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Setting up a business

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
in Home, Law & Money
Ok so I make jewellery as a hobby, and recently everyone has been telling me that I should start selling my products. So I thought of ways i could do that- setting up an online shop, hiring a shelf in a jewellery/craft shop etc (if anyone knows of any places in Leeds that do that kind of stuff could they please tell me) and so before I start anything I've a few questions to ask

What do i have to do tax wise to set up this business? does it have to be over a certain amount of earnings before I need to worry about tax?

next question is if i set up a website online, what ways would I be able to set up a "checkout" payment system? are most of these systems bought or are there free ones? I'm a student so i've not got much capital to put into this, as i said it's more like a hobby at the moment but if i can efficiently make a little bit of money out of it, I wouldn't mind.

Any help would be appreciated!

Thanks

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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    First things first, I'd say you'd be better initially testing the market by selling them on ebay or amazon. You'll have more competition, but how much traffic are you going to get on a brand new website?

    ETA: Sorry, that didn't answer your actual question.

    As I understand it, when working out the tax you pay, it's always on all earnings. It would depend on whether you consider yourself self-employed, or whether you set up an actual company. I'm sure someone else will be able to tell you how it works though, because I don't really have a clue.
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    littlemissylittlemissy Posts: 9,972 Supreme Poster
    If you set up a website you could get people to pay via paypal - they don't need an account as they can just use their cards.

    Also, eBay shops are a good way to go. A lot of your marketing is already done for you. Once you get an established clientele the you could take it to a personal website. Or you could do both.

    A personal website business is a difficult thing to try and set up from scratch.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    yeah, I think ebay is the way to go first off! and i looked into paypal and their rates for everything seem to be reasonable. I quite fancy having a go at making a website to promote stuff as well, but i shall have to see what my time and budget allows!

    has anyone got any experience of selling in actual shops? like hiring a shelf n stuff? thanks.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    A promotional website sounds like a good idea because it doesn't cost much to set up, and doesn't require constant maintenance. As soon as you start selling stuff off a website though, then you're into processing orders, credit card and banking charges (expensive), security, and all that stuff. Our company has just set up a website from scratch to do this, and believe me, it's a pain in the arse. And we already have a load of IT support contracts to help us out with it.

    As for shops, I've never done it, but it seems to me that you would have to sell some stock to the shop, rather than hire a shelf for your stock. It would be more hassle than it's worth for most shops to start seperating any transactions involving your products. It's not like a vending machine where you can just offer them a cut of your profits, because all of the money is going through their till using their staff.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Instead of ebay, try etsy.com. It's a selling site specifically for handmade goods, the fees are more reasonable and the listings are for much longer. My experience on ebay is that people want something for nothing and are not prepared to pay what things are worth.

    I once had a stall in the Corn Exchange in Leeds selling my stuff, but to be honest it turned out not to be worth it, cause you had to pay £45 per day to hire the stall, and I wasn't exactly making a killing.

    I'd definitely try the online angle first.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Tax Wise: Call 0845 915 4515 and register as Self Employed, they'll get you registered and will give you the number for National Insurance. You'll only start paying tax once you earn over 5035 per year, but that includes all your earnings (including your job, you only have one set of allowances) if you work as well as the jewellery business it would be a good idea to guess that everything you earn on your business will be at 22%, unless in total with all your earnings you fall into the 40% bracket which is over 33,000 per year (but im not 100% so check, I havent been in work for 2 weeks!)

    You'll be asked to fill in a Self Assessment return for the tax years in which you have this Self Employed income and all subsequent years until you cease. So in theory if you start this work in this Tax year ( 06/04/06 - 05/04/07 ) your tax return will be sent out April 2007.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    well i'm a student and at the moment don't have a high earning job, although i am planning on getting a part time job in leeds.

    Have had a look at etsy.com and it looks amazing, thanks Kaff, think i'll start off there! keep a look out for me, or 丽丽designs.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    How about taking your stuff to a car boot? might not sound that appealing but there are quite a lot of people that go there to sell brand new and good quality stuff. The one near me even has people selling garden furniture made to order!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Since I'm doing work experience for a medium sized website that takes a couple of grand a week, the way it's done here is an order on the internet gets sent to our database which we print off, then we have a machine to key in the credit card numbers to dial the bank.

    However, on a smaller scale, start off with paypal. Best thing to do to start up with craft products is get tables at local craft fares! You'd be surprised at how well you can sell your products here, as everyone will want a piece of it. Obviously on the internet it's a lot more competitive and I would do this when you want to expand it a bit more or to promote your items with the one off sale.

    Some people set up professional websites with everything but they have no hits whatsoever :(. Definately what you want to do (as there is so much competition) is create a loyal support base who will check out your products every now and again / mailing list / etc. etc., as these will drip feed the company with sales. The bigger this 'base' is the better you'll do. Obviously long term you want it as big as possible!!

    But short term try local fairs where you can show off your stuff, 99% of people wont remember you but if you attack labels to your products with a website on then 1% might check it out, and 10% of them might want to go on your mailing list. Say from each email you send out with products, 5% of people buy a product, then for every 20 people on your mailing list each month, you're gonna sell one thing a month.

    If that's making any sense to you at all :p
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