Opening own shop..

[DSM]

I'm thinking of a massive career change, and have been looking and applying for things but nothing that excites me. So, I think I'd like to open my own shop.

I have a niche market in which I have reasonable knowledge, and a void in my city (there are no shops dedicated to this field). It is really quite niche, though I know of a few other shops in other cities, and there is a definite growing market for it here.

However.. I don't know where to start. Would I get finance? I have no capital as we are renters, and no savings. Is this just a no-go without some financial input?

How does this work?

I literally have no clue so was hoping for some help.. Sorry to be so basic! I've tried googling but there is so much mixed advice I am feeling a bit overwhelmed.

I'm in Scotland, in case it matters.

Start with the Business Link website, it's a government agency, so impartial. I don't know if Scotland has a separate scheme. They have lots of info on the site and used to (haven't looked at it all in ages) give free face to face meetings too and have link ups with local solicitor and accountancy firms, who would give free 30 mins advice sessions too.

Thank you! I will look into that.

Watching with interest. I have found a gap in the market where I live too. We are both currently unemployed and have no capital. So Im curious as to what funding would be available. The set up costs would be very high.

I've tried the business link website but am not getting much of any use

wannabe I know that people have started businesses with nothing, you hear of it all the time. But how?! How does it work? Can I find an investor, and where? Will I get a business loan?

Sorry those questions are rhetorical.. I don't expect you to answer!

Most things I find tend to be there to help young people. It's frustrating, there is even a grant available for people on JSA. But nothing I can find that might help me..

The grant on JSA really wouldnt help us. We probably are eligible, but its only £1000 and then the weekly allowance is £50 per week for 6 weeks. Im not sure what business would start on those funds and make a profit so early!

I have all the same questions. Its frustrating.

Oh really? Who can start a business on that?!

Hopefully someone will come along and help us soon

There must be loads of MNers who have their own shops?

I have another, probably very stupid question.

How does one make any money?

I can't see how to put enough of a mark up on the goods I would be selling to cover their cost, rent and rates, and then actually have a profit at the end? I'd have to charge loads extra for the products, and then surely people would just buy online instead?

I guess that if you have to put the goods out of peoples price range its not a viable business.

Do you have a spare room? Could you set up an online business from home? Cut out the premises costs?

Then you would have cost of a web page but I would imagine it would cost a lot less.

Could you start it as a internet business and do markets and car boots.

I know tescos started as a f&v market stall and look where they are now.

Couldn't do markets or car boots (it's catering to a very niche market) but could do online?

How would one go about that? Start a website, buy a bunch of stock? How do you get 'contacts' for bulk buying something? I guess just contact the manufacturers.

wannabe it's not that I'd need to put the goods out of people's price range, but if I were to make any significant money, I'd have to price them way high above what they cost online? Or does bulk buying get you that much of a discount that I'd make a good profit?

I have no idea,

I would love my own shop though, I know exactly how I want it but I don't think it would make a profit or be very busy.

Depends what it is you are trying to sell - you will have a lot of capital tied up in stock?

Well bulk buys certainly give you discounts.

Personally, I have bought some "niche" things recently and preferred to go into a shop even though I know they are cheaper online.

Have you done a business plan? I have three different ones going on in my head. Really need to get them on paper. But a business plan should help you decide if an idea is viable or not.

And it seems to me to be quite easy to get a contract with a wholesaler. Its finding a good one thats the issue!

You can speak to Business Link if their website isn't of help. You have to book a phone appt.

It depends on what your niche is.

If it really is niche, then start small - if it's making something, then buy some of the materials and make some things. get a website (one that you can retail on) and a facebook page, and twitter account.

make some things - take them to specialist fairs and farmers' markets.

start by putting everything you do on facebook and get friends to "like" your page, and then also get them to recommend you to other people.
with small businesses, the best way is often word of mouth.
also, "like" as many pages as you can that are small businesses- even if they're not the same, and any local pages (as your business, not as you) - local pages because they can get you "known" - if you can run workshops of events where you give free stuff as a prize, maybe - then they will put you on their page.

I run a shop and found it very hard to do online, but that's because I sell books and they're not niche at all , but I know friends who make really cool stuff and they do a lot of work through facebook and online because of what they do.

Could you PM me and tell me what it is you're going to be doing?
I will link you to the facebook pages and websites of the people I know that are doing customs etc.

For stock, presumably you know what it is that you want to stock, right? So let's just say it's ostrich eggs. You contact an ostrich egg farm and ask them for their trade price, minimum order & shipping. Bear in mind that you will be paying VAT on top of this price (but not paying VAT out of your retail price for a while). You just contact the manufacturer direct for whatever it is and ask for a trade account. Bear in mind that some manufacturers will turn down online businesses because of overexposure. Other big manufacturers will have higher minimum orders than you can afford. If the min is more than £350 or £500, you can't afford it. Find another supplier.

Visit the Spring Fair in Birmingham (next weekend?) - EVERYTHING is there. All the things.

The standard markup is about 2.5. So if you see a vase in a shop for £25 that means that the shop owner paid £10 for it.

For funding, explore www.kickstarter.com and if your business proposition is really viable (although I suggest you first do a lot more research than your OP implies you have, because you will need a hardcore business plan), Funding Circle. An unsecured loan from the bank will cost you 12.7% or more but Funding Circle is more like 9%. Then there is also the Angel Investment Network.

If you want an ecommerce website you need Magento Go. Honestly - don't waste your time looking at alternatives to Magento Go. It's $25USD a month and it's BRILLIANT. Then go to People Per Hour to find an ecommerce website designer who won't charge you £2k to get you up and running (they'll all be able to use Magento). Find someone to design you a logo (PPH again), someone to design your site, and someone to build it (maybe all one person if you're lucky). An agency will charge about £4k for this but with freelancers you can do much, much better.

notyoynaanbread.
good advice.
re: mark up. it depends on the product.a lot of prodycts don't have such a high mark up.
books are nearer 40% and some toys etc are only just 50@% which lessens if yoy're adding vat.if you're a small business you're likely to get an even smaller margin than that especially if you byy minimum quantity from your supplier.
if you're making tge item to sell then you could reasonably expect to make a markup of a very small amount until you are dealing in much bigger quantities.

for ecommerce website I would recommend somewhere like webeden because it costs avout £60 a year for a site you can basically design yourself. or usetheir inbuilt templates. it's very easyy to use and mobile friendly. you alsoget a domain name included in the price. you can have a free trial too but you can't set up ecommerce on the trial

2k for a logo?? and website?? I wouldn't.
mylogo was designed by my signwriter and it cost £400 for the design and the sign itself and they gave me a file for using to reproduce my logo wherever I needed it. I think the logo design was about 80qyid.

You would have to come up with a good business pan.

So write down monthly cost ( rent of site, bills for site, salary for possible employee, rent of cash register etc.).

Then see how much you would have to sell of your product to break even ( e.g. If your costs are 2000 a month, you would have to make a profit of £2000 just to break even. To make a profit of £2000, say your margin is 20%, ( so you buy your product for £10 and sell it for £12) you would have to sell 1000 units. This would mean a turnover of £12,000 of which £2000 is profit.

You need to be able to expand to go from breaking even to eventually earning enough to pay yourself a salary too!

Also, you will need sufficient cashflow to buy your products wolesale ( in myexample you would need £10,000).

You also need to factor in VAT etc.

Basically, you need to do your sums, do market research and then present the business plan to a bank. If the plan seems sound they may be happy to invest ( lend you money). They may well expect you to put in money of your own too.

You need to know how much you can realistically expect to sell. too many people start shops with unrealistic expectations.

nickelbabe - just to clarify, I was saying to find someone who wont charge you 2k. When I started, I spent unholy amounts on my branding (which is admittedly great) because I didn't know you could mix and match yourself with freelancers.

Have you ever considered trying to sell your products online, it costs a fraction of the price to set up and you can design your shop exactly how you want .
try our ecommerce website builder at www,speeda.co.uk its a great option and can actually run alongside your main shop.

Have you ever considered trying to sell your products online, it costs a fraction of the price to set up and you can design your shop exactly how you want .
try our ecommerce website builder at www.speeda.co.uk its a great option and can actually run alongside your main shop.

Naan - thank you for clarifying that :)
I still don't think you need to get someone to write the site for you when there are desktop templates that you can use.

my site looks nothing like the template I started with now, because as i got used to the programme i fiddled around with it until I liked it.

now, our church website was designed by a web designer and it's really hard to change things on it, because it's just not user friendly.

Wow - sorry I haven't checked back for a while but thanks all so much for all this great advice!

I have done a business plan, however I don't know how to factor in realistically how many 'things' I will sell in a month.

Nickelbabe - my products are not homemade, and I don't really want to do online as there are countless websites and I don't have any storage space at home anyway. And yes, it's very niche. As in, nobody who is involved in this 'field' would even know what it was about.

Imagine you have never played golf, have no interest in golf. You'd walk right past a golf shop. And this is nowhere near as mainstream as golf

There are two shops in the entire country in existence catering to this market. I see an opening in my city. I tried to ask the person who owns one of the shops but she was a bit standoff-ish at my questions. I assume because people travel hundreds of miles to get to his shop, he's probably not exactly going to encourage me to take some of his (already limited) market..