How long did it take you to set up? Plus general startup questions!

[waitingformagic]

[content removed]

[ladyluckjewellery]

Hi,

I'm not sure how much I can help you, but apologies if you've already put this elsewhere on the forum, if you could say what craft you make then I'm sure people who have specific experience of that type of craft will be able to offer their advice.

In terms of 'getting up & running', what exactly do you mean? Setting up a website, advertising your business as 'open' etc?

Unless you are making specific Christmas themed crafts, then it won't hurt to have excess stock, you can always sell it next year ;)

It also depends on how busy you expect to be once up and running, I officially set up just over a year ago, so have been trading as a business for about 15 months, and haven't yet got too busy, business has been steady, which is great, and I think realistically in the current climate, and for a 1st year trading, about as good as I could hope.

If you could let us know what it is you make, then I'm sure we can all try to offer some more tailored advice for you.

Claire

[wastril]

Hello. My situation may be different, but here goes anyway. From the moment I was made redundant it took about 3 months to get our new business up and running. However, we were basically buying out our then boss and "Downsizing", which meant moving to new premisise. If you have no workshop/factory ( depending on whom you talk to), then it should be a case of getting up the website, which can be done fairly quickly i believe, getting cards and fliers done, again this should only take a week or so. The biggest problem was getting the suppliers on board. In reality this means paying for everything up front, waiting for cheques/cards to clear, and then accepting that to them, you are a small purchaser and therefore down the priority list.
That said, I would think that you could be up and running in about a month from deciding to go for it. As for Business Link, forget it. If you actually ask about their experience, they are invariably failed business men. Like I want advice from someone who has failed.
Fortunately, I have now found one who is superb. What neck of the woods are you from? Not the Kent area I suppose

[Caroleecrafts]

It probably took about 3 months, advice from places like Business Link but mainly from other women in business groups, I found them more helpful, encouraging and supportive as they appreciated what I was trying to do.

I read books on starting a craft business, not all of the info was relevant, particularly the pricing angle had I followed there example I would have priced myself out of the market.

Forums like this, ask specific questions and we will help or push you in the right direction.

I had also worked in a large corporate multi national company in senior management so this all helped.

[Bath-Bomb.Com]

Anyone can register as self-employed...or am I being thick?

What's it got to do with HMRC whether you have stock control measures and an accounting system or accountant? Obviously, I do realise that if you don't keep your books in order and then file accounts that are inaccurate they can come and check - but there are lots of people who buy simple pieces of software or even a book-keeping book to keep their accounts.

I personally don't think it's worth spending 6 months getting everything perfect in order to find that your business isn't viable and you close it a month after trading...not saying this will happen to you but as a worse case scenario.

I say get out there and start making money....

PAYMENTS - You can get a Virtual Terminal for online payments through Paypal (if you have a merchant account) it costs about £20 per month but I don't know if you can set it up for taking payments in person - maybe a laptop and WIFI????? I use order forms with a place to enter credit/debit card details and then process the payment when I get home - or you could take people's email address and invoice through Paypal - not the best way but it might do for now.

[Bath-Bomb.Com]

Me again!!!!

I don't add my time to my cost - a frend of mine criticised me for this and I pointed out that I'm a sole trader and my profit is my payment. Like you say, you can end up pricing your self out of the market.

I do a simple calculation - cost of the product x3 = retail price; cost x 1.5 = wholesale price; cost x 2 = dropship or agents' price.

It usually works out at almost exactly what I thought I could sell it for...

HTH :)

[Caroleecrafts]

I know costing is a difficult one if you search the forum this has come up before and I started a thread about being criticised that my prices were too high, on here I have been told they are not.

I think add up the materials and apply a percentage similar to the suggested by Bath Bomb, you can always increase say every 6 months if things seem to be selling and comments are that people would pay more.

[wastril]

For costings you NEED to work out how much your overheads are an hour( rent, power etc), and how much you want to pay yourself an hour. Add these to the costs of materials and bingo, theres your prices. However, you need to make sure that you have covered the costs of all your outgoings ( remember things like plastic bags may only work out at 1p each, but if you need to buy 5000 in one go, you have to find that money upfront. If the prices seem to high, have confidence that you've worked them out ok and stick with. Its no point doing work that loses money.
Unfortunately you will soon realise that people are prepared to pay a garage £100/hour for the privilage of someone doing their car, but you try and charge £15/hour and you are the anti christ.
Good luck and go for it

[Poppy4lee]

My local Business Link were really helpful, they showed me how to calculate a 'gross margin profit', so that I could work out my prices.

[nattynetty]

Our local Business Link was quite helpful when I started up so it's probably worth contacting yours - you'd kick yourself if you didn't see them then heard they were fab in your area! They would also be able to point you in the direction of any other organisations that offer free (or subsidised) training or grants - in Suffolk we have MeNTA who run free courses and another agency I used was http://www.enterprising-women.org/index.php I think they only cover the East of England but there's useful stuff on their website for anyone plus I bet if you contacted them they might know of a similar agency in your area.

As for taking payments, your best bet initially is probably to add Paypal to your website. Merchant accounts (like through HSBC) are notoriously hard to get as a start-up business as they often like to see details of your past 6/12 months of trading - if they do give you an account it'll be at very high charges initially. If people don't have the cash at a craft fair maybe direct them to your website and say you'll put it to one side for 3 days to give them the chance to order it. You'll soon gauge how many potential customers you're losing and be able to make an informed decision on whether the credit card terminal is worth getting.

Finally, you'll probably find your business grows gradually so don't stress about getting packaging ready before you're up and running - when I started I'd buy boxes/envelopes from the post office, ebay or the £1 shop until I was getting enough orders to make it worth buying in bulk.

And nearly forgot - good luck and hope it goes well :)

[ladyluckjewellery]

Ahhh loads of replies now - I knew people on here would jump in to help.

Just a point about HMRC and all of this registering as a business malarkey. Don't worry about what they say regarding having things in order before regsitering - I would do it now. It's absolutely no business of theirs whether you have stock, cards etc or indeed if you have sold anything at this point.

The longer you leave registering, the longer the time passes after you have incurred possible business costs, and you must regsiter within 3 months of starting to trade, so any costs incurred more than 3 months before you register cannot be counted as legit business costs. (crikey that was a long sentence - now breathe!!)

Personally, and I don't want to sound disheartening, I think you may have left it a little too late to really hit the Christmas trade this year - I'm in the same line as you, and have had most of my fairs / parties booked up for the past few months, I only have 2 weekends free between now and xmas. Also, I am in a position where I probably won't be able to take on any more xmas commissions after the end of this month, as I will be too short of time to make them.

That's not to say you won't be able to sell anything before xmas this year, but I think next xmas will really be the one to aim high for.

I hope that helps, and I haven't rambled too much - if you want any help/advice with HMRC, tax etc feel free to ask, I've been self employed in some capacity for a few years now, and also do all of the accounts for my OH business, so I'm used to dealing with HMRC & thier little quirks:D

Claire

[sharon]

Business Link are very good (obviously some advisors better than others), & have free seminars with plenty of Q & A sessions - someone there is bound to ask a question you hadn't thought of.

Definately get in touch with business advice groups geared for women - the support is great, they understand so much better than men about having to fit things in around childcare, housework etc.

A group I can recommend is WIRE (Women in Rural Enterprise) - ignore the rural bit, it was originally set up to help women in the countryside who couldn't get the same help as townies but rapidly went on to cover any woman setting up her own business idea. They have support groups dotted all over, membership used to be £30 a year but you can go along as a visitor twice for free. If there's no group in your area you could set one up yourself! Just do a search for WIRE on the net.

Just a thought, but if its getting too late to hit the Xmas market via fairs/website etc why don't you make as much jewellery as you can afford & put some ads up for jewellery parties. If you've got a printer, do your own ads on A5 paper & put up in local shops, (newsagents, hairdressers, clothes shops) + schools etc. Then take your jewellery along & see what you can sell on the night (cash/cheque only with bankers card) + take orders with 50% deposit. Give a gift to the hostess at 10% of the total of the orders sold, & give cards out. Also do some forms for taking bookings for other parties from some of the guests at the parties - don't forget to take your diary with you!

Good luck :)

Sharon

[teallach]

I seem to be in the same position as you regarding the length of time it's taking to get started up! It is partly my fault, but due to the fact that I work every day except Sunday with the odd half day, there is only so much you can get organised.
At the moment, insurance seems to be my biggest nightmare. I am really struggling to get any which will cover me working from home, making jewellery. The box company I'm using have also dragged their heels and HSBC very kindly didn't bother to issue a debit card when they set up our account so I've had to wait 3 weeks so far to get that sorted:mad:
So, if you feel like nothing is moving...don't worry, you're not the only one:)

[Bath-Bomb.Com]

Hi Teallach,

Have you tried http://www.craftinsurance.co.uk/ for insurance...he's very helpful and I bet a lot of people on here have used this...

:)

[steve-bead]

Hi waitingformagic,

One thing that sprang to mind - have you heard of 'Critical Path analysis' - crops up in project management ?

In a nutshell, you list all the things you need to do to get to where you want to be - your business up and running.

Then you look at the list again and pick out only the 100% critical and very important things that MUST be done.

You then concentrate on these first, everthing else can develop at a slower speed.

So for example, it may be that you cannot trade in any form without getting some relevant insurance - so this is a critical job. Whereas packaging material, whilst handy, can be grabbed from a shop on a need by need basis (at first) as suggested already in the thread, so its not that important.

The upshot of all this is you focus on what needs to be done and it should lead to your being up and running much faster.

Thats the plan anyway!

Nice to have someone else from Sunny Slough on here as well :)

All the best

Steve

[urbtaf]

Theres some BS being talked among the good advice.
The bottom line to starting a business, is you tell the Taxman so you make sure you can claim any setup costs, but they are quite gentle with new traders,
You dont need- a bank account-accountant-card machine!
These all cost money, and your not making any yet!
Just use a diary, record all incoming moneys, and all outgoings on the correct dates,keep all reciepts
That is all you NEED to do
All your other time should be spent making the idea work
Sorry to sound blunt but I feel some on here have been reading the banks small business advice booklets! and havent dawned that they are written by people who havent done it themselves:confused:

And as for advice from the various services, listen to it all, there may be some good hints among it all, The "failed business men" may have had some success in the past wich could amase you

[steve-bead]

Hi,

Urbtaf has said some sensible points, but I dont agree with the opening line ref the bottom line being to tell the taxman.

This three month rule thing throws a lot of confusion into the ring. Its not true that you cant claim for things if you had not informed the tax office you were self employed - you simply have to approach things in a slightly different way.

A hobby that becomes a business will bring with it a certain amount of 'costs' that the hobby has already met, and these are written down and taken onto the books of the new business as a start up expense.

I must stress im only touching on this in a general way to get the flavour across!

Now, yes, there are certain things that the taxman might not consider relevant to the new business, but in my experience (and ive done this a lot) theres not much !

What you have to watch out for is obvious business costs, for example if you put an add in the yellow pages - that is clearly not a 'hobby' cost and so if you tried to take it on as such, you would fall foul of Mr Tax.

But stock, equipment etc etc can all be brought onto your books.

Also you have to keep in mind class 2 NI payments, which you have to make if you are self employed, irrelevant of any other NI you may pay.

You can apply for an exemption if you do not earn that much from your business (profit of less than around £4.500 I think), but you must apply for this, its not automatic.

So for many people the benefit of being self employed, in their initial months of setting up, are outweighed by the NI commitment.

It can be a bit complicated - thats why there are accountants I suppose !

All the best

Steve

[urbtaf]

Point taken Steve, The three month rule is maybe badly named, its not so much a rule as advised. but in my experience telling the IRS straight away keeps them from looking at you too closely, if you leave it too long then they wonder just how much you have been making.
The main point I was trying to make in my blunt way, is dont set yourself up with a load of costly overheads, because these can kill a business before it gets off the ground

[nattynetty]

Point taken Steve, The three month rule is maybe badly named, its not so much a rule as advised. but in my experience telling the IRS straight away keeps them from looking at you too closely, if you leave it too long then they wonder just how much you have been making.
The main point I was trying to make in my blunt way, is dont set yourself up with a load of costly overheads, because these can kill a business before it gets off the ground

Agree completely on both points, so much easier to register with the In Rev as soon as you start up...otherwise it can be confusing trying to work out exactly what you can and can't claim from before the time you officially registered - I wouldn't have had a clue if I didn't have a free accountant at my disposal and obvioulsy if you need to pay for an accountant to work this out for you any savings you may make have been cancelled out.

And personally I think it's always best to start small and grow organically - I had virtually zero overheads or costs when I started my business and as things like bank accounts, card terminals, premises etc became necessary I got them but only when I absolutely needed them to minimise financial risk (see being the daughter of an accountant has really rubbed off on me ;)).

[wastril]

The thing about registereing with the IR is that it doesn't take that long. The thought is worse than the deed, and once done, you will feel better and a major pyschological obstacle will have gone. It would appear that other peoples experience of business link is better than mine. I guess the obvious thing to do is listen to everyones advice, but be selective as to whose you follow. Everyone has different experiences of the set up process. As was explained in the first epistle, my angle was setting up a business that was taking over from one that went bust. It was a different name etc, but the three of us had been working in the same trade previously, so there may be different start up procedures for doing it from scratch.
It may be useful to see your Business Link rep to see if there are any Start up grants in your area. Admittedly, there may well not be, or if there are they may only apply if you are setting up in a unit, prospective turn over of.... etc, but it wont cost anything to ask.
If you need a small injection of capital, it would be best to get a small personal loan rather than a business loan, as they are exhorbatant interest rates at the moment, but try not to get any loan if poss.
Think thats it for the mo. I'm sure other things will crop up. Basically, don't fret. All of a sudden it comes together, and then the real head-aches start. Good luck once again

[nattynetty]

It was suggested to me (by a business advisor) that I could just stick stock/supplies on the house insurance??? Seems a bit odd to me though!


Yep I did that initially when I started up - was with Nationwide and just had to upgrade to their next level of house insurance (only a few quid a month more) to cover stock up to approx £6k so could be worth asking your current insurer to see if you are covered already :)

[steve-bead]

"I noticed your addy when nosing at your site... I as good as live there as I'm there so much"


Was that you who scratched my Ferrari last week ? :mad:

:sm:

[teallach]

Re your insurance question. I have finally got ahold of a company who are willing to cover my house and impending business. The jewellery thing seems to be a real sticking point but TH March, who incidentally cover my full time job's premises, have given me a decent price. I think it's okay if you're only doing costume pieces but the second you mention sterling silver, it's a different thing altogether.
I haven't had a chance to try the company suggested on here but I did notice that they wouldn't cover damage by heat and seeing as that was the one thing I needed covered, I wasn't sure if it was worth phoning:confused: