Most businesses are started up by someone who has a great hobby and does well with it – folk may want to chip in and buy the fruits of this labour . . . word gets round and before long, friends and neighbours want to buy. This then causes a production line requiring some sort of supply chain. For the goods to be made and supplied, generally materials or ingredients have to be bought in (supply chain) and tools or machinery is required to step up the speed of manufacture (production line) and then the goods have to sold, packed and delivered to the buyer (orders in, invoices out, delivery note, courier or posting). So thus the business is formed. The point about taking it from a back yard hobby to this happy state of making the product and selling it is to make more money than it costs to buy in the materials and the cost of producing; and to ensure that remains the case, the cost of packaging and delivery of items must be taken into account. It can be a harsh lesson when the first few batches of an item fail to show this profitability. It is easy to get carried away and maybe feel sorry for the buyer, having to fork out for extras like packaging and postage – but if they don’t, the supplier has to. Somebody has to pay.
To ensure that the business goes from strength to strength, there are benefits to paying a subscription to a small businesses advisory group – these offer access to mentors, financial advisors, legal advice and all sorts of topics that the newie business person will not know about but will definitely need to know as they go on.