Online tools such as crowd-sourcing website Kickstarter are making it more plausible than ever for individuals or small partnerships to develop their own exciting e-commerce business. The thrill of leaving the 9-5 lifestyle and earning a crust doing the thing you love the most can mask the risks you will be taking as a new e-commerce business.
So after thinking up a catchy business name and interesting USP, it is time to consider these five insider tips before you take the plunge and start your own business.
Sorry to any accountants reading this: but for the most people, accounts aren’t particularly thrilling. Considered by many to be slightly scary and daunting, it can be tempting (but expensive) to outsource this responsibility to a professional. This expense can be a huge drain on an e-commerce start-up which needs to keep the purse strings nice and tight in the early stages of operations.
The Wave accountancy tool is the free service making it possible for small business owners to complete payroll and accounts tasks. Users don’t require any previous experience with this tool aimed at the inexperienced accountant.
One of the largest overheads for the majority of e-commerce businesses is courier costs. Delivering goods from the business’ hub or stockroom to the customers is central to the business but can be incredibly pricey. Rapid Parcel is a simple-to-use comparison tool allowing businesses to discover the cheapest courier options for their particular services. The tool allows users to input weight, size and delivery details into the comparison tool, generating costs across all the major couriers.
Cutting delivery costs can help increase those pesky profit margins or give you the opportunity to pass savings onto the customers.
Stock & CMS Management
The physical and digital management of stock can be a hugely time-consuming task for new businesses, requiring its own dedicated team. For many start-ups, the prospect of employing more full time staff can be financially unviable.
To help save costs, start-up business can employ apprentices for as little as £2.73/hour. Additionally, the Government are currently offering grants of up to £1,500 for business taking on apprenticeships, helping to cover nearly four months’ worth of wages for the apprentice. You can find more details on the Government’s website – take a look here.
Diligent, Watertight Documentation
From extensive iTunes user terms to electronic receipts for in-store purchase, Apple leads the way in exhaustive, unperishable documentation. This permanent information helps to protect the company from potential disagreements with customers and illegitimate returns – saving the company billions every year.
Small e-commerce business should follow this lead, building a comprehensive referencing system for all orders, correspondences and deliveries to protect themselves from any potential problems and disagreements with customers. Even if the company’s ethos is relaxed and informal, it is prudent to be organised, formal and comprehensive with all business documentation.
Returns, merited or otherwise, can cost a business significant amounts of cash – potentially threatening the existence of small e-commerce start-ups.
Claim Back VAT
Another step to help ensure the company is saving money wherever possible, keep all business-related receipts and invoices to claim back VAT. Even if the receipt is for a small investment, claims for the cashback can save significant amounts of money over the years. Additionally, it is prudent to get into the good habit of claiming VAT immediately rather than rueing lost funds further down the line.