In the first of a series looking at the possibilities of running a business from home – we look at the basic building blocks you’ll need to get up and running. The things you’ll need to think about to ensure your new enterprise flies rather than fails. And some of the secrets to success that home based business entrepreneurs have used to make their passion make them money.
And once we’ve got the basics out of the way, we’ll look at some of the things you might sell with an online business – and reflect on what’s on trend and what’s rotten tomato.
Home working is a great way to get started in business and in today’s connected world running your own show from your Kitchen or Living room is more accessible than ever. Whilst you might love pottering around county sale rooms and maybe fancy yourself as an online guru in a chosen specialism – can you make a living out of your passion?
General or Specialist?
The pre-owned and antiques markets are huge. Being a generalist in this field will mean plenty of objects to choose from at fairs and sale rooms – but also reduces the chance that you might spot a true bargain amongst all the bric-a-brac. If you have a specialist passion – vintage handbags for example – then it might pay to focus on that. If you’re an expert in something, you’ll know what you’re looking for and will be relying on your expertise, rather than ‘an instinct’ to gauge what might make you money. Specialising in something also means you can fine tune your internet presence around the search terms potential customers might be using online – and also promote it to special interest groups across social networks.
Running a business takes capital investment to set up. Home based businesses are attractive because the overheads and investment required tend to be lower. But you still need to make sure you’ve established a working capital to maintain and fulfil your stock, running costs and other business needs.
You’ll need to get a Business Bank account to – which will enable to keep the running of your business separate from your domestic finances. Being able to keep your business expenses in one place will enable you to track your business expenditure and maintain accounts, which will make the annual tax return – and quarterly VAT returns if you establish a turnover above £83,000.
Postage is likely to be a big cost, sellers or commission fees – if you’re using an online sales platform – will be another. Don’t forget to factor in the money for your stick. You’ll need to get good at stock-keeping records so you know what you’ve spent and can expect to get back. – to work out you profit margin.
Only after you’re sure you are turning a profit should you start to take money (called drawings) – out of the business. To do so beforehand will risk the financial viability of your enterprise.
If you’re taking on your own accounts then some account management software – such as Freeagent – will make your life easier. Better still find an accountant who specialises in sole-traders or partnership businesses as they’ll be able to offer you advice on completing your accounts that you won’t find in online tools.
Brand and promotion
If you’re selling online through an auction site such as eBay, you won’t need much more than a canny username. But if you’re getting serious about establishing a ‘pre-owned’ or ‘vintage’ brand that you can market online through your own platform – you might want to develop a brand.
If you’re creative you could come up with the name and identity yourself. If creativity isn’t your strong point you could find yourself a local Marketing Specialist who could work on some ideas and develop the look for your business for you.
If selling online is the way you’re going you might also want to brush up your skills as a marketing copy writer and Search Optimisation Specialist. If the latter seems like a mine-field (because it is) then there are plenty of home-based professionals who can help you for a fixed monthly fee.
You might decide that the direct real-world approach to customers is the way forward for you – and that local markets are the way to make that happen. If you do plump for a market-traders stall there will be a license fee from your local authority and rent for your pitch – but it can be a relatively low outlay for a new business. You’ll have to hone are your vocal skills so you can entice passers by to shop with you. As well as make sure the goods you’re selling are well displayed so that potential customers can see what’s n offer and are enticed to buy.
But a far bigger market is available through the internet. To begin with you could establish an online marketplace through sites like eBay and Amazon. As your business grows though you might want to create a standalone store. In today’s connected world it is possible to do it yourself through a service that will also help you to manage your customers, logistics and stock. There are some great monthly pricing plans for these sorts of service that enable to you get started with very little up front outlay and – crucially – with no ongoing contract. So you can duck out early if it isn’t working for you. Make sure you pick one that is scalable – such as market leader Salesforce – that way you’ll be able to cope with demand if your business takes off quickly.
In this game, your stock is your business, and if you’re setting up your own business from home to make some extra money, it’s going to be very unlikely that you live on your own in a 3 bedroom London Town House – with plenty of storage space to space. Far more likely is the scenario that you live in a 1 or 2 bed apartment. In which case it’s a given that you’re going to find storage space a challenge as your business grows. It won’t be long before you find you’re living around boxes of your stock – in the living room, bedroom, store cupboard…
That’ll make it very hard to organise what you’re selling – so if someone buys a 2007 vintage Anya Hindmarsh ‘I’m not a Plastic Bag’ shopper – will you know exactly which box it is in?
Once your fledgling business has found flight, you might find you need to expand or contract your storage space – depending on your stock needs. One way of ensuring the most cost effective storage is to look for a storage provider that bills by the day, rather than weekly. If there’s a playground craze for pink nic-nacs – and you happen to have plenty of pink nic-nacs stock – you’ll sell them fast and be left with storage space you aren’t using. If your storage provider is flexible you’ll be able to scale up or down depending on your needs – and the quicker you can do it, the more cost effective it will be.
Storage providers that bill by the day are fairly few and far between – so you’ll need to do your homework. If you’re in the Southwark, Camden or Wandsworth Boroughs of London we can save you the hassle – as good honest value always been one of our Golden rules – and you’ll only ever pays for the space you need for the days you’re in it.
The physical logistics of your business are important. If you’v got a great online system sorted for knowing who’s bought what and which needs to be sent to where – you’ll need to ensure the physical fulfilment of those things is spot-on. Will your business mean sticking to objects that you yourself can carry or require no specialist transportation? Or will you be selling items that might be larger or fragile that might need extra care or facilities. Will your stock be delivered direct from your suppliers? Or will you need loading facilities if you’re doing it yourself. Will you be packaging and dispatching goods yourself down at the post office or using a collection courier service?
If you are dispatching goods via Courier you’ll need to be available to see them picked up – unless you concoct some form of dispatch bin that the Courier knows is a safe and secure place to collect them from. Alternatively – if you’re looking at self storage space – there’s another potential perk that comes with renting that extra room. Many self storage companies offer help with dispatch of items for Couriers. At ABC we were one of the very first to offer that service and, not unsurprisingly, others have followed our lead. For example – you get a bunch of orders on a Wednesday evening, and get everything packaged up and ready for collection by Thursday lunchtime. If you have to hang around until the Courier turns up you could waste your afternoon – but if you can leave it with our reception team to hand over, you’re free to go and enjoy the rest of your day.
So that’s it – the basic building blocks of a home based business – next up we’ll be looking taking a light-hearted look at some of the stock based pre-owned businesses that you might make a mint for any budding entrepreneur.