New Entrepreneur Help Required

[JasonH8812]

Hi, my names Jason I'm 26 years old, I'm a new entrepreneur looking for some advice from experienced business owners.

My job is going to end within 3 weeks as I was a white goods service engineer due to company liquidation.

I've always looked at different business ideas and now is the time to take control if things and do it, I don't have much capital as a start-up -- £5000 at the most.

I understand times will be rocky but I don't plan to fall off and go back to working for someone else, I'm driven and motivated and good at seeing details on ways to make money.

My dilemma is as I'm sure everyone has done, it's daunting stepping into a different world, I'm guessing there's a lot of pitfalls and road blocks.

I'm looking to learn off someone experienced at running business, I'm looking at importing from china a niche product like the e-liquid for e cigarettes ( except the profit margins don't seem high enough and there's a risk the medical pharmacys take the reigns shortly) and digging in deep to a marketing campaign, I can get around 5k for product and advertising and understand that wont go far.

Any advice is appreciated
Further
If someone wants to mentor me, I would offer 20% of my companies profit after 1 year - I would have a condition that you would not also use the same plan or product for 2 years (so if the annual profit is 20,000 then you get 4000 or better yet if it flies and makes 250,000 you get 50k just for advising - and looking over plans and helping with technicalities)

This is just so you know your not wasting your time - I have every intention of doing everything possible to make my start up run, and profit -- I think the key will be marketing and strongly believe although people get lucky occasionally most the of successful business ideas I've seen has been clever and thought out. This is what I'm aiming for.

All that said, I'm a nice guy to chat to and driven.

Quote of the day :-
Our failure in life isn't that we set the bar too high and miss,
It's that we set it too low and hit it.

 

[japancool]

To begin with, do you have enough money or other source of income to survive 3-6 months without any income from this business?

The e-cigarette market would seem to be very high risk, given, as you say, the possible legislation that could come in. Not to mention, you'll find it difficult to get product insurance and your payment rates will be expensive.

Where will you sell? On ebay, on Amazon, via your own web shop? How many others are there doing the same thing, what's going to differentiate you from them?

£5000 can go a long way if it's spent correctly.

 

[JasonH8812]

I would be able to survive 3-6 months, I've already started doing little bits on the side like delivery driving, buy-repair-sell white goods and the likes to make sure I can live and any income from the business witll 95-100% be recycled back into the business.

eBay would take approx 15% margins same as amazon - I would use these platforms providing the profit margins are high enough.

I would also have a website which ill need to find a way to divert traffic to with SEO

Also depending on the product I would market In person to start with the possibilities of hiring "commission only" sales people to start?

I don't know how to navigate all these things properly and the technicalities and insurances etc - I'm looking into all this but it's daunting as I said.

 

[JasonH8812]

What would make it different from others most likely would not be the product but the marketing --- I don't imagine I would be able to whole-sale to shops etc with such low capital - so it would be a customer product that I will have to market ---

If I'm importing hopefully I will have a decent enough margins to operate --- but mostly it would be marketing -- service offered -- different ways to build a customer base --

A story I read was a couple that bought grass seeds -- they marketed it well and made a multi-million dollar business because of good marketing.

Say it was for example :-

Pots and pans for kitchen wares :-

If I could get the product for $3 a pan

Buying 1000 units for $3000 from china
Say $250 freight or courier charges
Not sure on other charges yet

If I got the pans here for £3000 anyway - and can sell for £10 - £15

Margins would be £7 per pan?

What other charges or technicalities are there? Insurance? Liability if selling in person? Shipping to the customer -

What would be the problems there?

 

[japancool]

*Are* the profit margins high enough?

If you are importing from China, you will have issues with finding a suitable supplier and quality control. There are companies on UKBF who can help you with that, but your orders may need to be sizeable, and I'm not sure £5000, once you factor in your other costs, will be enough but I am no expert on the subject. Personally, as a buyer, I would be very wary of a product like this made in China with no proper controls - you never know what substances might have gone into it! Pick the wrong supplier and you could end up shelling out thousands of pounds for an unsellable product that could leave your business with its startup capital gone and your idea stillborn.

Getting commission only sales-people is well and good, but the offering has to be attractive, that is to say it would have to offer enough income or an income stream. Think about it this way - how many of your product would someone have to sell to make, say £500 a month from it? How much effort would it take to sell that many?

I don't know if you've already looked into it, but the questions to ask are:
* What are other people selling the same items for?
* Can you source them cheaply and reliably enough to make a decent profit after factoring in your costs?
* How many sales do you expect to make?
* And the question I asked above - what's going to make people buy from you instead of from someone else? What's your USP?

I'm not trying to be negative on your idea, these are all things you need to consider.

 

[japancool]

What would make it different from others most likely would not be the product but the marketing --- I don't imagine I would be able to whole-sale to shops etc with such low capital - so it would be a customer product that I will have to market ---

If I'm importing hopefully I will have a decent enough margins to operate --- but mostly it would be marketing -- service offered -- different ways to build a customer base --

A story I read was a couple that bought grass seeds -- they marketed it well and made a multi-million dollar business because of good marketing.

Say it was for example :-

Pots and pans for kitchen wares :-

If I could get the product for $3 a pan

Buying 1000 units for $3000 from china
Say $250 freight or courier charges
Not sure on other charges yet

If I got the pans here for £3000 anyway - and can sell for £10 - £15

Margins would be £7 per pan?

What other charges or technicalities are there? Insurance? Liability if selling in person? Shipping to the customer -

What would be the problems there?

But how will you market it to be different? You still have to have something that differentiates your product from the rest. A black frying pan is still a black frying pan no matter how innovative the marketing is.

You could, for example, target a niche market and tailor your product to that market. For example, if you were selling coffee cups, you could maybe market matching drinks mugs for pet owners (a cup for the owner and a bowl for the dog... hmm, I think I've just come up with an idea for a new venture ).

You would have to pay import VAT as well as any customs duty, if applicable. Depending on what you are selling, you may need product liability insurance.

Have you factored in the cost of quality control and sourcing a supplier?

You say *if* you can get the products for $3 a pan. Can you get them at that price? Are the figures you put realistic?

 

[JasonH8812]

I agree with you, the commission only I could be sneaky on and source a UK based product of value -- say a top of the line carpet cleaning machine -- say its £1000 and have sales people on commission selling for £3000 on a 30% commission base --- then only buy the product after the order forms received. Ok that might be a passing idea for extra start up capital.

USP is somthing ill need to consider more :- I think it needs a bit of creative thinking after I source the correct product.

I did research a company that's based in china who deals with quality control and making sure the companies legit but like you said, I can't afford that yet.

Is it possible to source a supplier myself, without flights to china? Phoning and a sample perhaps?

 

[japancool]

I agree with you, the commission only I could be sneaky on and source a UK based product of value -- say a top of the line carpet cleaning machine -- say its £1000 and have sales people on commission selling for £3000 on a 30% commission base --- then only buy the product after the order forms received. Ok that might be a passing idea for extra start up capital.

If you can get the deal and work it on that basis, great. But for something like that, you have to consider the market. If a salesman is working a local area, how many £3000 carpet cleaners will he able to sell?

USP is somthing ill need to consider more :- I think it needs a bit of creative thinking after I source the correct product.

I did research a company that's based in china who deals with quality control and making sure the companies legit but like you said, I can't afford that yet.

Is it possible to source a supplier myself, without flights to china? Phoning and a sample perhaps?

Sourcing yourself is risky. There are horror stories about it all over UKBF.

Suppose your sample arrives, it looks great and then you place your order and when it arrives, it's nothing like the sample?

Or if you get charged for producing the sample, you send the money and the "supplier" disappears?

As I said, there are companies on UKBF who will help you source reliable suppliers and do the quality control at source for you.

 

[JasonH8812]

I got a few quotes from alibaba that seem to suggest those figures, some were incomprehensible since they didnt understand me very well.

I would find a niche to lock onto I heard an idea somewhere about matching cup and dog bowls :-D

Perhaps a chat privately on phone at some point would be better, ill look more on depth to a viable product and work out how to have a USP

 

[japancool]

I got a few quotes from alibaba that seem to suggest those figures, some were incomprehensible since they didnt understand me very well.

I would find a niche to lock onto I heard an idea somewhere about matching cup and dog bowls :-D

Perhaps a chat privately on phone at some point would be better, ill look more on depth to a viable product and work out how to have a USP

By the way, I'm not offering to mentor you - I'm not an expert, and I'm just bringing up things that I experienced when I was considering starting up my e-commerce business and drawing on the things that other people have posted on this forum, particularly with regard to sourcing from China.

I hope it helps.

Although if you want to give me 20% of your profits, I shan't refuse.

 

[japancool]

Alibaba can be a minefield btw. If you're considering any of those suppliers, you should do quite a lot of research into them before you start handing over any money, to give yourself the confidence that you're dealing with someone legitimate.

Read the threads in the international business subforum, it may give you a feel for the pitfalls.

 

[JasonH8812]

It's all really good advice, and I do appreciate it, I only suggested calling since you have experience and its always good to learn hah, but thanks for rejecting me, hurt my feelings ya know! Hahaha

Ill look into things more and come back, ill need to find the quality control people, I don't suppose you have an idea what they charge?

 

[japancool]

It's all really good advice, and I do appreciate it, I only suggested calling since you have experience and its always good to learn hah, but thanks for rejecting me, hurt my feelings ya know! Hahaha

Ill look into things more and come back, ill need to find the quality control people, I don't suppose you have an idea what they charge?

I don't I'm afraid. MyOfficeInChina is a member on this forum who does this, you could send him a PM and get a rough idea.

 

[JasonH8812]

Ill take your comments and look into a product and USP - all very valid and better to have it planned now - just good to know there's people that can help here. Ill do all you have said for now and come back armed with a plan. Then see how things progress and what the next steps are.

 

[japancool]

Sorry, he's @MY OFFICE IN CHINA - he should see this thread now that I've invoked his name.

 

[ethical PR]

Princes Trust offers free training mentoring and small loans to under 30's who meet their criteria have a look at their website.

 

[JasonH8812]

I started looking into different funding options earlier and seeing what options there are. The only thing I fear is if my personal credit effects this decision. I mean I've been an upstanding citizen paying everything the last 5 years. But before that not as much and in turn it didnt do my credit score wonders.

Do you know If they take personal credit reports into account?

 

[MilesWeb]

I would like to mention that there are risks involved in business. It is important to take calculated risks instead of playing safe all the time.

 

[MOIC]

Hi Jason

I have just read the thread this morning.

You seem articulate and well balanced with your views.

I am more than happy to give you free advice and free help if you require it.

I actually admire young people like yourself that have a positive attitude and are determined to succeed.

However the reality is that business and expectations are never as simple or as profitable as you may think initially.

Having said that, your attitude is correct and thats the most important attribute to have at this stage.

Please feel free to send me a PM or email me directly at: [email protected]

I look forward to helping you, where possible.

(Thanks japancool for the mention)

Regards

Ron

 

[japancool]

I would like to mention that there are risks involved in business. It is important to take calculated risks instead of playing safe all the time.

Calculated being the operative word here. Of course there are risks, but it's simply common sense to understand what those risks are and try to reduce them.

 

[japancool]

I started looking into different funding options earlier and seeing what options there are. The only thing I fear is if my personal credit effects this decision. I mean I've been an upstanding citizen paying everything the last 5 years. But before that not as much and in turn it didnt do my credit score wonders.

Do you know If they take personal credit reports into account?

Depends on where you are trying to get your funding from.

I was able to get a £3000 overdraft on a business account with HSBC (for my limited company) without providing a director's guarantee, meaning that I would not be personally liable if everything went belly up. It's worth asking them. You should though be prepared to put some of your own money in as well.

 

[Excel Expert]

Going back to your original thread, what about continuing as a white goods repair man but under your own name? Could you get your employers database somehow.

When people are making do and making things last longer I would suspect this would have a regular turnover and repeat business.

Buying and selling different things all the time means you have to keep reinventing your marketing and starting again (skipping through this thread I see mentions of e-cigs, pots, pans, cups, dog bowls). Each time you change market you have to start again and depending on how you sell that could be costly and time consuming.

 

[japancool]

Going back to your original thread, what about continuing as a white goods repair man but under your own name? Could you get your employers database somehow.

When people are making do and making things last longer I would suspect this would have a regular turnover and repeat business.

Buying and selling different things all the time means you have to keep reinventing your marketing and starting again (skipping through this thread I see mentions of e-cigs, pots, pans, cups, dog bowls). Each time you change market you have to start again and depending on how you sell that could be costly and time consuming.

To be fair, the cup and dog bowls was a tongue-in-cheek suggestion by me.

 

[Excel Expert]

LOL, Got that JapanCool - I was just using it as a way of highlighting the dangers of flitting from one product to another just because it is "cheap"

 

[japancool]

The other thing I will say to the OP is, if you are going to sell, then make sure that it's something you find interesting. There's no point in selling matching dog & owner bowls if you can't stand animals, because you won't be motivated enough or know the market well enough to come up with a suitable marketing strategy.

 

[The Byre]

Going back to your original thread, what about continuing as a white goods repair man but under your own name?

This is the obvious statement!!!

The very moment e-cigs are deemed by the EU to be a medical product, your company, your stock and your built-up trade and purchasing arrangements are totally worthless!

At least, when repairing a Bosch dish washer, you know what you are doing and you have the tools, plans, repair schedules and circuit diagrams to hand.

And you can augment your servicing income with sales of used white goods that you have fixed up, resprayed and fitted out with new bearings and seals. Give folk a three month guarantee and you can charge a small premium and might even run the risk of making a profit!

With the right marketing in today's economic climate, you could be on to a winner here!

 

[Excel Expert]

From a learning point of view I'm guessing the OP has more experience of fixing these things than selling any random type of product. This means if they sell random products it will mean learning to set up a business plus learning about a whole new product. Where as utilising his existing skills means the only new thing to learn is running a business.

There is of course nothing stopping the OP doing both. No doubt if they do the repairs they will need a workshop / storage area which could also be used for the buying and selling element.

BTW, without knowing the in's and out's this is just mind storming and chucking thoughts out there.

 

[Chris Ashdown]

Sorry not read all of the posts, but why dont you go freelance repairing white goods, low start up costs and good rates of pay

Smart van and uniform, small ads in local paper maybe a web page and you are off

 

[city_web_studio]

Welcome to the world of Entrepreneurship - ( read welcome to the cold )

Few suggestions based on my experience:

1. Before you import - try and sell the item on ebay - or wherever your plan to get orders from. This will give you idea of actual demand and competition.

2. If you get some orders then only get the stuff imported otherwise there is substantial chance of getting inventory.

3. Don't put all the money in one product rather first try several listing of products and see which one actually works.

4. For small quantity you may not import directly but may buy locally.

Understanding customer behaviour and market potential is the key yo success - first spend sometime to discover the same.

Giving away 20% profit for mentoring is too much to give . look around you may find good people who will be ready to help you for free.

All the best.

 

[Deleted member 226268]

I'm looking at importing from china a niche product like the e-liquid for e cigarettes ( except the profit margins don't seem high enough and there's a risk the medical pharmacys take the reigns shortly) and digging in deep to a marketing campaign, I can get around 5k for product and advertising and understand that wont go far.

~~~~~~~~~~~~~

Seems to me that importing ANYTHING from China is a dodgy choice
especially when you have little money to risk losing to scammers.


This article put me completely off even THINKING about using Ali-Baba, etc.

buyingfromchinaisrisky.blogspot.co.uk/

regards dave.

 

[Ziad]

Hi Jason.

Lots of great pointers already mentioned.

How do you feel about internet marketing? Starting off with minimum risk (If anyone tells you there is NO risk then they are lying to you as EVERYTHING has risk, but some things more than others) where you can advertise ANY product or service you want?

I'd be happy to show you what I have recently started doing online and already started to see results (nothing ground breaking yet, but I have only recently started) but I am making a small profit, which is a good start!

Feel free to call me on 07967 013 989 if you'd like to have a chat about it.

All the best
Ziad

 

[MOIC]

Seems to me that importing ANYTHING from China is a dodgy choice
especially when you have little money to risk losing to scammers.

Simple answer.............Don't use scammers

 

[Jet Virtual]

HI Jason I would be happy to offer my advice free of charge. Call me on 0207 183 4766

I must warn you though, no fluffy stuff. If you're ready to work hard and earn a living then you will be ok.

 

[Ian Shorrocks]

Hi Jason. I'm new to this as well. I'm just in the process of setting up, but in exports, fortunately I am lucky enough to be married to someone who is from the area I wish to export to.
I don't think I'm anywhere near as qualified as most of these guys to advise or mentor you. However I do run my own building company and have done for over 20 years, so I do have some experience of pitfalls to running your own business, I've fallen down most of them at some point.

My first piece of advice is "don't give up the day job". I know you said you were being made redundant, but as was mentioned earlier, maybe you should try setting up in business, in white goods repair. There is a big market for it, as long as your prices don't exceed replacement costs.
Advertising can be done fairly cheaply, use of social media etc. Be wary of cold call advertising companies(lots based in Manchester) Also companies offering prime internet positions seo/sei and such like, it can cost a mint.

Second piece of advice, if you're going to start this import business do it in your free time and on a small scale to start, to get a feel for the market, and iron out any logistical/financial problems, without risking too much capital.

Most of the people on here seem genuine and honest, but remember, and I'm not referring to people on here, but out there. Be wary of everyone, especially where it involves you parting with your cash. If they're selling they're not doing it for fun. Some of these sales guys "could sell sand to an Arab", "snow to an Eskimo" and so on.

Not sure if I've been of any use, didn't mean to be too negative, would just like to offer my support and hope it goes well for you. Feel free to drop me a line let me know how you're doing, or just want to chat to someone in the same boat as you.

Regards

Ian

 

[japancool]

Second piece of advice, if you're going to start this import business do it in your free time and on a small scale to start, to get a feel for the market, and iron out any logistical/financial problems, without risking too much capital.

As well as this, use the likes of ebay to do some market research to make sure that there is a demand for your product before you start getting a large amount of stock in.