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planning when/how to expand a business
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sally_in_wales
Downsizer Moderator


Joined: 06 Mar 2005
Posts: 20809
Location: sunny wales
PostPosted: Tue Dec 16, 14 10:22 am    Post subject: planning when/how to expand a business  Reply with quote    

We currently work from home, have several different types of product/activity/supplies needed and have got to the point where the floor is no longer visible in most rooms due to the sheer volume of business related stuff trying to fit round life related stuff.

We're also getting steadily busier, with increasingly higher profile clients, and there are a few things in the pipeline which if they come through, might mean we are in a position to really need to multiply production on things like the Plague Rats.

Several times this year I've had to turn down work purely for logistical reason, rather than because we weren't available on that given date, its just not been possible to close down one project/job in time to prepare for the new one. If we had a more useful space for a lot of the stuff, and maybe an extra pair of hands for a few hours, we could have managed it.

I'm pretty sure that if I could get the costumes, props, supplies and the Plague Rat empire into a small unit, and employ someone part time to be a 'technical assistant', setting up and packing down resources needed for the historic jobs and working on basic aspects of Plague Rat production in between those sessions, then we could take on those additional jobs and probably easily double or triple rat production.

However, whilst turnover is increasing steadily, we haven't yet got to the point where I can just gamble money on some premises and a helper and be able to write it off if it doesn't work. I'm also so busy with current projects that the time needed to set up a unit and work out the necessary stuff for employing someone is going to make it even more of a gamble, and could put me critically behind with commissions. If it goes well though, a couple of weeks setting it all up could magically free me up time, space and sanity to get commissions done twice as fast as currently.

There are small industrial units within walking distance, (the usual row of tin workshops sort that you often see small industries like panel beaters or furniture assemblers in), which could be ideal for a largely storage and prep type upgrade, but they work out around £600 a month, which seems truly terrifying at this moment, though probably not that much if turnover could be dramatically improved. Its not really practical to think about extending the house or building a big shed- its still vaguely on the cards, but wouldn't be big enough to allow us to move towards an employee and seriously useful working space.

I could explore storage units, and think in terms of essentially buying a room just for the historic stuff, and kit it out with racks and a prep table, but that won't be as flexible for other purposes, though it would come without additional costs like rates and power. It also wouldn't lend itself to staff of any sort, but could work for making the costumed work more efficient. I'm guessing thats going to be about £100 a month for a room sized unit?

I haven't yet calculated the likely actual cost of employing someone for maybe 2 days a week to start with. There is a scheme being run locally though that covers the wages of an 18-25 yr old for 6 months, which we might just possibly be able to apply for. First we need somewhere for them to work though.

I also need to plan for hiring some help for a serious website/webshop overhaul and upgrade. I haven't got the brainpower to think about that until I've decided what on earth to do about the space thing.

Something has to change, and it does feel like its time to take a little bit of a leap of faith and believe that we really can grow the business without killing ourselves in the process, but quite frankly I'm scared by the potential financial risk.

So, I'm after thoughts, ideas, inspiration, a good slap- whatever your experience with expanding a business when you can't think straight any more has taught you.

vegplot



Joined: 19 Apr 2007
Posts: 21297
Location: Ynys Môn
PostPosted: Tue Dec 16, 14 10:26 am    Post subject: Reply with quote    

Have you spoken to http://www.menterabusnes.com/ ?

tahir



Joined: 28 Oct 2004
Posts: 43857
Location: Essex
PostPosted: Tue Dec 16, 14 10:29 am    Post subject: Reply with quote    

1. Are you charging enough? Your only resource is your own time, very difficult to see (in the short term) how you could magically up your production.

2. Yes you need someone else to manage your website.

3. How much can you afford to lose?

Whatever you do with the business you need to make sure it doesn't affect your personal finances too much, if it all goes tits up you don't want to end up remortgaging to pay people off. May be worthing going limited

Shan



Joined: 13 Jan 2009
Posts: 6912
Location: South Wales
PostPosted: Tue Dec 16, 14 10:54 am    Post subject: Reply with quote    

Probably be cheaper to rent a flat or another house than a unit.

earthyvirgo



Joined: 24 Aug 2007
Posts: 7972
Location: creating prints in the loft, Gerlan
PostPosted: Tue Dec 16, 14 11:48 am    Post subject: Reply with quote    

That sounds hideously expensive per month for a unit in S Wales. As vegplot suggests, contact one of the Menter type agencies.

Welsh Veg Grower may have contacts she could point you towards - she's doing a lot of 'enterprise' work in S Wales at the moment, mainly with Women in Business but I wouldn't be surprised if she'd not be able to advise somehow.

I know exactly what you mean about the overload - more hands, a fairy to deliver work to galleries and pop things in the post and a few more hours a day would be very useful here too

EV

Rob R



Joined: 28 Oct 2004
Posts: 31902
Location: York
PostPosted: Tue Dec 16, 14 12:20 pm    Post subject: Reply with quote    

Have you done an efficiency audit on your existing setup? We're in the same position and this has really helped shave time off by identifying where extra equipment/routines could save time and/or money. It's frustrating knowing that x could improve things when you can't afford it, but it's better than spending on y without knowing what you should be aiming for.

We also looked carefully at fixed costs and where they could be reduced or made better use of.

We're still a long way off where we need to be, but at least we know where that is, even if we're not completely sure how to get there yet.

wellington womble



Joined: 08 Nov 2004
Posts: 14739
Location: East Midlands
PostPosted: Tue Dec 16, 14 5:07 pm    Post subject: Reply with quote    

Could you start with time? Some sort of assistant for a few hours a week might free you up just a little to explore your options. And on a casual basis you could drop it if it became too much?

joanne



Joined: 28 Oct 2004
Posts: 7081
Location: Morecambe, Lancashire
PostPosted: Tue Dec 16, 14 5:25 pm    Post subject: Reply with quote    

Storage units are extremely useful, especially as you can expand the size step by step until you get to a point where a full time unit would make more sense.

I priced up one recently as we are going to have to move a vast amount of stuff out of the house so we can have the space to redecorate / minimise it whilst getting it ready to sell over the next year. Our local one is called Big Storage and the quote I got was as follows:

25 sq ft @ £15.00 p/wk + vat + insurance

35 sq ft @ £17.50 p/wk + vat + insurance

A 25 sq ft space is the equivalent of a large walk in wardrobe and 35 sq ft a small box room.

Depending on the company I think you are also allowed to rent them as studio or workspaces which could still work out cheaper than those units even if you just use them for getting all the stuff out of the house so you are only storing what you are currently working on in the house.

sueshells



Joined: 20 Jan 2009
Posts: 690
Location: North Bucks
PostPosted: Tue Dec 16, 14 10:54 pm    Post subject: Reply with quote    

I agree that the price for the industrial unit sounds really expensive. I live in Buckinghamshire and looked at basic brick built units with electricity - around 600 sq. ft - and those were under £300 per month. I can rent a decent storage unit on a local farm for £75 per month and that is 10' x 10'. It pays to shop around for this sort of accommodation, depending on distance and travel time, of course.

dpack



Joined: 02 Jul 2005
Posts: 32593
Location: yes
PostPosted: Wed Dec 17, 14 1:26 am    Post subject: Reply with quote    

what they say about prices for premises seems sensible

for storage nearish and secure are top priority
for a workspace to expand production near is vital

a combination of both nearby and very good value for money would be ideal

if you are thinking of employing staff a basic equation is their cost in wages etc should be no more than 50% of the extra work you get done ,ie charge them out at about(at least) twice what it costs you to hire them.

this covers overheads.downtime ,hols ,replacing them,treats to retain them ,insuring them etc etc as well giving extra turnover and some extra profits(try for 25% extra profit on a worse case scenario).
the numbers might need adjusting for"wats" or fancy stuff but the basic principal applies .

beware maternity leave ,potential employment law issues,hns,family or illness issues ,rogues etc etc

beware cash flow issues ,you can perhaps wait for wages but an employee must be paid as agreed by contract (yes law again , a written contract that will stand up in court if needs be is not a waste of up front money)

this might seem a ruthless way to consider taking on staff but it is daft to gain a lot of responsibilities and some potential risks for no (fairly) certain business gain.

i found directly employing one or two good uns fairly long term with a bit of churn not impossibly difficult to manage to everybody's benefit.if they are good they can become almost family in a small enterprise.
it can take a few rejects to get the right ones ,if you need quite a few at short notice sub contracting is a good option rather than a lot of hire /train/ reject hire again etc .

if a job is repetitive sub contracting it out can be a good option

i know much of what you do is very specialized and skilled but some of it is basic hands on skills ,would it make sense to separate these and subcontract jobs such as rat stitching ,tail inversion etc and concentrate on design,market development ,specialist historical stuff and the other things that you are good at ?

that was a free sample of my consultancy skills

earthyvirgo



Joined: 24 Aug 2007
Posts: 7972
Location: creating prints in the loft, Gerlan
PostPosted: Wed Dec 17, 14 8:23 am    Post subject: Reply with quote    

dpack wrote:
what they say about prices for premises seems sensible

for storage nearish and secure are top priority
for a workspace to expand production near is vital

a combination of both nearby and very good value for money would be ideal

if you are thinking of employing staff a basic equation is their cost in wages etc should be no more than 50% of the extra work you get done ,ie charge them out at about(at least) twice what it costs you to hire them.

this covers overheads.downtime ,hols ,replacing them,treats to retain them ,insuring them etc etc as well giving extra turnover and some extra profits(try for 25% extra profit on a worse case scenario).
the numbers might need adjusting for"wats" or fancy stuff but the basic principal applies .

beware maternity leave ,potential employment law issues,hns,family or illness issues ,rogues etc etc

beware cash flow issues ,you can perhaps wait for wages but an employee must be paid as agreed by contract (yes law again , a written contract that will stand up in court if needs be is not a waste of up front money)

this might seem a ruthless way to consider taking on staff but it is daft to gain a lot of responsibilities and some potential risks for no (fairly) certain business gain.

i found directly employing one or two good uns fairly long term with a bit of churn not impossibly difficult to manage to everybody's benefit.if they are good they can become almost family in a small enterprise.
it can take a few rejects to get the right ones ,if you need quite a few at short notice sub contracting is a good option rather than a lot of hire /train/ reject hire again etc .

if a job is repetitive sub contracting it out can be a good option

i know much of what you do is very specialized and skilled but some of it is basic hands on skills ,would it make sense to separate these and subcontract jobs such as rat stitching ,tail inversion etc and concentrate on design,market development ,specialist historical stuff and the other things that you are good at ?

that was a free sample of my consultancy skills


Very wise advice re becoming an employer.
Law has made it overly cumbersome for a small business, so it's best kept as simple as possible by using as many .gov documents and basic templates as you can to save writing your own, when it comes to contracts.
Know and keep to the statutory requirements re pay/hols/maternity etc.

EV

kGarden



Joined: 01 Dec 2014
Posts: 178
Location: Suffolk, UK
PostPosted: Wed Dec 17, 14 9:48 am    Post subject: Reply with quote    

dpack wrote:
what they say about prices for premises beware maternity leave ,potential employment law issues,hns,family or illness issues ,rogues etc etc


... and time spent on HR until you get some good'uns. If you get bigger then the time-drain on HR will return

boisdevie1



Joined: 11 Aug 2006
Posts: 3896
Location: Lancaster
PostPosted: Wed Dec 17, 14 10:29 am    Post subject: Reply with quote    

Can't you increase your prices and see what the market will bear? Perhaps you'll have less work but more profitably?

MornieG



Joined: 17 Jan 2013
Posts: 933
Location: Bromham, Wiltshire
PostPosted: Wed Dec 17, 14 10:50 am    Post subject: Reply with quote    

Taking the smaller picture as opposed to the bigger one ! Initially the production of plague rats could be done by an outworker maybe on a pay per rat contract ? Doesn't solve the space problem but will give you additional production and income to hopefully pay towards the space you need. There might be people on here or local to you who would be glad of some additional income which could work around family life. Obviously you specify what you require as minimum production per week and the quality of work you find acceptable.

Mo.XX

vegplot



Joined: 19 Apr 2007
Posts: 21297
Location: Ynys Môn
PostPosted: Wed Dec 17, 14 2:58 pm    Post subject: Reply with quote    

You may need to increase prices, not a bad thing - quite the opposite, to improve your operating margins.

Unless you have the margins be wary of outsourcing or employing someone as they may take months before they start paying their way. You'll also need to be adept at managing people, production, and quality control.

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