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    I am looking to turn my hobby of making handbags into a small business. I’m testing the waters with selling a few through my blog and facebook to see if there is interest before deciding to dive in and get an ABN etc.

    I have a few questions which I hope you can help me.

    I use hand screen printed fabrics from independent designers. To purchase at wholesale prices and in customer colours there is usually a minimum length requirement for the print run. So say I were to purchase 10m of fabric wholesale but then use only 3m of it to make a range of bags. I decide to sell 5m of it as either fat quarters or fabric by the metre. The remaining 2m I want to use in a personal project to make a piece of clothing for myself.

    1) Can I use the 2m in a non-business related project?
    2) Would I only claim the 8m that I use/sell as a cost to the business? Or claim 10m and ‘buy’ the 2m back from it.

    The other question I have is in relation to costs as well. I have a domain name and webhosting for my blog which I plan to add a website to. The hosting is about to come up for renewal. If I prepay 2 years in advance now can I claim that as a cost if I register an ABN say 3 months from now? Can I claim any expenses that I incur prior to the registration of the ABN if it’s directly related to the preparation of going into business? Or would it be counted as assets that I am bringing to the business?

    Thanks for your help!

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    Hi harvcam,

    Regarding the 2m being used for personal. I would say from the 10m that you bought, any remaining that you dont sell or use to create goods for sale could be waste.
    The other questions I’ll let the accountants handle.


    Chris – Marketing
    • Total posts: 162

    As an X Leather and Garment manufacture the 2m is deemed wastage, shrinkage or used for sampling. The personal garment you make might create interest in your bag range so it could also be promotional. So don’t worry about the 2m excess.

    Keep all receipts that you spend leading up to your business start as these will be initial capital investment. receipts include product development. Travelling costs, market stalls as this is deemed research. Very important for a business.

    Hosting – not sure what you are paying but 12 months with us is only $120.00

    Starting a business is easy if you follow some simple steps. Reasearch is the first and biggest. What price will your market pay for your bags. Remember if you sell volumes you will have to employ or sub contract a manufacture. So how long does it take you to make a bag. Use $30.00/hour as a rough labor cost. then add fabric and printing costs then add 40%. this is your wholesale price. retail is caluculated at 200% these days. That’s why the majority of garments and goods are manufactured in asia.

    Chris Poulios

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