COVID-19 & Small Businesses (Is it time to start your own?)

-Intro-

It’s very unfamiliar times at the moment and we’re all asking the same question.. How will I continue to make money if I’m not working? Will my job be secure in the long run once this pandemic is over? Is it worth starting your own small business to have as a backup plan along with a steady secondary income stream? What should I sell? Let’s take a look at these questions..

Shelfs are being cleared in shops, towns and cities slowly becoming empty as everyone stays at home. Online shopping will become more popular than ever, up to 50% in fact.

With everywhere currently on lockdown, more and more businesses are closing leaving employees with no income or a low sick pay wage. Of course, we can claim Universal Credit from the Government which will help, but doesn’t cover the income we usually earn from our jobs. Should we be thinking about setting up a small business as a backup?

Starting your own small business can be hard, yet very rewarding. If you can grow to the stage where you can pay yourself a wage, you won’t need to work another job. It’s fun too! Being creative, designing your own product or sourcing in it from wholesalers, even making it from scratch!

– What should I sell? –

The big question is.. what should I sell? Well, anything really! Of course it helps to do some market research first. If you’re going to be selling online (which I highly recommend) , you will have competitors such as eBay, Amazon and Etsy. But this can be healthy for your own business. You can work out your own pricing structure based on your competitors and get lots of marketing / product design ideas! As a secondary school teacher once told me.. “Beg, Steal & Borrow” (within reason of course).

– Do What You Love –

It’s a well known fact, if you don’t do what you love, you just won’t be 100% passionate about it. Therefore, start a business in an area you love! You might want to start a handmade soap business, cosmetics, or arts & crafts! Maybe you have a skill in one particular area.. why not create an eBook teaching others! Love music? Make an album and sell it!

You can get so much product inspiration from the internet. Take a look on Etsy or Pinterest, they’re great to dive into handmade gifts or items. Write some ideas down, then do the costing!

– Work Out Your Costing –

It’s highly important you make profit in your business, otherwise what’s the point? You don’t want to give away your time and effort for free! Make sure you add on that little extra to cover your time for making the product (if it’s handmade).

If you already have a range of items or one that’s made already, work out your cost to make, wholesale price, then your profit margins. What’s your markup by %? For example:

  1. An item costs you £3 to make (this covers all the parts/ingredients).
  2. You’ve done your market research and seen similar items being sold for £20.
  3. You want to sell your item for £18 (this undercuts your competitors and leaves you with an amazing profit margin of £15. That’s nearly a 500% markup!)
  4. You make £15 in profit. (Don’t forget to account for listing fees if selling on an e-commerce website like Etsy or eBay.

Workout your wholesale cost*, in case you want to get your items into shops and are suitable for this (highly recommended). Usually, you’d half your RRP to find your wholesale cost. (£18 / 2 = £9).*

– Conclusion –

It’s definitely a time in which we all need to think about the future and what happens after this outbreak. Being able to have a steady online business, with a product which is needed through thick and thin will do incredibly well. As you can see of late, antibacterial products have been very popular. Maybe the trend will continue after this pandemic and there will be a much larger market for these items. People will hopefully be more hygiene conscious too.

Do what you love and enjoy it!

Jake – CEO & Founder at Candle Works UK

www.candleworks.co.uk

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