E-Commerce Business Plan

[jackiemj]

I am wanting to start an e-commerce, but obviously need to open a business account before I can do this. I have read online that before opening, I would need to present a business plan to the bank of my business idea.

As I have never done this before, I had a look on google and one site lays out all parts of what a business plan should consist of....and some of these are...

Projected turnover and profit? and by when?

Financial Control who's supplying the startup or seed capital?

How long before the business is profitable?

What's the break-even point in services or units sold?for the first 3 years

What are the projected cashflowsincome statementsbalance sheets

How would I know any of this before I even start up??

Any help on creating a business plan that I can take to then bank would be ever so helpful.

Thankyou.

 

[incensed]

Who told you you need a business plan to open a business account?

I did it long time back. But all you need is company registration details and company letterhead and may be other ID stuff.

Also, all banks help in creating your business plan, which is a valuable thing to have. Please do spend some time in making one.

 

[Col66]

Who told you you need a business plan to open a business account?

I did it long time back. But all you need is company registration details and company letterhead and may be other ID stuff.

Also, all banks help in creating your business plan, which is a valuable thing to have. Please do spend some time in making one.

I can confirm that this is correct. I opened a business bank account with Nat West and it took about 15 minutes. I was asked to provide a couple of projected figures, but I had the option to give a range e.g. £1000 - £10,000 - in drop-down menus, so it was pretty straight forward.
There is also the option for 'sole trader' so no company registration details were required.
I received a paying in book and a Visa Debit card after about 10 days, so it really is pretty simple.

I think all the info you said you might need would be for a start-up loan possibly, not a basic business account.

Hope this helps and good luck!

Col.

 

[jackiemj]

Maybe I am reading too much online information

When you say company registration details...is that the details you get when you first register your business name with HMRC? and I didn't think about a letter business head....best get working on that....eek lol

For a business letter head, do I put my home address as I don't have a company address??

 

[StokedSEO]

You don't need a business account to open an ecommerce store anyway.

 

[incensed]

You don't need a business account to open an ecommerce store anyway.

You mean you use your savings account for business?

 

[jackiemj]

I do, because where I bank right now, I only have a current account and they do not allow income from business to be put in them. So I have to look elsewhere to apply for one.

Incensed...I forgot to say thankyou...I take in your advice also.

Col66...Thankyou for that, I shall look into that.

 

[jackiemj]

I can confirm that this is correct. I opened a business bank account with Nat West and it took about 15 minutes. I was asked to provide a couple of projected figures, but I had the option to give a range e.g. £1000 - £10,000 - in drop-down menus, so it was pretty straight forward.
There is also the option for 'sole trader' so no company registration details were required.
I received a paying in book and a Visa Debit card after about 10 days, so it really is pretty simple.

I think all the info you said you might need would be for a start-up loan possibly, not a basic business account.

Hope this helps and good luck!

Col.

Did you have to start your business up first before opening your account with Natwest...as it asks when your business started....but I have not set it up yet...do I have to do that first or does it not matter?

 

[Col66]

Did you have to start your business up first before opening your account with Natwest...as it asks when your business started....but I have not set it up yet...do I have to do that first or does it not matter?

I opened my business bank account about a month after I started building my website - this month was a free trial with my website provider.
When I filled in the form for the bank account I just put in that days date for the business start date. The bank doesn't really care, this is just a formality. The bank is more interested in knowing who you are and that you are not engaged in illegal activity! As long as you can prove your identity and you can give a company name then there shouldn't be a problem!

Col.

 

[jackiemj]

I opened my business bank account about a month after I started building my website - this month was a free trial with my website provider.
When I filled in the form for the bank account I just put in that days date for the business start date. The bank doesn't really care, this is just a formality. The bank is more interested in knowing who you are and that you are not engaged in illegal activity! As long as you can prove your identity and you can give a company name then there shouldn't be a problem!

Col.

Ok understood...thankyou for your help

 

[maris28]

You don't need a business account to open an ecommerce store anyway.

Yes, I agree with this. You don't need a business account to open an ecommerce store. All you just need is to choose which ecommerce software that will run your store.

 

[jackiemj]

That is not what was originally meant when I mentioned about opening a business bank account when you start a e-commerce business....my bank told me that I would need a separate account from my personal one to have money going in it from earnings from a business...and that sort of account, they have stopped doing. So that is why I asked for advice on here and have decided to go elsewhere. You can't be mixing your business earnings with your personal account......I don't think that's a good idea anyway....not sure what anyone else thinks.

 

[StokedSEO]

It's a good idea to have another account for your earnings, but this doesn't have to be a business account. Don't forget there are all sorts of extra charges you get on a business account which don't apply to a personal account (ie you pay more!)

 

[Col66]

It's a good idea to have another account for your earnings, but this doesn't have to be a business account. Don't forget there are all sorts of extra charges you get on a business account which don't apply to a personal account (ie you pay more!)

This is true, but some banks offer 2 years free business banking (Nat West definitely do) so always shop around for a good deal

 

[jackiemj]

This is true, but some banks offer 2 years free business banking (Nat West definitely do) so always shop around for a good deal

Yes, I have noticed they have 2 years free banking. I contacted Nat West today and have an appointment with the business manager next week. They want my last 6 months of statements, jeez....took a bit to find them....maybe it will teach me to keep them all in one place from now on!! I have got 6 monthly statements, but inbetween there is one missing, would they mind do you think???

 

[Col66]

Yes, I have noticed they have 2 years free banking. I contacted Nat West today and have an appointment with the business manager next week. They want my last 6 months of statements, jeez....took a bit to find them....maybe it will teach me to keep them all in one place from now on!! I have got 6 monthly statements, but inbetween there is one missing, would they mind do you think???

I doubt they will mind. Remember, you are the customer and they want your business! Just be clear about what you want - for example, if you require an overdraft facility then they will want proof that you are making good profit and able to maintain the account according to their requirements. If you do not need an overdraft facility then make sure they understand that!

Good luck!

Col.

 

[Chris Ashdown]

One of the best ways to start a business is to visit a bank and ask them what help they can give you as you are looking at starting up a business. They will give you a start-up pack normally a set of software which has spreadsheets on Profit and Loss and Cashflow plus a book on starting up which will tell you how to keep records, work out how to make a profit, break even, sales, marketing and a few other things

When you have read the book and decided what and how you will operate fill in the spreadsheets and see if you can make a living and how much money you will need at any time.

Why worry about free banking you are investing in far more important things

People start with a plan on the back of a fag packet and make it work, or pinch a few customers from their old company, but most are far better if they make a proper plan, as in life never just one way to do something

If you have lost records after a few months what are you going to tell HMRC in another 6 months, they want to see all records

 

[Spearmint]

It's a good idea to have another account for your earnings, but this doesn't have to be a business account. Don't forget there are all sorts of extra charges you get on a business account which don't apply to a personal account (ie you pay more!)

I can see where you're coming from in terms of saving the charges, but how does the HMRC regard personal accounts that are used for business purposes?

I'm at a similar stage to the OP, so this thread is of interest to me, and I'd be interested to know more about alternative accounts to a business bank account, particularly as I too am interested in opening an online shop.

Peter

 

[jackiemj]

I can see where you're coming from in terms of saving the charges, but how does the HMRC regard personal accounts that are used for business purposes?

I'm at a similar stage to the OP, so this thread is of interest to me, and I'd be interested to know more about alternative accounts to a business bank account, particularly as I too am interested in opening an online shop.

Peter

I'm no expert and new to this too and probably at same stage as you...but I think you're right about the HMRC...I don't think they would be happy with folk using the same account for personal and business use.

 

[cody44]

If your selling online via e-commerce website, unless you intend to make payment via paypal only, you will need a merchant account with your bank and I have had a few friends who have found it frustrating getting one. A number of the banks seemed to have closed their doors on the e-commerce traders. Again it will all depend on your financial standing but im sure we could all do with a little lift when starting a new venture!!

If your setting up a business account I know Lloyds tsb will allocate a business manager at the start and he should be able to help you out. Ive been with Lloyds about 100 years now and only last summer wanted to see my business manager but he was based in Birmingham and I am in Liverpool. Want worth the time to travel to him.

Keep at your banks door and dont take no for an answer: they will soon help you along the way.

 

[Spearmint]

Why are the banks against opening a business account for ecommerce traders?

 

[Spearmint]

I've just checked out the current services being offered by the Nat West bank and apart from offering 2 years free banking they are also doing a scheme called the Smarta Business Builder which is basically a package for those involved in ecommerce, so they are hardly refusing ecommerce customers.

The Smarta package seems to be a monthly payment scheme involving moonfruit and Quickbooks accounts package, and it looks okay.

 

[cody44]

I would think because of the higher transaction risk !! I have had two friends who have been flatly declined for wanting to set up e-commerce, one of them was told he is 'high-risk' and they could not consider his application. And yet he has a healthly business already running albeit with an other bank.

I dont know whether this is a regional thing, I hope not as I will be popping thru their doors next month to set up my own 'e-commerce' business and I dont really want to be doing payments via paypal only !!!

 

[cody44]

I've just checked out the current services being offered by the Nat West bank and apart from offering 2 years free banking they are also doing a scheme called the Smarta Business Builder which is basically a package for those involved in ecommerce, so they are hardly refusing ecommerce customers.

The Smarta package seems to be a monthly payment scheme involving moonfruit and Quickbooks accounts package, and it looks okay.

Will put them into my diary (just in case) thanks Spearmint!

 

[donver]

Why are the banks against opening a business account for ecommerce traders?

I agree with it. It's no business with bank. You just select e-commerce software, there are many APP for payment,select the one, that's it.

 

[jackiemj]

Some good advice, thankyou both.
I will definitely be asking Nat West about that next week.
Thanks again

 

[StokedSEO]

If your selling online via e-commerce website, unless you intend to make payment via paypal only, you will need a merchant account with your bank

That's simply not true. You can take credit card payments online using merchant accounts, worldpay, sagepay, paypal and many others. This is nothing to do with your bank account, personal or otherwise.

 

[cody44]

That's simply not true. You can take credit card payments online using merchant accounts, worldpay, sagepay, paypal and many others. This is nothing to do with your bank account, personal or otherwise.

Merchant account = you need an account to pay the money into!!!!!!

If I used Worldpay for example I would need to specify an account for the money to be paid into!!!

Unless worldpay come knocking on your door and hand you the cash!!!!

 

[cody44]

That's simply not true. You can take credit card payments online using merchant accounts, worldpay, sagepay, paypal and many others. This is nothing to do with your bank account, personal or otherwise.

A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of credit card and/or debit card transactions. In some cases, a payment processor or independent sales organization is also a party to the merchant agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank, or through an aggregator such as PayPal, the agreement binds the merchant to obey the Operating Regulations established by the card brands.

So if your going to accept payment online for credit cards using a merchant account - then you do need an account with your Merchant.

 

[Spearmint]

So is a merchant account different to a normal business account, and if it is, do the High St banks offer a merchant bank account service? If they do, which companies are recommended?

 

[Spearmint]

Sorry, in my last message the last sentence should have read.

If they don't which companies are recommended?

 

[StokedSEO]

So if your going to accept payment online for credit cards using a merchant account

Absolutely, the part I was disagreeing with was that it had to be "with your bank". You can pick and merchant account you like, you're unlikeley to get the best deal from your own bank.

@Spearmint merchant and business accounts are different things. I have worked with many stores using paypal, worldpay or sagepay and they all seem to have thier ups and downs

 

[James Copperwaite]

Hi – In terms of a business plan for your e-commerce business, this is a good idea. I think that a business plan is the most prudent and proactive approach that a business may take. Our strategy consultants at Wisteria offer free expert advice and considerations on forming realistic business assumptions before you talk to the banks.

This article might help if you decide to write a business plan.

With regards

James Cartwright

 

[TotalWebSolutions]

Just to add, Streamline will now accept Internet Merchant Account applications from Sole Traders and Partnerships on a personal bank account if the merchant does not have a business bank account. Normal conditions apply in that the merchant has to meet the risk criteria and credit checks etc but this should certainly open things up for smaller online traders who have not got a business bank account.

 

[jackiemj]

I've just checked out the current services being offered by the Nat West bank and apart from offering 2 years free banking they are also doing a scheme called the Smarta Business Builder which is basically a package for those involved in ecommerce, so they are hardly refusing ecommerce customers.

The Smarta package seems to be a monthly payment scheme involving moonfruit and Quickbooks accounts package, and it looks okay.

Hi Spearmint

I had an appointment with the Business Account Manager at Natwest today to open a Business Account, which was successful and whilst there, she mentioned the Smarta Business Builder.

I checked it out and it looked very good, so I have signed up I can use it for 14 days and if not happy, I can cancel, but I can't see me doing that...hopefully not anyway!!!

I'm now looking forward to starting it up and getting my site up and running

 

[Spearmint]

I'm pleased that it worked out for you

Peter

 

[jackiemj]

I changed my mind about the Smarta Business Builder...in the end it just seemed quite confusing as far as web design goes, well to me it was anyway and even though it was a good package of what it offered, I just thought it quite expensive compared to other things around.

 

[TOM@ORANGESOFT]

You don't need a business plan to start a business account. I have business account with HSBC without submitting any such plans.

 

[TOM@ORANGESOFT]

Hi,

You will get good deals Orangesoft. check their website to place an enquiry at orangesoft dot co dot uk

 

[jackiemj]

I'm all sorted and set up now...but thankyou for your help anyway!!!