Is starting a business worth it?

[martian000]

Hi,

I am relatively young and would like to expand my horizons regarding ebay and ecommerce sales, but it seems to get the "best deals", I would need to register as a business to get the maximum benefits from certain wholesalers etc.

I'm not even going to pretend I know the details, so I need advice on this.
How do I establish myself as a sole trader? Is it easy? Is it costly?
Once I do, do I have to do anything else if my turnover will most likely be low (I'm not intending to make a lot of money)?
How does VAT registration work? I would likely be exempt from it due to the low expected profits, but do I need to keep detailed accounts of my purchases/expenditures and incoming finances?

Also, if I choose to register as a business to my home address, where I reside with my partner, will that impact anything on his side of things?

I apologise that this is a super basic post and I'm sure people will likely dissuade me from starting or trying anything because of my lack of knowledge, but I am asking because I want to learn in a friendly and easy-to-understand way.

Thanks for reading!

 

[Mr D]

Register with HMRC, takes a few minutes. Instant sole trader.
VAT registration you have to do when your turnover (what the buyer pays) approaches £85k in a rolling 12 month period. You either keep below the threshold by not selling for a while or else you register and become an unpaid tax collector for the government. In your first year or even first few years its not likely to be a problem. Profit doesn't come into VAT registration, its just about your business income. Can make a loss and have to register if you hit the limit.

Yes you need to keep detailed accounts of your incoming and outgoing business finances. Spreadsheet or one of the commercial bookkeeping programs can be used. You need to be able to say to HMRC the income of the business was this and the costs of the business was this.
Its also a VERY good idea to know yourself what the business income and expenditure are on an ongoing basis.

Registering at home does not appear to be a problem for people. Insurance perhaps, home insurance doesn't usually cover business stock.

 

[martian000]

Register with HMRC, takes a few minutes. Instant sole trader.
VAT registration you have to do when your turnover (what the buyer pays) approaches £85k in a rolling 12 month period. You either keep below the threshold by not selling for a while or else you register and become an unpaid tax collector for the government. In your first year or even first few years its not likely to be a problem. Profit doesn't come into VAT registration, its just about your business income. Can make a loss and have to register if you hit the limit.

Yes you need to keep detailed accounts of your incoming and outgoing business finances. Spreadsheet or one of the commercial bookkeeping programs can be used. You need to be able to say to HMRC the income of the business was this and the costs of the business was this.
Its also a VERY good idea to know yourself what the business income and expenditure are on an ongoing basis.

Registering at home does not appear to be a problem for people. Insurance perhaps, home insurance doesn't usually cover business stock.

Thank you for the reply!
I'm considering using a service like Xero for the accounting side of things or learn how to do it myself (my partner's dad has his own business) so I'll have to ask him.

Setting up a business to be able to make a little more money seemed like a task too big for me to manage on my own, but it sounds like its a lot simpler and easier than I had anticipated! I might just give it a go if all seems good.

 

[Chris Ashdown]

You don't have to be limited company to get discounts in the majority of wholesalers . The normal system if you can call it a system is the more you buy the larger the discount may be (not all companies offer discounts), This discount can be either

You get a individual discount for the size of each order after a trial period so small ordered get no discount and orders over a pre set amount get a discount, the level of which is dependent on the amount spent

Or they assess your value to them over say 3 to 6 months and then give you a fixed amount discount on all orders be they large or small

EBay and Amazon are good places to start with using PayPal as the way of collecting money and expect their charges to be about 14% of any sale price (not as bad as it looks at first as you have no advertising or shop premises to pay for)

 

[Mitch3473]

Running a business is not rocket science, nor is running a successful business, you're relatively young, go for it and make your mistakes now when they dont count as much. What did you have in mind as a business model ?

 

[LiveNetworks Ltd]

Before you commit to Xero, try Wave Accounting. totally free and done the job for me for the last few years.

 

[marry smith]

Yes, its worth it. But before starting you should how to run a business. In case you don't know, you have to learn them first and then start your business. you also need to know the market value of the business which you are most interested.

 

[Mr D]

And the way to learn a business is often to run a business. If had to learn all about running a business before running a business you'd have 6 or 7 doctorates and be in your 50s.

 

[Mitch3473]

Yes, its worth it. But before starting you should how to run a business. In case you don't know, you have to learn them first and then start your business. you also need to know the market value of the business which you are most interested.

You cant really learn how to run a business, there are too many variables ( I'm sure some on here and the guys at Harvard will disagree ). . Sure, there are books and courses, mainly by shiny suited salesmen stating the bleeding obvious......Get stuck in, get involved, talk to people, you'll make mistakes but you're young and you'll learn the best way possible with hands on experience.

 

[Chris Ashdown]

Regardless of the above advice , buy a copy of "Starting a business for dummies" it will explain all you need to know, it wont make you a expert but will enable you to plan and run a business as a start-up

 

[Mr D]

Regardless of the above advice , buy a copy of "Starting a business for dummies" it will explain all you need to know, it wont make you a expert but will enable you to plan and run a business as a start-up

Yes, its a very general book but good for people who don't have that knowledge and there are a ton of books, youtube vids etc in more detail on aspects.

For those attending trade shows there are often seminars / talks / demonstrations of particular things relating to business.

 

[Mohamed IBrahim]

I would stay plan plan plan and study the market very well before making a decision

 

[Dimo]

I have been on Ebay since 2001. It's grown massively and pricing on many products is so competitive some must be loss leaders. Run searches for what you intend to sell, review your buying & selling prices, your postage costs and fees. For some it's profitable, for some it's economic madness.

 

[Anders Jorgensen]

Getting registered for business is a simple process. What you need is a plan though! The best would be to find that course that has a track record for success that simply works. Then it is a matter of getting it and apply it.

So if you want to do Ebay find the best course on that. Amazon the same etc.

I have been live with my web shop for 2 months now and I know what to do to grow as I have the working strategies to follow and I get traffic + sales as it works.

Having a goal on how much you want is essential to drive you to do it and keep you focused on growing your business every day.

 

[Cristina Stan]

When i started to sell products on eBay first thing I've done was build a plan, literally with a piece of paper and a pen in my hand. Write down everything that shows up in your mind that you need to do for your business to start running, all the details, then sort them out and start looking for the best offer that suits your needs. Having a goal it was an important aspect that made me move forward quicker.

eBay is much more flexible for startup business than Amazon, which they are very strict and a bit more complex.

If you import products to sell (like from China, Aliexpress, Alibaba etc) there is a Import Fee that you will pay.

 

[youngtrepreneur]

And the way to learn a business is often to run a business. If had to learn all about running a business before running a business you'd have 6 or 7 doctorates and be in your 50s.

This is probably one of the most practical and useful posts I've seen on this website in a long time.

There are so many 'gurus' on this site who no doubt make a bit of money from their own ventures, but who frankly seem to get their advice from watching YouTube videos and reading pie in the sky academic orientated magazine articles, then writing on UKBF as though they're some kind of business guru themselves.

Yes, make sure you know what you're doing and where you're going. Think about what problems you might come up against along the way and how you might handle these or avoid them completely. Ask others for advice.
But there's no need to engage in a needless administrative exercise and write an 80 page business plan.

Get out there and do what you need to do

 

[Mr D]

Thanks.

While not a fan of the 80 page business plans, for a small business even having a 5 page plan can be a useful map.
Out beyond the border of the present, 'here be dragons' - a map of how you plan to go forward into the future with the business can be useful to keep a business on the straight and narrow. Or at least tell you something has gone wrong.

And we can get stuck in on making mistakes or avoiding mistakes as we choose.

 

[Chris Ashdown]

It's really a case of two options

1 jump in head first and maybe you will swim and succeed

2 you study the competition, asses the costs and potential profits and make a plan without the crap of corporate statements and so forth. You try different senario's on a spreadsheet to see what happens if projections change and last but most important make a cashflow projection from the spreadsheet to see if or when you are going to run out of cash (cashflow is the largest cause of companies going bust)

Cashflow is not just running out of money due to poor sale it also works for fast growth of sales, you expand rapidly and typically end up with orders that you don't have enough money left to pay your suppliers with to get the goods to meet the orders, among other options

 

[Socio South West]

There's lots of good advice out there... the problem is you won't find out what is good advice and what is not before you are doing it, and I agree with those who say that learning on the job is the way to do it.

The most common failures I see with businesses and business plans I Iook at is firstly to underestimate what it costs to run a business properly and secondly the Business Owner fails to reward themselves for their enterprise, and often goes on putting money into the business way beyond the point of economic sense.

There is great satisfaction to be gained from running a business, and its not difficult - but almost always for the sole proprietor it is better to sub contract some of the non earning tasks such as book keeping to free yourself up to concentrate on the earning parts of the business.

 

[Jesse Webster]

Start your business while you are still young because you have enough time for trial and error.
Assume that this setup can continue indefinitely and that you enjoy the work. Wouldn’t you want to reap the accompanying rewards for as long as possible?

If so, start your business as early as possible. Yes, it’s an optimistic scenario, but an achievable one, even if it takes you two or three tries to build a successful enterprise. The bottom line is, the more time you can spend as an entrepreneur, the better long-term returns you’re going to see.