During Debt Awareness Week we’re discussing five common debt danger signs. The...
5 tips for starting a small business
Whether it’s through baking cupcakes, making cards or taking photos, a side business can be a great way to generate some extra money. Making cash from doing something you love – what could be better?
Let’s not be hasty though. Before you jump into turning your hobby into a business, there are a few things that need to be considered.
Luckily, guest blogger Helen has some first hand experience of running a small business on the side and she’s here to share some of her wisdom. Over to you Helen!
It’s very true what they say about necessity being the mother of invention; I’d never really considered the idea of setting up any kind of small business. But when my boiler broke down and I had no spare money to fix it, I needed to think of a creative way to make some extra cash or face a long, cold winter with no heating or hot water.
So having recently finished decorating my 12 year old son’s bedroom and after struggling to find some age appropriate and affordable artwork for his walls, the idea for My Hero Frames was born. Armed with nothing more than my newly created Facebook page, some posters that I’d put together on my laptop and a very strong desire to raise the £170 I needed to get my boiler fixed, off I went. Here’s what I learnt…
1. Pick something you know and that you’re interested in
If you’re already out of the house 10 hours a day doing your day job, the thought of spending your evenings and weekends doing something that bores you, no matter how much money it’s making you, is soul destroying. As geeky as it sounds, when I get home from work, I actually find the process of creating a picture quite relaxing, and the feedback from customers when they love what I’ve made for them certainly doesn’t hurt either.
2. Don’t be afraid to utilise your friends and family to help you get started
We’ve all got at least one friend who makes Kim Kardashian look positively shy on social media, so don’t be afraid to ask them for help. Ask your friends, family, work colleagues, people you meet in the pub, the woman who brings round the sandwiches at work, get your friends to ask their friends; literally leave no stone unturned when it comes to promoting your new business and helping get your business out there.
And unless you’re lucky enough to have created the next Angry Birds or written another 50 Shades of Grey, don’t be disheartened if you’re not flooded with orders straight away.
Just keep on promoting your product at every opportunity and shamelessly share it on social media (you might drive your friends crazy in the short term but they’ll all reap the benefits when you’re a successful entrepreneur and you can treat them in return!). Don’t be afraid to ask for feedback either, when you make a sale and your customer is happy, always ask them to leave a testimonial on your page or share it with their friends.
3. Check your postage prices
If you’re going to be posting out your goods then double check your prices, and then check again!
One of the most expensive mistakes I made was not checking the weight of my parcel when I offered a returning customer free postage. I almost had heart failure at the Post Office checkout when instead of the expected £2.80 to post my parcel, it was actually £12.98! All because I was 200g over the small parcel weight limit.
Also, don’t forget to factor in your packaging costs; bubble wrap, boxes, jiffy bags, polystyrene beads, brown paper, parcel tape, address labels… The list is huge, and it all adds up.
4. Constantly review what you’re doing and shop around
No matter how great your original idea is, the end product is never going to remain the same. The most successful companies stay successful because they’re constantly learning and adapting to changes in the marketplace.
So if you realise that you can do something better then don’t be afraid to change it. If you can find a new supplier to save money or get a better product for the same price then do it, or if a customer asks for something a bit different then don’t be afraid to try it.
5. Always believe in your product
I remember when I first started and I was so grateful for each order that I’d be almost embarrassed to discuss prices and ask for payment, and I was always worried that people would think ‘why would I pay that when I could make it myself?’
But what’s easy and natural to you isn’t the case for everyone. Not everyone is creative and those that are might not have the time or inclination to be creative.
Work out your price and state it confidently. You’ll need to be prepared to barter and negotiate but don’t ever sell yourself short. Agree your price and payment terms up front and if you’re creating something bespoke or personalised then ask for a deposit. I certainly learned that the hard way after creating a personalised product for someone who promptly disappeared off the face of the earth when it came to parting with the cash!
If you want to start a business on the side don’t forget to read our blogpost about turning a hobby into a business. Remember to declare all additional income to Her Majesty’s Revenue and Customs (HMRC) too.
Have you ever started a side-business? What challenges did you face? Let us know in the comments below!