Wednesday, May 04, 2005
Business Startup
I realised that I set up this blog to really talk about how I'm attempting to setup my own business, yet I hadn't actually talked about it at all. That's partly because I haven't actually done much; I've just been researching.
My plan is to carry on working and, in the meantime, get an internet business ("e-business") going so that when my contract runs out come October 2006, I can quit and run it full time. It's something I've always wanted to do (when I was little I said that when I grew up I wanted to be a "till man" [cashier] - but only for the money). Hence I'm going to start small, using some savings, and sell some instrument bits and bobs, before moving up to selling instruments and music itself.
My research so far has detemined that to setup such a business is quite a complicated task. Being a computer programmer I thought it would be as simple as writing a bit of code and off we go. Of course, I knew that if I wanted to take credit card payments I'd have to deal with some gateway, but I didn't realise that would be quite so complicated either - particularly if you want to get a good deal.
I first investigated WorldPay and their WorldDirect package which really is almost as simple as writing a bit of code. They take your customer's money and then sometime in the future give you the money back. Apparently that "sometime in the future" can be nearly 2 months, which is a big dent in the cashflow. They also charge a large amount. I did a quick estimated growth plan and worked out that after 2 years I might have paid WorldPay nearly £2000.
I investigated NetBanx and found almost the same situation.
There is another way, and that's to get what's known as an internet merchant account. This is basically a bank account which accepts payments from credit cards - but doesn't actually do the making of the payments; that is, you still need a payment gateway. This can work out alot cheaper and also means your (rather than WorldPay's) credit rating is made good the more you use it.
So, this is what I've decided to do. I'm almost certainly going to go with the payment gateway (the people who actually take the money and send it to your internet merchant account) called Velocity Pay who have a good website describing all this stuff, and whose costs are low and get lower the more you use them. I haven't yet decided on an internet merchant account yet - although Velocity Pay recommended Barclays or Bank of Scotland.
However, I'm almost certain that I'll go with Alliance + Leicester for the business account (which allows me to pay wholesalers for goods) because it's free for 18 months, and after that it's also pretty much free (barre paying in cheques). So, I've started filling out the application form today. It's only then that I realised my business doesn't yet have its own phone number. I figured it would be pretty annoying to have people ringing my phone number for something for the business, so I've setup a call signing system on our home phone line. This means that business calls, although they'll come through to the home phone, will ring differently so I'll know how to answer, what to expect, or possibly ignore it. You can even get gadgets that will make different phones rings depending on the call sign.
Anyway, that's the background of where I'm upto. It's not far, yet, but I'm on my way now. Once I've signed up for this business account, there's not really any going back. So far, I'm still in the backing-out zone. The sooner I'm out of that zone I expect I'll feel better, as the ball that is the dream of quitting come October 2006 has started to roll, albeit very slowly.
My plan is to carry on working and, in the meantime, get an internet business ("e-business") going so that when my contract runs out come October 2006, I can quit and run it full time. It's something I've always wanted to do (when I was little I said that when I grew up I wanted to be a "till man" [cashier] - but only for the money). Hence I'm going to start small, using some savings, and sell some instrument bits and bobs, before moving up to selling instruments and music itself.
My research so far has detemined that to setup such a business is quite a complicated task. Being a computer programmer I thought it would be as simple as writing a bit of code and off we go. Of course, I knew that if I wanted to take credit card payments I'd have to deal with some gateway, but I didn't realise that would be quite so complicated either - particularly if you want to get a good deal.
I first investigated WorldPay and their WorldDirect package which really is almost as simple as writing a bit of code. They take your customer's money and then sometime in the future give you the money back. Apparently that "sometime in the future" can be nearly 2 months, which is a big dent in the cashflow. They also charge a large amount. I did a quick estimated growth plan and worked out that after 2 years I might have paid WorldPay nearly £2000.
I investigated NetBanx and found almost the same situation.
There is another way, and that's to get what's known as an internet merchant account. This is basically a bank account which accepts payments from credit cards - but doesn't actually do the making of the payments; that is, you still need a payment gateway. This can work out alot cheaper and also means your (rather than WorldPay's) credit rating is made good the more you use it.
So, this is what I've decided to do. I'm almost certainly going to go with the payment gateway (the people who actually take the money and send it to your internet merchant account) called Velocity Pay who have a good website describing all this stuff, and whose costs are low and get lower the more you use them. I haven't yet decided on an internet merchant account yet - although Velocity Pay recommended Barclays or Bank of Scotland.
However, I'm almost certain that I'll go with Alliance + Leicester for the business account (which allows me to pay wholesalers for goods) because it's free for 18 months, and after that it's also pretty much free (barre paying in cheques). So, I've started filling out the application form today. It's only then that I realised my business doesn't yet have its own phone number. I figured it would be pretty annoying to have people ringing my phone number for something for the business, so I've setup a call signing system on our home phone line. This means that business calls, although they'll come through to the home phone, will ring differently so I'll know how to answer, what to expect, or possibly ignore it. You can even get gadgets that will make different phones rings depending on the call sign.
Anyway, that's the background of where I'm upto. It's not far, yet, but I'm on my way now. Once I've signed up for this business account, there's not really any going back. So far, I'm still in the backing-out zone. The sooner I'm out of that zone I expect I'll feel better, as the ball that is the dream of quitting come October 2006 has started to roll, albeit very slowly.
