A Guide for Home Business
I’m going to review some common issues for Home Business’s looking offer guidance and ideas to their owners.
With the E-Commerce boom continuing people are continuing to target small market niches with business run from there spare room, garage and basement. These business range from, sell retailers with a specific market which is easily targeted or people selling home crafts to a huge audience via ebay or Gumtree. Of all the people you speak to running such enterprises they all identify the similar issues,.
The Spare Room Stock Cupboard
Having filled the back room with stock, you are now stuck with the difficulty of selling it. If you’ve paid for it all, then you know your margins when setting your prices, but are you confident in how long it’ll take to restock should you sell everything straight away. When investing in your stock, ensure that dialogue is purely about price and quality, you need stock to arrive quickly and well packaged to save your time in preparing it and so you don’t loose a customer who needs products in a week when your lead times a fortnight. This issue often leads to the worst solution, people simply hold more stock, and then as the business grows move into a small premises or similar storage unit, raising costs when all that was needed was better stocking ideas.
A friend operates a small business selling musical accessories for Brass Instruments, his main sales come through Regional organised Contests where he has a stall. For him, sales come in peaks, should he having sold his entire stock of colourful pencils, order some as soon as he returns home, or plan ahead, and order it so it arrives a week before his next sales opportunity. The benefit of buying later is he keeps the cash, which stashed in the bank earning a few percent or kept in case he needs more stock for a more profitable line. This is a simple case of Opportunity cost.
The Am I Doing Well Conundrum.
Having traded for a year, you’ve sold some stuff, you’ve started to advertise on Twitter, and get your name mentioned, people know what you do, but are you doing it well. When I asked my musical friend he replied with well I’ve spent £10,000 on stock and sold £4,000 worth, which is indeed impressive, but luckily he deals only in cash sales to liquidity in that respect isn’t an issue. The question I asked is, how much have bought that you cant sell, when starting a business its easy to start out with numerous lines and quickly have more bits and bobs than you can sell. How much is stock you can’t sell really worth, the answer is its costing you money, you’ve bought it, kept it, advertised it and its takes up space on the trade stand, its getting more expensive the more you think about it. Personally I believe the easiest solution here, could be a simple ebay auction, ebay and paypal will raise costs but opening an auction with a base price to redeem some the costs already incurred, also ebay opens you out to a global market, where the possibilities are endless.
So in conclusion, stop wasting money on stock, get the most out of your stock. Planning your trading might wont make you hugely profitable, but when a supplier wants you to demo a new product, you need space and money for it, which hopefully you’ll now have available so your business can prosper and grow.