Trying to start my own business.. Advice?

[Quattro]

Hey Guys.

I don't feel comfortable posting this on any other forum but this one because I trust you guys and girls (well the one or two girls around here).

Well basically, I'm trying to start my own business selling computer hardware.
Yes I realise there are so many e-tailers like this already online, but I will focus quite strongly on second hand stock as well as new stuff, so most of my stock will be from the Classifieds in UK forums.

But anyway, I will also be selling new stuff. Problem is, I can't calculate my prices because I don't know what import taxes there are in the UK, someone told me that he doesn't think I will have to pay import tax, just VAT @ 17.5% plus maybe a customs handling charge, items will be deliverd through UPS (If that changes anything).

But also I don't really have a lot of money to start off with.
Do you think it would be wise for customers to "order" their item without paying anything. Then once the order list has reached the minimum shipment I could contact the customers and explain item in now available, do you wish to purchase, should be with you in 10 working days.
I have a website being built for me right now.

Well this is my plan.

I am welcome to any advice, comment or contructive critisism (sp?), but don't just mindlessy flame me. I know you regulars won't but the newer people might.

[nakatalee]

i would suggest writing a business plan and setting milestone to keep you focused on your business. Starting a business is not that hard, but to keep it running for the next crucial 3 years is a challenge.

Good luck.

[seadave77]

Good luck on your business because you're going to need it. From your post it sounds like you need to research more. You said you don't know what the import taxes are or if there are any. You should know. I'm not trying to be mean but I think a little more research is in order. Also I don't think it is a wise idea for people not to pay when they order. First it will be confusing to the customers on exactly how it works and second it will be harder on you especially if you do not have a lot of cash.

I ran my own business and the thing I learned was you need to have the time to do it. If you don't have the time then don't bother.

Good luck,
Clint

[Quattro]

Okay. I'm going to phone customs tommorow.

[Jab-tech]

You also need to look into buying products from UK distributors.

If you import from another country its classed are grey market and you will have little to no warrenty for the product in the UK.

The easiest way to find the distributors is to look on the manufacturers pages for legit distributors in your country.

[CrystalMethod]

I don't think you should be importing stuff (for the new stuff anyways). You should be looking into local distributors for that kind of thing. Some of the larger distributors have HQ's worldwide.

[Quattro]

Yeah there are.
But they are such big companies they are selling them at minimum 100-500 units a time and I can't afford that.

So I've found a company that buys from the big boys in the hundreds then sells them on in the 10s, which is more affordable.

[Sun_tzu617]

I think you should look for investors/partners.... usually thats what a company does, a group of people ionvest money, and walla, u can afford to build...

[Quattro]

I know... but where do I find investors?

Would a LAN Station be interested or should I ask individual people?

[Jab-tech]

Yeah there are.
But they are such big companies they are selling them at minimum 100-500 units a time and I can't afford that.

So I've found a company that buys from the big boys in the hundreds then sells them on in the 10s, which is more affordable.

Never heard of a distro wanting to sell me hundreds.. I can buy 1 CPU or 1 Motherboard or even 1 Pack of DVD-R disks...

[nakatalee]

you can try the circle:
1. Family
2. Relatives
3. Friends
4. Someone that share your mind

But if you have a good business plan, you can present it to get loan from bank or others.

[Sun_tzu617]

bank is good, but interest sucks... Google was private... look at it now :D Wasnt alienware a provate owned company? its doing great...

[Veland]

And the scary thing is that to grow, you have to invest. Both time AND money! A lot of money..

You want happy customers? Then thay want good prices, good service and they WILL call you when something is wrong. Also because of their stupidity.. So you need financial backup to handle repairs/refunds and such stuff.

If you don't invest, it won't be "a big thing" but rather a hobby shop on the side and eventually die..

I'm running a business with two friends of mine, just as a hobby, and it IS hard work getting it running! Took us 1 year to figure out all the small stuff. But now we're running, but only as a hobby. Fun to have our own business!

[musawi]

You got to spend money to make money.

[diggingforgold]

Starting a business is great. It's kind of risky and will take hard work and lots of investments- but it's always great to see an entreprenuer starting up a new business.

Now I don't know how things work in other countries, but in the US, you have the option of one of 4 different basic types of companies.

1) Sole Proprietorship - You start it, you own it, you make all the profits, and since your the only person involved- its a much easier way to start a business. The negative about a sole proprietorship is that you unlimited liability- meaning if your business gets sued- all of your businesses as well as your own personal assets are at risk (not only your inventory and business building and land, but your personal car, house, land, etc...).

2) Partnership - You and at least one other person go in on the business in a legally binding partnership. You share the profits, and you generally all share the risks. Also, everyone in the partnership is responsible for what one person does. Unfortunately, if a single person in your partnership dies or leaves the company, the partnership and the company are immediately dissolved. Also- disagreements are common in partnerships- especially in that one person/s may feel the other person/s are not contributing enough work or time into the business, which often lead to the companies death. Which is why you have to be specific in your partnership agreement when it comes to how much time and energy are spent by each person. But partnerships have a better chance of seeing progress than sole proprietorships.

3) Corporation- This is the most complicated one. The main difference here is that a corporation is a totally separate entity. The corporation is liable, not the owners. The corporation sells shares to its owners, and the owners elect a board to run the company. Corportations and corporate owners are taxed like crazy. First the company is taxed. Then the owners are taxed. So you are double taxed in a corporation. The setup of a corporation is also much more complicated- and takes a lot of employees and paperwork to make it run correctly. Also- the government keeps a very close eye on corporations, unlike sole proprietorships and partnerships, and sets out a bunch of rules and guidelines that the corporation must follow.

4) Limited Liability Company / Limited Liablility Contractor- LLC's take the advantage of having little or no liability that owners in a corporation has, and takes the form of a partnership (it is taxed like a partnership) and run similar to one. It's a little more complicated- but it's main advantage is that if your company is sued, they don't come and take away your car, house, your dog, and the clothes on your back. But just like a corportation- the government lays down strict rules and the IRS keeps an eye on you. My brothers friend set up an LLC because of the limited liablility reason.

Generally, when you start your own business, you are probably going to go for 1, 2, or 4. 1 (sole proprietorship) is the most common in the US because it's so simple to set up. You may want to consider this as the way to go.

When you start, you are going to basically transfer a lot of money from your personal bank account into your business. This becomes the owners initial investment- and will be used to setup your business (buy land, building, supplies, equipment, products, etc...).

From then on it's all up to you and what your selling. There are plenty of web sites out there. I recommend avoiding commercial sites for info (as most of them want you to pay something), and start looking at government web sites. In the US, the IRS and Federal Government have info about starting up businesses. There's one .gov site that's a complete guide for starting up a business (cant remember the URL tho). You might find similar sites for your country.

I wish you the best of luck with your new business!!!

[Quattro]

Thank you!
I'm trying to find a UK distro.. But not much luck.
I have found a distro in US and China, but no UK.

I've got about 4 people who said they would like to help me out in brain power not financially which is good.

I want it to sort of start off as a hobby then maybe if it becomes very good maybe word might spread we might start having regular customers.

[CrystalMethod]

Thank you!
I'm trying to find a UK distro.. But not much luck.
I have found a distro in US and China, but no UK.

I've got about 4 people who said they would like to help me out in brain power not financially which is good.

I want it to sort of start off as a hobby then maybe if it becomes very good maybe word might spread we might start having regular customers.


http://uk.ingrammicro.com/corporate/corporate.jsp

http://www.computer2000.co.uk/

https://www.targetsecure.co.uk/newtc24/default.asp

http://www.cms-computers.co.uk/

http://www.lynx.net.uk/parsexpress2/

http://www.rectron.co.uk/

http://www.asbis.com/

http://www.esysdistribution.com/

There are plenty more if you know where to look. Sales reps will always want to make large volume sales. jabtek mentioned that he has bought a single item at a time from a distro, and I can vouch for that. I've bought a single item from some of the largest distributors mentioned above.

[Quattro]

Cool...
So in theory it is possible to buy a single item?
But are you buying the single item as a sample unit?

[Quattro]

This is very difficult...

Can't seem to find any distros that don't need you to earn lots of money and have VAT numbers and all that confusing stuff.

[AMD Phreak]

Another note on the buisness type

You need to perform a risk assesment. This is something that you sit down and examine how much risk you are taking by doing your buisness, and what risks are involved while conducting the buisness. I run a computer buisness with Celeron_Phreak, and we are just a simple partnership right now. We decided that our risk is not high, as we are simply dealing with SOHO uses and not doing any serious wiring work on buildings and what not, and the potential loss for data is not too high if something goes down.

Just a bit of insight.

[Quattro]

Thanks, anything is appreciated.

[CrystalMethod]

Cool...
So in theory it is possible to buy a single item?
But are you buying the single item as a sample unit?


Nope, didn't buy it as a sample unit. Just need the one unit. You'll have to set up an account with the ones you choose to deal with, and probably have to have it registered under a business name. (not too sure how it work in the U.K.).

[Quattro]

Yeah I have applied for a few accounts but no one seems interested all got declined.

So it's kind of annoying.