Author Topic: should i take the plunge to self-employment? (young and dumb)  (Read 3046 times)

mohawkbrah

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should i take the plunge to self-employment? (young and dumb)
« on: January 08, 2016, 01:58:00 AM »
I've been making a business plan for my own small food shop, selling healthy food such as beans, gluten free grains, nuts, seeds, gluten free flours, dried fruit, honey, sugar (and the list is still getting additions as i plan out more)

Here's what my overheads look like from quotes i've been getting

Lease annual - 6500 *i was looking at one that had 4500 but the footfall isn't very good
Insurance - 500 annual
Utilities - 1200 annual (this is a guess i think it's pretty close to actual)
Loans - 1200 annual (I plan on taking out a 5000 loan at 6% to provide me with a bit more capital)

= 9400 overhead costs

I will be the only member of staff so any profit made after goes straight to me

I plan on marking up my goods by 50%-80% depending on competitors prices

One of my niches i plan on focusing on is also operating a small scale bakery as well, making gluten and dairy free baked goods and confections. Such as dairy free fudge which has been a success and had good results from taste tests, but i won't overprice them like over retailers because i can make it quite cheaply. I've also done taste tests of gluten and dairy free muffins which were good.

Probably going to be planning more over the next month or so but do i sound foolish in my attempts  since im only 20 years old lol.

okits

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #1 on: January 08, 2016, 02:07:31 AM »
Could you start selling your fudge and muffins from home (to eliminate the overhead costs of a stand-alone shop), and first establish a clientele?  Have other specialty food places distribute it and do direct sales (have a website, word of mouth).

Do you have an idea of the cost of your initial store inventory, and low/med/high revenue estimates?

mohawkbrah

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #2 on: January 08, 2016, 04:28:47 AM »
Could you start selling your fudge and muffins from home (to eliminate the overhead costs of a stand-alone shop), and first establish a clientele?  Have other specialty food places distribute it and do direct sales (have a website, word of mouth).

Do you have an idea of the cost of your initial store inventory, and low/med/high revenue estimates?


this was my initial idea, i was going to buy a catering trailer to use as my kitchen as my house has a really small kitchen. THis way i could focus more on Business to business sales and sell more volume at lower margins. But i can't drive and im not sure on where i could store the trailer as we have a small driveway that can only fit one car (my dads) and im not comfortable leaving a trailer with valuables inside on the side of the road (i live in a not so great neighborhood, scared of vandalism)

I've got my initial store inventory starting at 8k and hopefully making 40% return on it, whether that will sell or not who knows.
« Last Edit: January 08, 2016, 04:32:32 AM by mohawkbrah »

arebelspy

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #3 on: January 08, 2016, 05:08:06 AM »
Your signature says: current Portfolio (20/9/15) = 3600.

It's been 3.5 months since then, so you presumably have more, but that's not much of a buffer at all to open a business like this.  You literally don't even have the money to open it, you'd be going into debt to do so.

I'd probably pass, for now, and build up a bit more reserves before you take a pretty drastic step like this.  On the other hand, if that's what's needed to get you going, maybe taking a risk, even if it fails, is worth it.

Either way, good luck!
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ooeei

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #4 on: January 08, 2016, 06:43:03 AM »
Just keep in mind the demand and shelf life for things like dairy free fudge.  Other retailers might upcharge because they only sell 20% of what they make before it goes bad.  Have you considered working in a bakery or grocery store for a few months to see what it's like and why they do what they do?

ender

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #5 on: January 08, 2016, 06:45:41 AM »
It feels like you are committed to this approach regardless of what people tell you.

Your business plan is not even remotely detailed enough for me to give any advice, other than you need a more detailed business plan.

What is your target income you want? how much in sales will you need for this? what does that breakdown in sales look like? how many sales are you expecting (and why do you think this)? what happens if sales are 20% or 50% under your expectations? how much will it cost to renovate the building you anticipate leasing? how are you planning on customers paying and what will that cost you?

etc

morning owl

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #6 on: January 08, 2016, 07:55:59 AM »
Are there farmers markets where you live? Can you start out super small, i.e. in your own kitchen, and sell at these markets? That way you can start to gain customers who will recognize your product, and meet potential customers to find out what they want. Your overhead will stay low (basically farmers market fees, booth costs, and product expenses) and you can see if you like it before spending too much money.

Before you start talking about "more volume" it would be wise to start at the very beginning.

mohawkbrah

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #7 on: January 08, 2016, 08:58:34 AM »
Are there farmers markets where you live? Can you start out super small, i.e. in your own kitchen, and sell at these markets? That way you can start to gain customers who will recognize your product, and meet potential customers to find out what they want. Your overhead will stay low (basically farmers market fees, booth costs, and product expenses) and you can see if you like it before spending too much money.

Before you start talking about "more volume" it would be wise to start at the very beginning.

yes their is a farmer market in city centre, the more i think about it it might be better to start at home and sell at a stall. Going to have to plan out where to store all my equipment as we do have quite a small kitchen haha. lots of planning to do!

ShortInSeattle

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #8 on: January 08, 2016, 05:35:39 PM »
I'm self-employed and I support your goal to be a business owner! Huzzah. It can be a rewarding way of life.

I don't recommend you dive in right now.  Your idea of starting with a stall isn't bad, but how about taking 1-3 years and working in a similar business as an employee? Get your education on someone else's dime. Work hard and observe very carefully what does and does not work. Learn about supplier relationships and how much margin there is in the business and how to lay out your store attractively.

You don't have the savings to be able to afford making your own mistakes right now.  I'd work on the inside for a bit, get educated, and then consider opening your own shop.

SIS

mozar

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Re: should i take the plunge to self-employment? (young and dumb)
« Reply #9 on: January 08, 2016, 08:57:33 PM »
Niche stores often charge 150%-300% mark up so don't undersell yourself. People expect high prices for quality goods. They might think there is something wrong with your food. If you are charging low prices you need to sell high volume. You need to learn two things: marketing and how to drive.