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Starting a little something with zero business experience.(44 Posts)
Long time member but recently NC. Just fancied a change.
In a nutshell: I have a business idea and I've looked and looked but there's currently no website dedicated to selling this particular item. (This could be good, this could also be very bad!)
I have a personal love for 'xxxx', and I ran out the other day. I thought to myself, "I know! I'll buy some of those big wholesale packs then that way I'll not run out for ages".
Then I was musing that if I bought that much in, it'd be entirely possible for me to sell some. So I looked online and, whilst there are plenty of websites that sell these things, there is no actual singular website as of yet dedicated to "all things xxxxx" housed and sold in one convenient estore. (Think along the lines of all things handkerchiefs, or all the different types of Christmas candycanes from around the world, or all different types of pretzels, or different types of enamel badges from around the world - this type of theme)
It's definitely something that many, many people use every day or nearly every day, its a very popular type of item.
I'm waffling, sorry.
So my idea is to have a website/e-shop. My items aren't bulky, so all orders will conveniently fit through the letterbox. I'd need a logo, website and packaging label designed for me. I don't need to 'make' anything, or craft anything etc, I'm looking at it simplisticly, ie fulfilling orders by taking from the wholesale pack and putting inside an envelope box and sending off. (I know I know! Don't flame me, it's way more than this!)
I've no business experience or entrepreneurial skills, so I need all the help I can get. Where can I access support? I'm approaching this as realistically as possible - I know it'll not make money for a long while and I will start small and humble.
I want to do this because I want to try my hand at something that is new territory. I want to try this because it feels exciting to. I want to try this because I want to work from home but I know my physical and mental limitations.
As of yet the only thing I've done so far is register the web domain and I've drawn up an extremely crude business plan.
I'll be financing this myself...actually, the items aren't 'that' expensive to buy wholesale (not expensive to buy and not that much to sell RRP, either). The main costs I assume are paying for the designs of the estore and logo, the cost of packaging materials, the cost of customised labels and....? What have I not considered?
I have storage space in the garage which is dark and cool and clean.
My real worry is when to register for VAT and how it'll effect my benefits once I do so. I don't know how to work acounts and I don't know how to work taxes. So this is exactly what I mean by "I need support!"
I'm almost physically housebound and I have little social media presence (Ooof I sound like a lost cause!) How do I go about market research? Or do you think it's not absolutely necessary?
The main expense will be paying for a logo and website. When should I consider looking for someone to do this?
As I've mentioned, I've a rough and crude business plan - which is really just my musings and intentions and who to target to - and no business skills. I've paid for a web domain and I have an intended name for my website once I get round to commissioning someone to design it for me. What is realistically the next step?
I have two pre school DC but I will fit as much as possible around them.
So sorry to waffle on again but I wanted to put as much relevant information as possible in my OP. Just for convenience, really.
-There are various organizations and schemes providing business mentors. Look up what's available in your area.
-first, read up on setting up a business. Knowing the basics of accounting and marketing etc will help. For example, you don't need to register for VAT until your turnover reaches a certain threshold (used to be £54k, not sure now), and you would definitely need to check with insurers about storing stock in your garage.
I can't get to grips with VAT, although I'm trying. I really am. Just come from a "The Idiots Guide to VAT" type website just now.
I definitely need to know because of things coming my way that hadn't previously even considered. I came across a wholesaler who stocks some fab items that are just what I'm looking for, but I need a VAT number and all the other business details on hand to register with them, before they'll allow me to buy. I don't know how to get around this other than registering.
I've also found a small but great range of items that are sold to our EU neighbour's. I'd love to import from Belgium, the Netherlands etc. I've a feeling this complicates things regarding import charges, taxes, fees - whatever the case may be.
Thank you for your reply.
The thing that leaps out to me is processing time - if you only make 1p profit to resell each item then you have to sell, process, package and post about a thousand per hour all day to cover your costs and pay yourself a wage for doing it (this doesn't include a wage for time spent sourcing) Obviously you'd markup at more than 1p per unit, but you see the problem.
I hear you and I actually don't expect a huge mark up or return on my sales. Yes yes - seeing a noticable return of money will only come with a high-ish volume of sales.
However I'll do things to encourage returning customers like initiating a reward scheme where sharing links earns points, customer feedback earns points, and points mean a £5 voucher IYSWIM. I must work out a postage offer - along the lines of spend £10 and over for free postage.
Spend £15 for free postage plus a free gift or free sample. Something like this.
I hope my advantage with this site is the convenience of having all products sourced and onto one site. This includes all the usual UK stock and includes the novelty and niche ranges from EU countries and even further afield if they're right enough. I assume this'll mean that if customers try something from me that they realise they really like, they'd need to return to the site to purchase more...or go to great lengths to buy their own off their own resources.
I even fancy selling those cream coloured cheap cotton eco canvas bags with the stand out logo on it.
It'll be a casual, lighthearted e-store as IMO these items are not taken too seriously but are certainly enjoyable and even necessary depending on the need and situation.
All items will cost between £1 - £6 max I reckon already.
I need to work out what I should be looking into next. What I need to prioritize and why it could all go wrong.
(Well if it did at least I'd thoroughly enjoy slowly working my way through all that lovely product. Silver lining and all that, I suppose)
How many of these items would you expect any one single person to buy?
How many clients do you actually need to make this business viable and where are you going to find them?
For example, I like knitting. Sadly, I've seen too many people who also love knitting, set up yarn shops and packed up within a year because they couldn't get enough customers.
I think studying the market and making a projection of sales should be a very important part of your plan
Then you need to start building your business in Instagram and places like that. Marketing it to the right people and making it desirable.
Think of someone like Kemi Telford and her beautiful dresses. Not a day goes by when she doesn't publish something. Her buyers tag her while modelling the dresses etc. It looks like her business is really growing. Maybe get inspiration from someone like that
Really good points. Noted. I don't know the answer to almost all you've brought up. .I'm unsure how to go about getting the answers.
On that note, I am awaiting a call back from a service that provides business mentoring, so I fully expect these kind points and all the jargon to be addressed.
Thank you for your input.
I think you sound a bit 'green' and would benefit from doing some courses in social media, marketing, and business.
How much money do you have to invest?
How much do you need to get started and buy the stock?
Importantly, how much do you need to make a year? Sometimes it can be good to work backwards.
A business plan isn't really ideas and what you intend to do, it's the figures.
You wouldn’t register for VAT for a bit, you need to be earning a pretty decent amount of money to have to register. It’s about £80k, I believe.
You would have to register as self employed. There’s no leeway on this.
In terms of initial costs, can you teach yourself to build a website? That’ll be a cost, otherwise... good websites don’t tend to come cheap. You’ll also need a marketing plan.
From a market research perspective, it’s definitely worth finding out what type of people use the product, how often, where they get it from, how much they pay, etc.
The big thing for you is going to be social media and marketing your product. You need to build up a "community" of followers who follow you for reasons other than (but including) your product.
Partly this is genuine 'nous' and partly finding out techniques to engage people in a very genuine way.
Don't be worrying about VAT now, the threshold is £85k turnover before you need to do it. Being unregistered means you will have to pay VAT on purchases (ie you won't be able to claim it back or get a VAT-free price for supplies and services); when/if you register, you will then automatically give 20% of turnover from the product to HMRC. If you envisage reaching the threshold in the next couple of years, adjust your notional prices now so that you won't shock your customer base by raising prices when you do register.
How often do your customers typically replenish supplies of this thing? Is it often enough that repeat business is going to figure in your plan, or is it less often, therefore you need a bigger market straight away?
Looking ahead six months, a year, two years: how can you grow or branch out? Customers are easily diverted to new things, you want it to be you who is supplying those things!
There's a course for people on benefits looking to start a business I think?
Here's a question: why would people buy from you, rather than anywhere else? Where do people currently buy these items? Supermarkets, Amazon? Why would they go to you instead?
I'm really struggling to see the gap in the marketplace you're going to fill here. Can you give an example of a similar set up?
What age are you? Just wondering if the Prince's Trust could help you set up the business but they have an upper age limit.
Thinking about this more, it worries me that you aren't wanting to make more out of it.
Regardless of how small, a business where you sell items direct is still a lot of hard work.
It's loads of time and creativity to build and maintain your audience. You want to be selling things daily, but can you get to a post office daily? People expect things basically within three days at a maximum and they simply don't read what you'd write on your website about postage times.
People also complain a lot - not at first but after a while. You use the "friendly" online relationship to sell to them but it comes with the downside that you are then fair game for "friendly" emails giving you pointers about how to run your business better, or truly annoying changes to orders, requests for charity, offloading their personal problems, that sort of thing.
It's hard work and I'd encourage you not to undersell yourself from the beginning: make sure you make a bit of a wage and aim to make that a proper wage. Otherwise it's just you giving a service to people for very little.
Just to further add to what others have said, you also need to inform your landlord or mortgage company that you are running a business from home and your home insurer.
Also, do not copy another companies logo onto a bag and sell it. It's illegal.
Running a business is very hard and if you are only going for a tiny reward you won't do it for long as it won't be worth it. There are a lot of days I tell myself "think of the money" because it's the only thing keeping me going when it's really stressful.
A word of caution... you mention contacting a business mentor. Please make sure they are legit and not a self-professed "business coach/mentor" who is actually an MLM (aka pyramid scheme) "business owner" as they are rife in some areas.
I work with online retailers and I also have an online store myself.
Would you consider selling your product on a marketplace first? Like etsy / not on the high street etc - because it will take a lot of work to build a website and you have no way of driving traffic there.
You have a basic logo and website designed won't be your biggest costs - you could get them done for £500-£1000. I think your biggest cost would be SEO and digital marketing. How will people find your website if they search for the item they want? You need to set up Google analytics so you can measure traffic.
Building a social media presence is a lot of work. You will need to take brilliant pictures of your products and have interesting things to talk about on it - it's a daily job across instagram and Facebook. I'd suggest you would need to do sponsored posts to grow your following.
You need an email provider so when people purchase you can send them email confirmation and updates on their parcel. Mailchimp have a free package but you will need to know how to do this. Also if you have no marketing or design experience you will also need someone to build you templates.
Lots of companies do branded packaging - this isn't a huge expense but it is another expense.
Will you get a relationship with parcel carriers or a brokerage system like parcel monkey? How will you ship the items and manage returns?
How will you take payment on your website? Will you offer PayPal? This means they take a cut of your profit.
Doing taxes is relatively easy you need to log all incoming and outgoing. You would need to hit £87k in a 12 month period to hit vat threshold so I don't think this will be an issue for you.
I don't know about business support but you need to know about all the areas I mentioned.
It seems to me you have only got as far as thinking about how you will sell your product ie online. That is the easy bit. The (very) difficult bit is creating awareness and growing your customer base. How will people know about your company and why would they buy from you rather than a well-known and reliable alternative? Marketing shouldn't be a secondary issue. Your company will die without it.
I also forgot to write you will need a label printer for their addresses plus a dispatch note which explains what to do if they need to return etc.
Yikes. I really am out of my depth.
It seems to me you have only got as far as thinking about how you will sell your product ie online. A true observation, I think.
I did intend to start advertising on Instagram first and then slowly branch out to another platform - Instagram seems the least daunting. I saw an ad for a new UK Pick and Mix business. 15% off new orders. their Instagram page is full of meme pictures but written in relevance to their sweets etc. I think I could start at this level of advertising?
I found a good website which had loads of free downloadable resources and information written so simply that even an out of touch like me was able to digest a little bit. It prompted me to dig a little deeper into the how's and why's of what I'd like to do and I came up with info that actually, my original idea would most likely flop. It did shine a light on something in the same vein as my original idea but steers in a bit of a different direction that I hadn't considered before and now I'm wondering if I could run with it instead. I need to keep digging.
I am so sorry to sound so cryptic, it must be bloody eye rolling all this mock secrecy - but I'm a bit shy to say what it is and I can't think of an alternative parallel as of yet.
I'm 37. What's the age cap?
I've sold a leeeeetle bit on EBay through the years. I've managed returns via PayPal - this wouldn't be too a disimilar process if I had my own website, no?
I was going to pay for a website. Admittedly I've wondered how I'd upload photos of new items to the site. Do I get the keys to the site so I am in control of it or must I refer back to the designer and pay to have it updated each time?
I meant my own logo on merchandise.
I have to work out how much it'll cost to start it all up, PP is right that I have to work backwards and think of the figures. I know I am approaching this as a PT venture, so money wise -PT wages type of figure/approach.
From a market research perspective, it’s definitely worth finding out what type of people use the product, how often, where they get it from, how much they pay, etc. I can see what the going price is by looking at other health sites and seeing what it sells for. Is this kind of what you mean?
Must go because the kids need me. Will be back later.
Thank you all so much because you are so knowledgeable and I am so GREEN!
To make a profit out of selling low value products you need to make a huge number of sales to cover all your administration costs. £10,000 of sales would equate to 2000 items at £5 or 10,000 items of £1. That is not the same as profit which may be a small fraction of that number.
If you are not VAT registered it means you don't charge VAT on the sales but you still have to pay VAT on your purchases but can't claim it back. How much will you pay for the items you are selling? What is the mark-up?
Small businesses tend to be more successful selling high value items as they need less customers to make the same amount of money. That is why supermarkets are successful and many corner shops go bust.
I think you need to get some good financial advice before you go too far with this!
I think an important thing to remember us you are not in the business of widgets; you are in the business of SELLING and it happens to be widgets. You can be passionate about your product, but what matters is how many you sell and how much you make. I second the poster who suggested you do a course in digital marketing, SEO, e-tailing, etc. You can outsource lots (eg using a selling platform, getting a company to host and update your site, accountant, social media, etc), but each consumes a % of your turnover. And it sounds like a very low cost item requiring large volume sales. Who will fulfil these? Will you carry £££ of stock in your home? Can you export to outside the UK, post Brexit? How will you cut through to your market? What if a bigger company moves into your niche? Best of luck / I really hope you make it, and it is a good idea to see if there is a local enterprise group/chamber of commerce/entrepreneur hub (real life or online) to support you.
I had a look on etsy as per PP suggestion and no one sells it at all. Mind you my impression of etsy is for craft items, special keepsakes and all things informal and friendly and personal..My things are consumable, so would this be the right platform for the products? Maybe Ebay could be better. I think I could personalise the ebay store to suit, more than a potential etsy one.
Have to ponder more on the matter.
I was thinking about how best to contact the company's that make these items that I intended to sell on. It's their own product they make so I'd go straight to them. A friendly email? A phone call? Must I have letterheads/my business company name/be registered as self employed etc etc. I'm feeling a titchy bit overwhelmed and confused in the same vein of Chicken or the Egg dilemma, I'm not sure what I should best do in getting the best order to this.
Post is a bit garbled. Can't breathe: bad cold and the children are playing right next to me.
No one got back to me, annoyingly for me.
I think an important thing to remember us you are not in the business of widgets; you are in the business of SELLING and it happens to be widgets.
I'm sorry. I've googled what widgets mean and I'm still none the wiser as to your sentence here - please take pity on a business simpleton and elaborate further!
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