Did you 'think big' when you first started up your online shop?

[BrightIdeas]

For those running an online retail business: did you dare to 'think big' when you initially set things up?

I'm at the exciting stage of setting up my online business with a business partner and have a good 60-70% planned/defined already. With a background in marketing and the technical side of things all in place, I'm pretty confident that we're doing as much as we can to hedge things in our favour.

Initially, I'll be running the business from home, but hope to grow the business beyond that as soon as possible... but, I daren't really think beyond the first year as that seems a bit like daydreaming at this point...

When did you think - "yep, it's worked out!" What does success look like to you? Replacing your old income and turning a profit? Moving out of the bedroom and into proper premises? Or... was it being able to buy a life of high living and fast cars?????

Would love to hear what others think about this!!

[sysops]

One of my favourite topics :)

We started 4 years ago, with £150k capital. It took 3 years before the business became self supporting and profitable (paid everyone enough with profit left behind). In the first 3 years, all profits were re-invested for maximum growth.

We started in a small unit (1500sq ft), then moved to a bigger one two years later (4000sq ft), and will shortly be moving to our third (8000 sq ft).

I wouldn't want to try and do it with any less capital than that. It is much, much harder than you think it's going to be.

[Page]

The thing is to plan for growth to the next stage or so - while also if possible putting in structures that will allow you to get to stages after that with the least possible add on costs/hassle.

Spend your time dreaming of millions and you will probably go nowhere - plan your growth to the next stage and sketch it to some stages after that and you might even get there.

Plus everyone has their own objectives which might be different from yours which again affects the plan. If you want £££ then your plan is different from someone that wants time time time with just enough to live on.

So don't ask what other count as success all that matter is what you count as success. Plan and review and with time your measures and objectives are liable to change.

[BrightIdeas]

One of my favourite topics :)

We started 4 years ago, with £150k capital. It took 3 years before the business became self supporting and profitable (paid everyone enough with profit left behind). In the first 3 years, all profits were re-invested for maximum growth.

We started in a small unit (1500sq ft), then moved to a bigger one two years later (4000sq ft), and will shortly be moving to our third (8000 sq ft).

I wouldn't want to try and do it with any less capital than that. It is much, much harder than you think it's going to be.

:):):) Very interesting post! What do you sell? (trying to compare my storage requirements with yours). Can you PM your website URL if you would rather not say on here?

It is much, much harder than you think it's going to be

What were the main challenges for you?

I wouldn't want to try and do it with any less capital than that
I'm afraid I will be! Was the primary investment in stock or other stuff?


REALLLY APPRECIATE YOUR INPUT.

[BrightIdeas]

The thing is to plan for growth to the next stage or so - while also if possible putting in structures that will allow you to get to stages after that with the least possible add on costs/hassle.

Spend your time dreaming of millions and you will probably go nowhere - plan your growth to the next stage and sketch it to some stages after that and you might even get there.

Plus everyone has their own objectives which might be different from yours which again affects the plan. If you want £££ then your plan is different from someone that wants time time time with just enough to live on.

So don't ask what other count as success all that matter is what you count as success. Plan and review and with time your measures and objectives are liable to change.

I'm a big advocate of forward planning, but am also open minded about what success means to me at the same time.

I wanted to get an idea of others' aspirations and how the reality compared with this.

[sysops]

:):):) Very interesting post! What do you sell? (trying to compare my storage requirements with yours). Can you PM your website URL if you would rather not say on here?


Not in public, and not by PM until we know each other very well :)


What were the main challenges for you?


That's good question. I think the biggest one, and the one most people underestimate, is generating sufficient business. I think I was quite fortunate to start off with a reasonable grasp of the numbers involved, having worked in online retail for nearly 10 years. I'll explain.

Say you want to be able to pay yourself £25k.

How much do you think you need to sell per month?

How many site visitors do you think it will take to achieve that?

How much do you think each visitor will cost you to acquire?

How much stock do you think you will need to hold?

Give me your answers, and I'll give you my take on those numbers.

Hint - it's not easy to achieve this from home, unless you have a lot of spare space, or you're going to sell jewellery.




I'm afraid I will be! Was the primary investment in stock or other stuff?


Stock, systems, running costs (salaries, rent, rates, heating).

[UKSBD]

My first website just started as a hobby.

I built it for a product, added a bit of info about and some images of the
product and was just playing really, when the phone started ringing with
people wanting to buy.

I didn't even have a supplier or were even trading, was basically doing
it in the evenings. I then formed the business, still just with intentions of
running it in my spare time, but 2 years later realised it was actually
costing me money going to my main work, as it meant I wasn't there
to answer the phone.

I then had to make a decision, and thought as long as the business was
making £30k a year I would pack up work and go for it.

[BrightIdeas]

Originally Posted by sysops http://www.ukbusinessforums.co.uk/forums/images/buttons/viewpost.gif (http://www.ukbusinessforums.co.uk/forums/showthread.php?p=1083978#post1083978)
Not in public, and not by PM until we know each other very well :)

Ooh, forward! :p Ok, that's cool.

I work with online businesses at the moment, so appreciate how difficult it can be to gain online visibility, trust, and achieve decent conversions. It's not just SEO but also all the other marketing - the right product, place, promotion and price, etc. etc, that make it an attractive proposition for the customer. I don't mean a USP - just a solid reason why a customer is compelled to buy from you rather than another company.

Re sales... I've done forecasts and looked at realistic/pessimistic/optimistic forecasts. TBH, it's all pretty academic really, isn't it? That's the problem. Have done some research on competitor performance, but picture will never be 100% complete as info not all in public domain. However, I say with confidence that my online offer will be better than most competitors in my field.... but, obviously a key advantage existing competitors have is that they are known and have on/offline visibility (both take time to build up as you know), but as a new online business, I do not.

And, yes, my products will be very small/pretty small so hopefully storage space will be okay (big bedroom and garage initially) :).

[BrightIdeas]

I guess noone's going to say that it never matched their expectations (this is a public place after all!). But, is it, as Sysops said, much much harder than you thought?

[sysops]

One of the most interesting aspects for me is managing growth while remaining profitable. It's very easy to eat up all your margin.

Some aspects of growth are smooth, you can control your spend in infinitely small steps. Like stock, and advertising.

Other aspects are quantised, you can only grow in jumps. Like taking on an extra member of staff, or moving to a bigger warehouse.

The quantised ones are the problem, because you will always either be over capacity (not quite enough staff, or not quite enough warehouse space), or under capacity (too many staff, too much warehouse space).

Being under capacity is bad, because it's a struggle for everyone.

Being over capacity is bad, because you're paying for man hours or square footage that you don't need, and that isn't making you money.

Striking the balance is very tough if you're trying to grow at a high rate (I work on 50-60% pa growth).

[sirearl]

A bit like Uksbd started as something to do when the web started.

Soon realised what was important .

But never ever found it hard,and certainly would not put a lot of money into anything untill I knew it was a success.

A lot of responsibility though.:(:)

Earl

[BrightIdeas]

One of the most interesting aspects for me is managing growth while remaining profitable. It's very easy to eat up all your margin.

Some aspects of growth are smooth, you can control your spend in infinitely small steps. Like stock, and advertising.

Other aspects are quantised, you can only grow in jumps. Like taking on an extra member of staff, or moving to a bigger warehouse.

The quantised ones are the problem, because you will always either be over capacity (not quite enough staff, or not quite enough warehouse space), or under capacity (too many staff, too much warehouse space).

Being under capacity is bad, because it's a struggle for everyone.

Being over capacity is bad, because you're paying for man hours or square footage that you don't need, and that isn't making you money.

Striking the balance is very tough if you're trying to grow at a high rate (I work on 50-60% pa growth).

Good points.... my planning ends at year 1 at the moment, where overheads are very low. As soon as it goes beyond the capacity that being at home will allow, then, there will be a massive leap (relatively speaking)... I guess that's the point of plans though - always adjusting and evolving in light of what's going on.

50-60% growth? That sounds good - particularly in today's economic climate. :)

[BrightIdeas]

A bit like Uksbd started as something to do when the web started.

Soon realised what was important .

But never ever found it hard,and certainly would not put a lot of money into anything untill I knew it was a success.

A lot of responsibility though.:(:)

Earl

Good to know that it wasn't too hard for you. Although, I guess if your initial investment was pretty low, then there would have been far less pressure for you to attain a certain level of sales, etc.?

[sirearl]

Good to know that it wasn't too hard for you. Although, I guess if your initial investment was pretty low, then there would have been far less pressure for you to attain a certain level of sales, etc.?

yep its the level of sales that bring the resposibility.lots of people rely on me little old hobby horse.:(:)

Earl

[deniser]

I am a bit different to Sysops in that I started thinking small with the business being a hobby! I am now in the 4th year of my site and having started with an investment of only £2,000, still find it unbelievable where we are now.

We initially spent £1,000 on the site and £1,000 on stock. We started in a small shop of 500 square feet at the tail end of a lease for another business where this business occupied a small corner at the back, then moved to a larger shop of 1800 square feet after 6 months. We are now bursting at the seams and desparately need bigger premises of at least 3-4,000 square feet but we would like to buy a freehold which is difficult to find.

We made a small profit in the first year and growth has been 130%, 100%, 50% in the years since.

I am always amazed with the way the site has gone but we found our little niche and I am a bit of a workaholic, even if it was a hobby to start with! Now it is my full time occupation and my husband's too.

My biggest challenges for the next few years are copycat businesses, finding the right premises and currency fluctuations.

Good luck with your site.

[AndyP]

..... It is much, much harder than you think it's going to be.

I'll second that comment! That said, incredibly fulfilling, even if it does tend to mean that you give up any other life!! I look back sometimes to when I was an employee. I genuinely thought that I worked hard then. If only I knew! :)

[cocovirgin]

when we start the e-commerce, we all always think big.
the market is big, potential, with very good future, we are exciting about its growth.
our story begins with a small shop in Germany, we are doing great, we also registrate the main trade platforms and associate with other websites.
thought we meet the economic crisis last year, we are expanding, not so long ago we have established a new shop in UK.
Sometimes we have to think big, because you will find another way out when the plan does not work in one place, or one way. And the cost is less than we thought, compared to the real estate, this is the advantage of the e-commerce.

we welcome friends to our website, or provide with a friendly link, we are all one of the small business in this huge global market, a lot of work need to do.

cheers.

coco
myefox.co.uk

[privateer]

I am a bit different to Sysops in that I started thinking small with the business being a hobby! I am now in the 4th year of my site and having started with an investment of only £2,000, still find it unbelievable where we are now.

We initially spent £1,000 on the site and £1,000 on stock. We started in a small shop of 500 square feet at the tail end of a lease for another business where this business occupied a small corner at the back, then moved to a larger shop of 1800 square feet after 6 months. We are now bursting at the seams and desparately need bigger premises of at least 3-4,000 square feet but we would like to buy a freehold which is difficult to find.

We made a small profit in the first year and growth has been 130%, 100%, 50% in the years since.

I am always amazed with the way the site has gone but we found our little niche and I am a bit of a workaholic, even if it was a hobby to start with! Now it is my full time occupation and my husband's too.

My biggest challenges for the next few years are copycat businesses, finding the right premises and currency fluctuations.

Good luck with your site.


That's very similar to my own experience. I was a workaholic and downshifted from a well-paid job (once I realised that I really didn't want to do it forever). I had a hobby that was poorly served by existing retailers, so I started my little online shop with perhaps £10,000 or so (no business plan - just a gut feel that there were others).

At first it was a "let me see how this will do" thing... and it did well enough that it was worth reinvesting the initially tiny profits. I was lucky enough to go mortgage-free and that REALLY helped me plough everything back into the business.

So, I never dreamed of 'making it big'. To be honest, I don't ever want to employ anyone else. My partner helps out, but I pay her piece-work (!) and it's the way I prefer to go for future.

[BrightIdeas]

Can I just say... I'm so glad I joined this forum. It's such a great thing to be able to hear other people's stories. It's pretty inspirational actually.

Love to hear more stories - keep 'em coming, please!

[Mister B]

Well, we started two years ago, with an initial investment of £60K.

Despite the tough trading climate, growth over the past twelve months continues to be in excess of 100% (albeit from a smallish base,) but what is more important to me, is that we have learned so much on the journey so far. For sure, we've made lots of mistakes but as long as you are prepared to learn and move on, (which we are, ) then it's a good thing.

Agreed, my background lends itself to our business but there is a massive difference between being an employee and running your own business. Incredibly hard but even more rewarding.

We're now in a fortunate position whereby we've generated a good five figure profit on this year to date, have cash in the bank, and a raft of new collections coming out to coincide with the launch of the new look website.

Bring on 2010!

Mister B

[niagra]

I've never thought big. My main motivation was just to work for myself and have been doing so for the last year or so. Having two young children we had got used to my previous full-time income and my wife's two day a week teaching job so the time seemed right for me to start my own business.

Now, my wife does 4 days a week and I can concentrate on the business about 4 days a week and we are getting the same income as before. The business I run will never make me a millionaire (I sell classic car ephemera online) but it allows me to generate enough income for now whilst thinking of slightly bigger ideas! Like "Privateer" has said, I also don't really plan on ever employing someone in the future so I can only get so big!

[alanc]

We didn't really think big, but found that we've been able to change the way we do things as the shop has grown steadily over 4 years. What took us by surprise was the Christmas Factor - almost 10-fold increase on normal trading. It means you have to think and work completely differently to the rest of the year. We have a large house, so room to grow for a while, but don't do enough regular trade during the year to justify staff and premises.

[quikshop]

For those running an online retail business: did you dare to 'think big' when you initially set things up?

Nope :D

Our first retail effort was started with less than £250 and that bought us the software and £50 a month advertising. We didn't get an order for 3 months - 3 years later we sold the business as the UK's number one on-line retailer in that market.

I think its harder now to replicate that type of growth in the same period of time with a small budget, the Internet is a far more mature and competitive place to trade although there are many many opportunities for new retailers to make a mark.

[deniser]

I also love this thread and hearing how you all started up.

[fisicx]

Back on page one BrightIdeas spoke asbout setting up an online shop but most of the replies were in other areas of business.

I suppose it's all about the products you sell. If it's niche goods then it's going to be difficult to bring in lots of visitors. If it's mass produced gunk then it's not going to get noticed. Another thing is the size of the market. Selling earwax remover is never going to make you a millionaire but neither is selling goldplated bath blugs - there just aren't enough buyers to make it viable in the long term. And even if you do get established it seems that most online businesses take a few years to become self supporting.

So rather than think big, I tend to think stability. As long as I earn enough to pay the bills that's all I need, no point in being greedy.

[sirearl]

Back on page one BrightIdeas spoke asbout setting up an online shop but most of the replies were in other areas of business.

I suppose it's all about the products you sell. If it's niche goods then it's going to be difficult to bring in lots of visitors. If it's mass produced gunk then it's not going to get noticed. Another thing is the size of the market. Selling earwax remover is never going to make you a millionaire but neither is selling goldplated bath blugs - there just aren't enough buyers to make it viable in the long term. And even if you do get established it seems that most online businesses take a few years to become self supporting.

So rather than think big, I tend to think stability. As long as I earn enough to pay the bills that's all I need, no point in being greedy.

Quite right very few people seem to think the viability of the product through,and seem to grab at anything that might make a few bob.

The product is everything and the right product can make life easy .

The wrong product and you will always be working hard and struggling.

seen to many people with a crap product think that good marketing and web skills can sell it.

rarely happens.

Earl

[UKSBD]

the beauty of the internet,
Set up a site to test selling a product, if it doesn't work, move on to
another product.

It saddens me seeing small business owners asking for advice and being
told to get their site redesigned, spend money on marketing, get a good
SEO, when even if these were all done, they would still be unlikeky
to get a return on the investment because the product either isn't right
or there are loads of other sites already selling the same product.

[BrightIdeas]

It goes beyond the product - it's the rest of the marketing mix and how these meet customer needs... as in:

product
price
promotion
place (e.g. suppliers/channels of distribution)
process
physical evidence (e.g. how the customer experiences your service as online is very intangible compared with bricks n mortar operation)
people

I think that, initially as a start-up, the first 4 P's are v important, but longer term, the other 3 P's need to be focused on much more.

Don't you agree?

[deniser]

Yes the product is absolutely key.

Far too many people think that the online shop is the business itself and forget that it is just a way of selling.

I was selling my product in a B&M shop before I took it online so I knew I had the right product. I then looked for the best way of selling it.

There are some absolutely ridiculous threads running right now on this subject.

[deniser]

It goes beyond the product - it's the rest of the marketing mix and how these meet customer needs... as in:

product
price
promotion
place (e.g. suppliers/channels of distribution)
process
physical evidence (e.g. how the customer experiences your service as online is very intangible compared with bricks n mortar operation)
people

I think that, initially as a start-up, the first 4 P's are v important, but longer term, the other 3 P's need to be focused on much more.

Don't you agree?

No!

Product ranks way above everything else. Then trust. Then in my case service (good service is absolutely critical in online sales) which includes process and only then price.

In some sectors price will come above trust and service but it depends whether the product is readily available elsewhere.

[Omniquito]

I think big and always have a dream to attain, once I have done it then on to the next one...

I started my e-commerce site in Jan with £500 as a hobby, incorporated it in April and in its first year is set to turn over well in excess of £100K, I won't go into profit numbers but they are very healthy indeed.

I forgot to mention, I am employed full time in a well paid job. I run this from home in the evenings and during my lunch with my wifes help, it was a hobby business that will soon take me out of my fulltime employment and working for myself without loss of income, in fact as per another post it actually costs money for me to work where I do, because I can't optimise my sales!

We have also just struck another very large supply deal that will take this to a whole new level.

Think big, dream big and work your nuts off to get there. I often commute and whilst stuck in traffic, imagine that I am the one in the Bentley stopped next to me!
I am a dreamer, but I make it happen... oh and Google Adwords! get it right and it will generate sales and make you a fortune!

Thanks for your time, Neil.

[BrightIdeas]

No!

Product ranks way above everything else. Then trust. Then in my case service (good service is absolutely critical in online sales) which includes process and only then price.

In some sectors price will come above trust and service but it depends whether the product is readily available elsewhere.

The 7 Ps aren't in any particular order. My point was that you need to think of the entire marketing mix - it's not just the product that is the be all and end all. This is true for all businesses - not just online.

[BrightIdeas]

I think big and always have a dream to attain, once I have done it then on to the next one...

I started my e-commerce site in Jan with £500 as a hobby, incorporated it in April and in its first year is set to turn over well in excess of £100K, I won't go into profit numbers but they are very healthy indeed.

I forgot to mention, I am employed full time in a well paid job. I run this from home in the evenings and during my lunch with my wifes help, it was a hobby business that will soon take me out of my fulltime employment and working for myself without loss of income, in fact as per another post it actually costs money for me to work where I do, because I can't optimise my sales!

We have also just struck another very large supply deal that will take this to a whole new level.

Think big, dream big and work your nuts off to get there. I often commute and whilst stuck in traffic, imagine that I am the one in the Bentley stopped next to me!
I am a dreamer, but I make it happen... oh and Google Adwords! get it right and it will generate sales and make you a fortune!

Thanks for your time, Neil.

Hi Neil.... sounds like you're doing good :)

are you looking forward to being able to focus fully on your business?

[cocovirgin]

I think big and always have a dream to attain, once I have done it then on to the next one...

I started my e-commerce site in Jan with £500 as a hobby, incorporated it in April and in its first year is set to turn over well in excess of £100K, I won't go into profit numbers but they are very healthy indeed.

I forgot to mention, I am employed full time in a well paid job. I run this from home in the evenings and during my lunch with my wifes help, it was a hobby business that will soon take me out of my fulltime employment and working for myself without loss of income, in fact as per another post it actually costs money for me to work where I do, because I can't optimise my sales!

We have also just struck another very large supply deal that will take this to a whole new level.

Think big, dream big and work your nuts off to get there. I often commute and whilst stuck in traffic, imagine that I am the one in the Bentley stopped next to me!
I am a dreamer, but I make it happen... oh and Google Adwords! get it right and it will generate sales and make you a fortune!

Thanks for your time, Neil.

Neil, share more with us please, seems you are doing great.
I think the beginning is the hardest, with little money, how did you do that?

[RBS]

I think big and always have a dream to attain, once I have done it then on to the next one...

Think big, dream big and work your nuts off to get there. I often commute and whilst stuck in traffic, imagine that I am the one in the Bentley stopped next to me!
I am a dreamer, but I make it happen...

You probably been watching this movie:
http://www.thesecret.tv/movie/trailer.html

If not, watch it, you will realise why you are so successful :) Its most inspiring movie for me in my whole life.

[RBS]

Seems that there are no failing businesses in UK :D 100% everybody seems to be doing great. We would love to hear some failing stories - why did you fail, what mistakes did you do etc.

[ICEY]

I've always looked at the bigger picture and always thought big. I'm always looking at the next range, the next diversity, the next marketplace and moving the business forward.

However, my husband who is also my business partner (not necessarily something I'd recommend but that is a whole different topic), is the opposite and because of that the businesses work very well. He is concerned with the micro-elements of running the business, the operations, the dispatch, the sales figures and so on, so he has a better idea of what will work and what won't and often we find ourselves squabbling over whether an idea is do-able or not. However, it is essential that there is someone to balance out the bigger picture with a good old injection of common sense every so often!

With regards to investment and so on, I started with nothing, a tiny loan initially and did all the marketing and PR myself. We set off a small snowball and watched it grow - but don't be fooled into thinking it is that easy, we nurtured and pushed that snowball so long and so hard, occasionally pushing it too hard so it crumbled and once we had to completely start again.

I think that it is fair to say that anything is possible but only with extremely hard work, a lot of blood, sweat and tears along the way and a little smattering of luck (although we argue about this all the time as my other half doesn't believe in luck but I do - sometimes opportunities just come along and you have to be able to see them and be able to take full advantage of them).

Every penny earned for years was invested and re-invested back into the business, it takes a long long time if you are doing it the hard way without initial start up funding. My mantra is to do something to promote your business every day.

In answr to RobCCTVs question, I had a failed business. It failed for two reasons - I got caught in an international court case about passing off (they were passing off as us) and rather than let it go, I pursued it through the courts. Despite winning, because it was international we couldn't (easily) get the costs back and so I was left with insurmountable legal fees to pay. Moral of the story - the only people that "win" are the solicitors. Pride should never ever make major decisions when it comes to spending that sort of money.

Our other problem was that we were too seasonal - we had huge peaks in the summer time but it became increasingly difficult to maintain and manage during the troughs - we couldn't downsize (for example) the premises during the down season as we needed the space for production and storage for the peak season and it was hard to keep and motivate staff during the slumps too.

Put those two together and with hindsight we were destined to failure but huge lessons were learned and we now have a healthier business because of it.

[BrightIdeas]

Late last year, I posted 'Did you 'think big' when you first started up your online shop'.... and just wanted to give a little update... and get ideas and input from others who might have been in my situation.

Website launched at the start of April. The business is running from home, which is good for now as overheads are low and everything feels very controllable.

But, I now want to think about the next step in terms of moving the business out of the house. It's very early on, but I think it would be sensible to think about this now so that it's in my mind when planning....

What's brought this into my mind is the fact that I feel like I am quite tied to my home 24/7 at the moment (bit of a tough week!) - tied to the laptop/phone, packing orders and ensuring they're dispatched quickly where needed, waiting in for stock deliveries... If the business grows, I can see it getting even more so...

Now, it's a big step to go from moving from home to business premises. But, I wouldn't need too much storage space as the product is small and I don't anticipate selling huge volumes (small items, higher value). But, it'll be a big move.

I wonder if there's anything that could help transition the business to outside the house before taking the big step?

A middle option for me would be to convert the garage into a dedicated office space/storage area... and make use of an outsourced 'customer service' service (how good are these????) perhaps to make life just that little bit easier. Might make it easier to employ an assistant that way too at some point down the line if the workspace is not... um, my dining table!

Anyway, excuse the rambling... but any advice would be much appreciated.

Thx

[promohouse]

Generally speaking,the first year was the most difficultest.'It is the first step that is troublesome',insist on your 'daydreaming' and go ahead,try your best to make it come true.Hope It will come soon.
No dreams,NO Miracles.
Support you.

-----------------------
Best,

Lee

[FreelanceSoftwareDeveloper]

Late last year, I posted 'Did you 'think big' when you first started up your online shop'.... and just wanted to give a little update... and get ideas and input from others who might have been in my situation.

Website launched at the start of April. The business is running from home, which is good for now as overheads are low and everything feels very controllable.

But, I now want to think about the next step in terms of moving the business out of the house. It's very early on, but I think it would be sensible to think about this now so that it's in my mind when planning....

What's brought this into my mind is the fact that I feel like I am quite tied to my home 24/7 at the moment (bit of a tough week!) - tied to the laptop/phone, packing orders and ensuring they're dispatched quickly where needed, waiting in for stock deliveries... If the business grows, I can see it getting even more so...

Now, it's a big step to go from moving from home to business premises. But, I wouldn't need too much storage space as the product is small and I don't anticipate selling huge volumes (small items, higher value). But, it'll be a big move.

I wonder if there's anything that could help transition the business to outside the house before taking the big step?

A middle option for me would be to convert the garage into a dedicated office space/storage area... and make use of an outsourced 'customer service' service (how good are these????) perhaps to make life just that little bit easier. Might make it easier to employ an assistant that way too at some point down the line if the workspace is not... um, my dining table!

Anyway, excuse the rambling... but any advice would be much appreciated.

Thx

Are you really running out of space or just fed up of been at home? Will it really make any difference if you are stuck somewhere different doing all the same jobs?

As Sysops said earlier in the thread, the step up is a big one. What are your fixed costs at home compared to renting a business premises? I work from home and my fixed costs are less than £100 (£30 Virtual Address at Local Business Park, £8 VOIP Phone Numbers, £40 Insurance), a little bit in electricity and heating but really it's minimal. It's a big step to take on all the extra bills and staff too, even if outsourced.

Before you make any major step ensure your figures really do add up or a slow month could have a major impact on your cashflow.

[movietub]

I have another thread running about the 'next step' in ecommerce.

As regards your original post, I would say that whilst having the marketting and technical sides covered in-house is very convenient, they will not do much to grow the business alone. Obviously both elements need to scale up with the business as it grows. I would say holding at least a reasonable amount of stock, enough to ship most orders same day, is one of the now vital considerations for anyone serious from day one about ecommerce.

I started 4 years ago with literally no investment, it was a true 'spare room' operation with customers waiting an average of 5 working days to get their orders as we didn't hold stock!

We did have plans to grow quickly, and all profits went into building a stock, although this process was painfully slow at the time. In all honesty I don't think it would be possible for us to enter the market today in the same way today. Customers now expect to see items listed as in stock, and most of our customers also pay the extra for next day courier.

Now we have a 6000 (I think!) sq foot warehouse and double the stock we sell in any one month - and as a result our warehouse is far to small now really but we already moved twice. And this is not an 'ecommerce bubble' that myself and many others on here are partaking in, this is just keeping up with the legions of shoppers still converting to shopping online. These shoppers now expect a web shop to have the same level of service, response, stock and security as the high street equivilants.

So on reflection, I would have to say that being serious about ecommerce today, probably requires a similar level of investment as setting up a traditional bricks and mortar shop. The bank should lend to you for stock by the way - so long as you have a decent buy back agreement in place from the supplier(s).

[BrightIdeas]

Are you really running out of space or just fed up of been at home? Will it really make any difference if you are stuck somewhere different doing all the same jobs?

As Sysops said earlier in the thread, the step up is a big one. What are your fixed costs at home compared to renting a business premises? I work from home and my fixed costs are less than £100 (£30 Virtual Address at Local Business Park, £8 VOIP Phone Numbers, £40 Insurance), a little bit in electricity and heating but really it's minimal. It's a big step to take on all the extra bills and staff too, even if outsourced.

Before you make any major step ensure your figures really do add up or a slow month could have a major impact on your cashflow.

Now that I read my last post back, it did sound like I was a bit fed up being stuck at home, didn't it? Actually, that's not what I was really trying to say at all!

My thoughts are actually about scalability - where my time and efforts can be scaled up. In a year's time, I don't see this as being just me working from home by myself. You're right... it's a big step (with a definite increase in fixed costs). I wonder how to best transition from the current situation to moving it out of the home....?

Since my last post, I have contacted an outsourced customer service company who also deal with order processing/book-keeping, and so on. I'm a bit cynical about how good this service can be, in all honesty, but it's good to have an idea of options, I guess.

[BrightIdeas]

I have another thread running about the 'next step' in ecommerce.

As regards your original post, I would say that whilst having the marketting and technical sides covered in-house is very convenient, they will not do much to grow the business alone. Obviously both elements need to scale up with the business as it grows. I would say holding at least a reasonable amount of stock, enough to ship most orders same day, is one of the now vital considerations for anyone serious from day one about ecommerce.

I started 4 years ago with literally no investment, it was a true 'spare room' operation with customers waiting an average of 5 working days to get their orders as we didn't hold stock!

We did have plans to grow quickly, and all profits went into building a stock, although this process was painfully slow at the time. In all honesty I don't think it would be possible for us to enter the market today in the same way today. Customers now expect to see items listed as in stock, and most of our customers also pay the extra for next day courier.

Now we have a 6000 (I think!) sq foot warehouse and double the stock we sell in any one month - and as a result our warehouse is far to small now really but we already moved twice. And this is not an 'ecommerce bubble' that myself and many others on here are partaking in, this is just keeping up with the legions of shoppers still converting to shopping online. These shoppers now expect a web shop to have the same level of service, response, stock and security as the high street equivilants.

So on reflection, I would have to say that being serious about ecommerce today, probably requires a similar level of investment as setting up a traditional bricks and mortar shop. The bank should lend to you for stock by the way - so long as you have a decent buy back agreement in place from the supplier(s).

Yes, you are absolutely right about stock investment. This is something I'm currently looking to increase as having decent stock levels enables scalability of my time - which seems in rather short supply at the moment!

The lead times with suppliers are up to 6 weeks - a long time. Even with the most efficient of systems, it's simply not efficient to have to keep track of lots of multiple back-orders, which often involve multiple communciations with customers to keep them informed, etc.

When did you move from the house to your first warehouse? Did you do anything to smooth your transition? Did you start employing people from day 1?

[FreelanceSoftwareDeveloper]

Outsourcing is worth looking at as an intermediate step, could be admin or fulfilment depending on your product range.

If it just storage space which is a problem you could also look at secure storage facilities in your area, I use one on and off when I have excess stock and it costs £15-30/week depending on the size of the container, no contract involved just rolling weekly.

To scale up you really need to crunch the numbers and initially work out with the increased costs I guess 3 scenarios.

1. What is required to get to a point where it is financially safe, ideally from day one but must be fairly quick to avoid a cashflow crisis.

2. What is required to get to the same position you were in before, making the same profit after the increased costs.

3. What is the potential for the space and extra employee before having to scale up again.

[SIX1]

Not in public, and not by PM until we know each other very well :)

That's good question. I think the biggest one, and the one most people underestimate, is generating sufficient business. I think I was quite fortunate to start off with a reasonable grasp of the numbers involved, having worked in online retail for nearly 10 years. I'll explain.

Say you want to be able to pay yourself £25k.

How much do you think you need to sell per month?

How many site visitors do you think it will take to achieve that?

How much do you think each visitor will cost you to acquire?

How much stock do you think you will need to hold?

Give me your answers, and I'll give you my take on those numbers.

Hint - it's not easy to achieve this from home, unless you have a lot of spare space, or you're going to sell jewellery.

Stock, systems, running costs (salaries, rent, rates, heating).

From experience working for a company that did online sales and from working with a few others on their fulfilment, I'd have to agree that doing it from home is not easy - partly due to space but mainly due to the distraction.

Getting a small office means you can have some normallity to a working week (not that it's going to be that normal for a start-up!).

I agree too that getting sales is the biggest hurdle. Outsourcing the fulfilment is generally beneficial (but then I would say that!) but it has to be done at the right time - it's worth getting a bit of experience at the coal face about what customers are ordering, but it's very easy to get distracted renting warehouse space and employing staff when you should be looking to employ sales staff!

Generally outsource everything that isn't core to your business (but only when it makes sense). In my previous business we outsourced everything we weren't the best at - even the company van was leased. It's all about reducing hassle and selling more, not running round like a mad person trying to save the pennies by doing everything yourself.

James

Six Works Fulfilment
sixworks.co.uk

[BrightIdeas]

Yes, I'm all for outsourcing - although I don't feel that fulfilment will ever be outsourced, as such, for my business just because of the niche that I'm in. But, you know, never say never...

Thinking about things, I believe that the next big step of the business is to employ someone to help and possibly to find extra storage facilities. Hopefully this will be next year when there are sufficient sales to support the extra overhead.

[scm5436]

I have another thread running about the 'next step' in ecommerce.Do you have the link?

Personally I don't think the big investment is a requirement. It's still perfectly possibly to start up a brand new e-commerce business on a shoestring, working from home (assuming you do the website yourself). I guess it depends on how big you intend to become and how fast.

[Mister B]

Personally I don't think the big investment is a requirement. It's still perfectly possibly to start up a brand new e-commerce business on a shoestring, working from home (assuming you do the website yourself). I guess it depends on how big you intend to become and how fast.

That sums it up quite well.

We started three years ago with a five figure investment and are now producting a healthy five figure profit each year.

We have an acquanitance who started a year later with a substantial six figure investment who now turns over five times what we do. Interesting thing is that we're in healthy profit and he's still making a loss.

For sure he's going to get their in a bigger way than us in the near future but at the end of the day it's horses for courses and you need to be realistic about your expectations.

Mister B

[scm5436]

We have an acquanitance who started a year later with a substantial six figure investment who now turns over five times what we do. Interesting thing is that we're in healthy profit and he's still making a loss.

In their case I guess it just depends if they're still paying off large infrastructure costs, but making a decent profit excluding those costs, or if they just have a pretty poor business model that isn't really going to improve - after all anyone can sell stuff at a loss...

I'm sure I could turnover 5 times what I do now if I didn't actually want to make a profit... ;)