New business collywobbles(12 Posts)
I'm in the planning stages for a new business venture that I'm really enthusiastic about starting. The only hitch is it will cost somewhere between £3-5k in start up costs and I would have to get a business loan to add to all the rest of my debt at a time when I'm still trying to pay it all off so I can get out of this sodding rental trap.
I have meeting with Business Wales to discuss the plan in a few weeks, but I'm really unsure about the risk of this... I'm getting great feedback in principle that the service would be used and I've been self employed for 15 odd years anyway so that doesn't worry me, but I've never taken a financial risk in business before (I teach, so any overheads are covered as money comes in to pay for them)
Any thoughts on this? The business is an online tutoring business, and I do have a USP, and it's an area I'm already extremely skilled in, so that's no worry. It's just the financial stuff!
Do you have a realistic business plan?
I'm not sure yet; that's what I'll find out at the meeting. I've gone through as much of the finances as I can, and I know my subject inside out. There's not much to the actual running if the business that isn't covered in designing a really good website, and that's what's going to cost me the many pennies. I've worked out the cost of the different packages and rough profit (not including web costs because I haven't a clue about them yet) but most costs will be absorbed by my current business anyway (electricity, heating, etc) and printing costs are factored in.
Oh I forgot to mention; I looked at business plan templates, but a lot of them are irrelevant (a lot of employee stuff or hiring premises/buying stock etc) hence why I'm not sure if what I have is a 'business plan'... I've done planning and organising, and I'm sure I've got more to do, I'm not sure which bits though! Bus Wales will help with that I hope
Have you put anything in the plan about paying the loan back?
Might sound a bit obvs but apparently a lot of people fail to do this when they do their forecasts
Wrote down every last cost you can think of including loan repayments. If the two businesses are going to run under the same umbrella fine, but if they are going to be separate allocate costs correctly as allowing one business to 'sub' of another is poor practice. Then take a conservative guess at income to give you your gross profit figure.
If you are going to run them separately it may be worth taking accountancy advice because there maybe tax smart ways of doing this.
I have done, and it's good to know I'm on the right lines! I was even slightly annoyed with my inability to work out detailed compound interest on a 6% 5year loan, so maybe I'm ahead of the game here!
I think this is partly where I'm getting confused, lonecat, my two businesses are very similar (and to make matters more complex, I'm employed to do the same stuff that i also do under a self employed umbrella, which is the same stuff that I will be doing in this new venture but via a different route (online). To complicate it even more, I occasionally do the new idea online anyway, so I already have all the resources (printer, books, tutoring resources etc) but just not the actual website. And even more weird, I already have a website for my existing business that I will be selling part of this new business under in a month or so to get the ball rolling (one small isolated section of this new venture is dead easy to set up and can be attached to my present business) Apologies for confusion!!
I've done as much costings as I think I need, but I haven't the faintest idea about web running costs so until I know more about the startup, I can't go to a web designer to check running costs.
Any idea on how to get a proper estimate on market interest? I'm as sure as I can be that my idea has a market, and my students tell me that they would pay for this service if I wasn't already providing it at such a good quality (excuse the stealth boast, but this is partly why I want to do this; because I know I'm good at it!) but I'm not sure how to ensure I have cornered my market correctly before risking it all?
Do you mind telling me (however vaguely) what you need your website to do? I would be VERY surprised if it actually needs to cost as much as you think, even - or especially - if you have had quotes. Feel free to PM me.
Thanks Naan, it's an interactive tutoring site and I have a complex business plan that needs reverse engineering to a start up idea! Will PM later (am replying in teaching break) thank you!
Can you do some market research with your existing students. Create an anon survey monkey questionnaire to find out how much they would use the website and how much they would be prepared to pay.
What people will say to your face and what they will say anon can be very different. Maybe you could put a link the questionnaire in the relevant section of mumsnet to see how much take up there would be.
This would give you better idea of whether there will be good take up.
If you are selling the existing business it would be better to minimise costs through it to maximise value. Make a trading loss in the new business that is nice and tax efficient too,
Hi lonecat I hadn't twigged about the anonymity of the survey monkey surveys so thanks for that tip I have been thinking the same thing; that my students will say nice things to my face but I really want the truth, however harsh it is! Anonymous surveys is the way to go.
How does that work with putting a questionnaire on mumsnet? Is that generally allowed here?
I won't be selling the existing business; it's just me teaching. Nothing to sell
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