Tuesday, 13 December 2011

The Shop is Shut

One of the factors that drew me towards using Ebay as the marketplace for my tiny business is that  I can close down business as often as I like - even during the Christmas spending rush!  And so, as I'm away next week, I'm winding things down and temporarily stopping my selling activity in a day or two.  You'll clearly be able to see an obvious reason why I might want to do this given that I'd like to focus on having fun with my family whilst on holiday.   Standing in long queues in the post office at their busiest time and having a motorhome awash with padded envelopes containing glittery treats just would'nt cut the mustard.  But I'm also shutting shop so that I can take stock, reflect on my first two months of trading and make some changes to how it's run before I open it again on a proper footing after the festive season.

So, what do I need to do differently?  Well - I'm not properly set up as a business at the moment so informing  Ebay, Paypal and the Inland Revenue that I'm operating on this footing really is a priority.  Then there's questions, questions to be answered.   Like 'Do I really need a business bank account' given that the bulk of my transactions go through Paypal?': 'Is there any point in incurring a monthly fee to open an Ebay shop?'  My accounting system, though accurate, is a little unwieldy so that needs tweaking to enable me to record sales and purchases in a way that doesn't involve writing 'War and Peace' each time I undertake a transaction.  And I've been packing stuff up and labelling the envelope with its contents ready to ship straight after I've listed it as an auction item.  A good idea in the first few days when there were only a few things to sell. Now though,  I'm having to play a time consuming game of hide and seek every time someone's made a winning bid.   Small practical issues like this  have to be resolved before my head explodes with frustration!

I'm treating my initial period as an experiment - and I have to say it's been more successful than I'd hoped.  Turnover in the first month was £200 but I've already doubled this take in the first half of December.  Seasonal spending no doubt plays a part but I've also now got a handle on what sells well and makes the most profit.  The exercise has helped me to become much more discerning at the stage that I acquire stock. Hopefully, there'll be no more entries in my purchase ledger that say 'Crap Job Lot'!   And rather than drawing on savings I've now built up a little pot of money so that tiny business is self funding.  I was expecting a loss in the first financial year but I'm now reckoning on being able to recoup start up costs and break even.  There's no reason at all why I shouldn't be profitable in 2012/13.  Will it be enough so that I can reduce my employment hours by a day and still be able to make enough to continue to pay off the mortgage at its current rate?   It looks like a goer but I'll know for certain soon after the start of the New Year.


3 comments:

  1. It all sounds fantastically professional. I hope it continues to grow and is a massive success. x

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  2. I'm so pleased that things have gone well with your fledgling business.I hope it continues to do well, and you get your midweek weekend!

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  3. You seem to be well organised, perhaps I can offer my thoughts having started and run two small businesses from home. I opened a business bank account with Barclays, the first year was free. At the start of the second year I knew I couldn't afford to pay charges, so I moved to Abbey which offered a free forever service if you kept within certain perameters. This worked well. It's now Santander so I don't know if they offer that any more. You don't need to have a seperate account if you keep good records, just remember that you and the business are two seperate entities.

    You do need to inform the Inland Revenue but I think you have a certain time to do that, you can try the business first to see how it goes. You won't be paying tax for at least two years, your start up costs should wipe out any profits you make , you need to claim for every expense allowable,
    for tax purposes. This is one area which I am not sure about so I had an accountant to fill in my return once a year. It saved me a lot of money, he was able to claim rebates for me. If you want to go down this route look for a small independant accountant who has the right qualifications, some claim to have but are bogus.

    As for stock control and packaging, your items are small so could you have a shelf with boxes on, labelled up with dates which can be easily changed. Store your items in there as you list them, parcel them up when they have sold. Good luck.

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