loan? Lenders will look to put a charge on your house as their first port of call if they can.

soolin

I too am surprised that you registered for VAT so quickly but perhaps your market research shows that this is a niche market that is going to take off immediately and result in a large turnover from the start?

If that is the case could you not start selling now and reinvest the initial income to buy stock?

You could always try for a business loan assuming you have robust market research on your business plan, it's got to be worth a try. I hope though that you have a USP as well as good market research as this is not an obviously good time to enter a saturated online market with easily obtained 'stock'. Have you for instance a smaller set up already, perhaps an ebay or other online shop or Instagram followers that you can use to expand into your own online presence?

soolin

I just saw your previous post here:

https://forums.moneysavingexpert.com/discussion/5733212
I am a little concerned if your market research was based on a simple survey, before you allocate more money to your business perhaps see how it goes for a while?

trailingspouse

Where are you storing the stock? At home? You have, of course, informed your house insurers/landlord/mortgage provider.

And what does your business plan say about financing stock purchase?

enjoyyourshoes

Well done for starting business.

Might be worth reviewing your Business plan and cash flow forecasts to best ascertain when to move from medium purchases from wholesalers to getting your own brand and larger shipments.

Might be worth tweeting the margin to see how this impacts on cash flow and ability to bring forward this transition?

Do you not have experience of online advertising from your current position of digital marketing or source the information fro Peers, clients etc?

But try Facebook advertising PPC but make the ads specific to certain criteria and set up different landing pages on your website specifically designed for the different specificity of ads you run.

Have you spoken to accountant on how best to structure your tax affairs and allowable expenditure as Ltd Co?

motorguy

robpw2 wrote: »

loan? , investors ? dragons den ? apprentice ?

wouldnt it be better at first to see how sales go before buying lots of stock

Personal credit card might be another option.

stephthechosenone

Hi all,

Thanks so much for the speedy feedback, this is precisely what I was after.

It is a niche market I will be catering to with the website, so I'm confident things will kick off.
As for finances, I'm making small purchases for now as a means to open shop beginning of next year. I understand I will need a minimum viable product (understand how sales go etc) in order to seek additional funds for the business. I'm asking for a good place to start once I have all of that.

I found it difficult to forecast as I haven't opened the shop yet, so want to see how that goes before I do.

Also, I'm VAT registered as I registered the company with an agent who did it all for me. I can undo it of course, as you're right, it is a bit of a pain to do.

Yes, I am setting up the digital marketing plan, including targeting on FB (the best way for my target audience!)

Thanks for your help - welcome any more advice on how I ought to get started!

FatVonD

Try your local council, it varies from borough to borough but mine offer a £1,000 small business grant.

FestiveJoy

Have you tried crowd funding?

At this festive time of year, there are many people wishing to help others just like you

:xmastree::xmastree::xmastree: