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  • #995553
    Pasha
    Member
    • Total posts: 4

    Hi all.

    After thinking a lot about starting up a small business that can tick most of the boxes of my situation, I came up with starting manufacturing wooden and artistic decorative / gifts.

    I couldn’t find any resources for profit, risk and regulations in Australia. Just wondering if anyone here can give hints before I get into it 100%

    1. Profit margin for mfg. as small business
    2. Can my shop with desktop tools be run from garage? The Council regulations have completed procedures. Any experience?
    3. As it a start-up not full time job(like hubby) which insurance types are needed?
    4. As now, I’m thinking for online sale. Is that working as opposed to front shops?

    Thanks for your time.

    #1202561
    Peter – FS Administrator
    Member
    • Total posts: 1,889

    Hi Pasha,
    Thanks for joining and nice work on taking the next step.
    Profit margins will ultimately be determined by the quality/uniqueness of what you produce (which will determine how much the market will pay) and the raw costs of producing the goods (time/materials etc). Selling online can be a low cost option, as can local markets etc to start with.

    Manufacturing is not something I have experience in, but possibly some of our regulars may be able to share some experience on your other questions.

    All the best with it!
    Peter

    #1202562
    Pasha
    Member
    • Total posts: 4

    Thanks Peter

    #1202563
    Mischelle
    Member
    • Total posts: 805

    Hi Pasha,

    I am assuming by your comment you are manufacturing these yourself in your garage? If so, you need to keep a tight track on your timing to make sure you can make a profit.

    1. Profit margin for mfg. as small business

    Profit margin calculations has many elements, but the main one is Cost of Goods, how much does it cost you to make the product? Time to make, materials, overheads (including insurance) etc. Below are a couple of reference points for you.

    http://www.business.vic.gov.au/money-profit-and-accounting/pricing/calculate-your-breakeven-point-margin-and-markup

    https://www.business.gov.au/info/run/finance-and-accounting/accounting/calculating-your-gross-profit

    2. Can my shop with desktop tools be run from garage? The Council regulations have completed procedures. Any experience?

    Many many many people do this, my Dad hand makes wooden gifts in his shed and sells them at the markets. Just be aware of YOUR council requirements and noise. Some councils will require you to do a self-assessment checklist for your home business, it’s really easy, download a form and complete the checklist.

    3. As it a start-up not full time job(like hubby) which insurance types are needed?

    Regardless of part time or full time, if you are running a business you need to protect yourself and your customers. Speak to a broker (there are a few on this forum) .

    4. As now, I’m thinking for online sale. Is that working as opposed to front shops?

    You can do online to start, but I also suggest the markets. You are making hand made products and have business cards to hand out to direct people to your online store as well.

    I hope some of this helps, keep us posted and keep asking questions
    Cheers
    Mischelle :)

    #1202564
    MyGreatIdea
    Member
    • Total posts: 2,278

    Before getting too far into spending, I’d test the market.

    How do you know people will want your products? How much will they be prepared to pay?

    Start with a couple of basic, low cost designs at a local market and ask questions of any interested or potential customers. Don’t assume what your market are looking for, listen to their answers. The aim here is not to sell, but to gather market research.

    Wendy :)

    #1202565
    Pasha
    Member
    • Total posts: 4

    Thanks Mischelle and Wendy :)

    But what is the best way to gather costumer demand? The only way that I am thinking is to add couple of them into a website as a demonstration and wait for the outcomes. any other way?

    Cheers,

    #1202566
    Paul – FS Concierge
    Moderator
    • Total posts: 3,128

    Pasha, [USER=20385]@MyGreatIdea[/USER] and [USER=60404]@Mischelle[/USER] have both suggested opening a market stall at your local markets.

    Very good advice. Ebay and Gumtree may also be cost effective ways to research your market.

    Cheers

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