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Starting Up A Small Business

Today's blog post is a bit different to my usual ones, whilst still linked to my products this is more of an advice piece for anyone thinking about starting up their own business. By no means am I an expert on running a business, but hopefully something here will help.


Now that I've been running my business for a few years I thought I would put together a blog post describing things I've learnt along the way. I'm hoping that this might help to prevent others from making some of the mistakes that I did early on. Undoubtably I still have many more mistakes still to come as we're always learning, but this is where I'm at so far. Hopefully you'll be able to pick up some things that have worked well for me too.



Over Stocking


This is quite possibly the biggest and most costly mistake I've made so far. How this began was down to my excitement of starting out with my business, because who doesn't get carried away, right? I bought multiples of many different products that I absolutely loved because why wouldn't they sell with how awesome they are?


Here's the thing, trends change all the time, something that's really cool and 'in' this month may not be the case in 3/4/6 months time.


An example of something like this for me was when covid struck, no one was spending money on non-essentials but the sales of face masks were understandably very high. So I got some really cute face masks made with my images on. The issue with this? I decided to do this too late, and the best price I could find meant I would've had to sell them at £3 each just to break even. When ordering them I thought this was reasonable, because I didn't do my research. Most facemasks were being sold for £1-£2, you could even get a pack for a few pounds. The result of this? I sold 1 face mask, and naturally I bought way too many and spent £90, so now I have to figure out if I could turn them in to something else to recuperate some of the cost, but it is likely that I will lose a lot of money on them.



Also, just because you love something doesn't mean that everyone else will too. My advice would be to write a list of all the things you plan to sell and then select out your absolute favourites. Then research to see if it's being sold right now and how popular it is.


Then you can ask yourself some very important questions.

If it's not currently being sold, is this because you've found something new, exciting and totally unique? Or is it because it's not something the market is looking for?


If it is being sold, what makes yours different? Why would a customer choose yours over everyone else's that's already out there? This is especially important when the item is being sold by big companies. They'll be able to sell it cheaper than you and customers will more likely trust a brand they know more than someone who has just started running a business from their home.


Still think it's worth selling? If this is the case and you have thought of why your version is going to be super popular, then start small. You don't need 100 of them to start off. Start your marketing to create some buzz for your product (especially if it's handmade and might take a while to make).



Profit Margin


This isn't going to be where I can tell you exactly how much to sell your products for, or what percentage to add on to your expenses. When starting off a small business you may not make a lot of profit right away. Start by aiming to at least break even.


When I say this there's many things to take in to consideration. Your expenses are the first.

How much did it cost you to make/buy the product?

Are there any transaction fees to take in to account? (This can be online and selling in person if you're using a card reader)

How much will it cost to pack and post your item? (If selling online)


Then there's the time it takes you to make your products. Here's the thing, currently 3 years in to my business the cost of my products do not take in to consideration the time I put in to them.


The reason? I'm finding that people won't spend that much on what I'm selling. This isn't ideal of course, it pretty much guarantees I will always need another job running alongside my business. This is also where your research comes in, if I had known how little people generally value photography these days then I may have made very different decisions early on. Unfortunately in the reality of the modern age, where most people have a pretty decent phone camera, they feel like they can take just as good photos themselves. I won't go in to the details of why I disagree with this.



Pricing Your Products


Taking everything in that I've just said, deciding on how to price your products can be really tricky. Before covid hit my products actually sold rather well, they covered my costs and I had a little extra wiggle room to offer a small discount if someone was on the edge of whether to buy or not. This can help with online sales as well, people will notice if you put the price up to then be able to say it's 'x% off', I also feel that marketing it in that way isn't fair on customers. So if you know you'll want to offer a 15% discount around Christmas for example, then make sure there's that much extra in your profit margin in order to do that. You can also offer small discounts to encourage repeat customers without resulting in selling for less than what it cost you.


These days when everyone is being much more careful with money sales are really struggling and I'm actually selling my products for less than what they cost me. Hopefully this won't happen in your business by my frame of mind right now is that if it helps to increase sales then it helps with my over stock and gets me through to hopefully a better time when there isn't a financial crisis going on. This is also something to keep in mind when deciding on what to sell. There are products that people will consider as essential and others as luxuries, and at times like these people will spend a lot less, if anything at all on something they consider as a luxury item.



Marketing


I'm not going to lie to you, marketing is really hard work. I've found that a lot of online marketing I do just gets lost in the vast amount of posts on social media. I've tried boosted posts through Facebook and Instagram, Google Ads, ads through my website and through Etsy and Ebay. Generally I've found that none of these have worked for me, if I had a bigger budget then maybe they would, but I don't have a way of testing that.


I have also tried posting out leaflets with a discount code to a few different addresses in the UK however so far this has also been unsuccessful. It may be that the amount I sent out just weren't enough, I also realised when trying this out that posting leaflets out is actually really expensive.


Improving your site's SEO (search engine optimisation) is essential for getting people to your website. Now I'm no marketing guru so I can't go in to masses of detail, but you need to make sure you're including great search terms and keywords on your pages. Basically, what will someone type in to Google in order to find your product?



Email marketing is also a great way to reach customers and let them know about upcoming sales and new products. A great incentive is to offer a little discount if they sign up.


So other than telling you what hasn't worked for me I'm afraid I can't be of much help on the marketing front. Of course you can hire companies to do the marketing for you if you have the budget to do so.



Craft Fairs


Honestly I've found craft fairs can be very hit and miss. I have found that it was definitely better before covid, as I feel everyone is still wary of touching things, understandably. I also hope that things will improve soon and more people feel comfortable attending markets again.


I can tell you that it can be pretty disheartening standing there all day for about 10 people to come through the door. Although my no.1 tip if this does happen - make friends with the stallholders around you. Actually that's my tip regardless of whether it's busy or not. This way you have someone who will keep an eye on your stall for you if you need to stretch your legs and pop to the loo (and vice versa), it's also a great way to network and let each other know when you hear of fairs that are in each other's locations. This will also give you someone to chat to when there's no customers around, especially if you're by yourself.



However even with how things are at the moment if you still want to give fairs a chance then I do have a few tips.


There can be good and bad organisers and that can hugely impact how a fair turns out. Always research reviews for the company that is advertising the fair. Generally a good sign is if they straight away give you all the information you need without asking, usually as part of the booking form. Eg, parking information, if the table is provided, an event page on Facebook, Wifi information (for card readers) how they're going to advertise it, the stall fee and whether or not they restrict what stalls they agree to having due to preventing duplicates.


Generally I won't go for a fair if they don't prevent duplicate stalls, I once did and there were 3 photographers, 2 painters and someone who did wood engraving of animals (similar subject to my photography). This is not only unfair to the customers as they have much more limited choice of stalls to shop from, but also unfair to the stallholders. Having so many similar stalls will really negatively impact your sales.


Another thing to look out for is if they say the stall fee is free but they'll take a % of your sales on the day. That's of your sales and not your actual profit, which could mean you make nothing for the day. I generally don't like this way of running things at all and wouldn't touch fairs like this with a barge pole! Your sales should be yours to keep. On the flip side of this if you don't get any sales for the day then the table hasn't cost you anything.


Think about the location and how long it will take you to get there. I've ended up booking fairs that with the travel and packing/unpacking the car has become a 12 hour day. And if you work full time like I do, that's quite a lot taking up 1 of your days off. There's also no guarantee that you'll sell anything (unfortunately this happens) so that's a really long day for nothing in return. The location matters big time, what is the parking like? Is it close to a lot of other shops and businesses where there could likely be a lot of people walking around? Or will they have to drive out of their way to get there? I wouldn't opt for the ones people have to make a special trip to, because quite frankly, they wont. Would you?



The cost of some fairs can be really high, I've had some cost between £40-£60 for one day. Just think that you then have to make that back just to break even. Some times these may be worth it (although I haven't found this to be the case so far), the most I've gotten in sales from one of these is £35, then add petrol and parking and you can imagine it was a pretty big loss. On the other side at a £20 fair I had sales over £60.


Don't get me wrong there isn't really anyway to guarantee a fair will be a success, even if you follow all the advice you can find, sometimes you just have to chance it. Generally fairs that have other things going on at the same time, like a dog show or something, that helps to bring people in. But say if there's a kids funfair then all the adults will likely be busy entertaining their kids with all the activates (understandably) and won't have time for shopping.


A few other small tips would be before you do your first fair measure out a space on the floor the size of your stall table (usually 6ft wide x either 2 or 3 foot depth), or use a table that is that size if you have one. Then organise how you want your stall to look. This can really help with organisation and nerves on the day of your first fair when you already know what it will look like. Then take a picture of it and take pictures of your table set up when you're at fairs, this can help you think of changes to make and is also great for updating your social media. A table cloth is always nice to have as it just looks a lot nicer than the table itself.


Also take with you both hand sanitiser and antibacterial wipes. Some stallholders put sanitiser on the table for customers to use if they want to, but you may also want it yourself. The wipes are for when undoubtably you'll get a small child put their hands in their mouth and then wipe their hands on your products. Also if people sneeze or cough in to their hands and then touch your products you may want to give them a wipe over to prevent the spreading of germs.


If you have leaflets or business cards fairs are a great place to hand them out to customers, this will hopefully get them to visit your online store regardless as to whether they buy anything on the day or not.



Selling Online


One thing I did wonder when I started out was whether to sell from my own website or sell through well known sites such as Ebay or Etsy. Over the years I've actually tried out all of these, plus having my items linked to Facebook and Instagram.


With Ebay initially I had no luck at all, and I soon felt that perhaps that wasn't really the place to find my market. However I have recently linked my website to Ebay which doesn't cost me anything extra, and has brought in a couple of small sales, and every little helps.


I have good and bad things to say about Etsy. It's a place I love to shop, and I felt it was much more suited to my products than Ebay. The biggest downside is the fees. Whilst the initial listing fee is cheap, you have to pay that every 4 months for it to keep relisting, and if you have a lot of items this sure adds up. There's also fees when you make a sale. A transaction fee, a VAT fee and a relisting fee (despite the item still being in stock, they'll still charge you the relisting fee) this ends up taking out quite a chunk of your sale price, meaning you'll have to put your prices higher to accommodate these fees. However it might help you reach more customers than say, your own website.



For my own website I have the major positive points being that I have complete control over the look and functionality. There's also no listing fees, however the costs of running the site does get quite high. The transaction fee I find is also a lot lower than the other sites.


You also have the difficulty of getting people to find your site, and if you're a small business this can be very tricky (hence my section on marketing). There's also the fact that as customers may not know you or your business, this may prevent them from purchasing due to lack of trust. Who isn't worried about purchasing from some online sites? I certainly am. To try and gain trust I add my customer reviews to my site, have a photograph on my about page so people can get to know me, have links to my social media pages and make it clear how customers can reach me. Also make sure your delivery, returns and T's and C's are easy to find. Hiding this information is not helpful and will cause customers not to trust your site.


One other thing my site is missing that a lot of customers usually like is a contact number. The only reason I don't include this is because of working full time along side my business. This means that during usual work hours I have no way of answering phone calls, and I wouldn't think customers would appreciate calls being returned out of the usual work hours. However I do have my email address and a contact form so hopefully that is enough for my customers.


If you've read all of this then I do appreciate you taking the time out of your day, this is quite possibly the longest blog I've ever written! Hopefully something I've mentioned will help you either with your business or with your decision to set up a business to start with.


Whatever your current situation is, I wish you all the luck.


Sonia


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