3 product-business specific things to set up now

If you’re starting up a products business then hopefully you’ve already read or listened to my interview with Gemma Whates, on the 10 things to do, right at the beginning, to set yourself up for success.

There are 3 additional things I suggest you also think about, that we didn’t cover. I never want to overwhelm you, but I do suggest getting these product-business specific things in place at the outset.

While perhaps not exciting, they’re definitely important.

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Take out insurance

I strongly recommend taking out insurance, as soon as you have stock to sell. Policies aren’t as expensive as you’d think.  Even if you never need them (which I hope you don’t) you’ll at least have the peace of mind that you’re covered if something goes wrong.

There are 3 types to think about and you can get them all on one policy:

Public liability insurance covers third-party property damage and injury caused by you or your business. It’s useful if you go out and about to meetings or events, or if people come and see you.  For example, if you run a store, attend pop up shops, fairs, markets, etc.

Products liability insurance covers damage to people and property caused by the products you sell, and that you’re liable for.  For example, if someone gets hurt, as a direct result of using your product.

Stock and property insurance covers loss or damage of your stock and any business equipment you use.  (For example, a laptop, or the equipment you use to create your products.)

I found two providers that offered protection that seemed suitable for an online retail business:

Both also offered the option of adding additional insurance for your stock and employer’s liability (if you have any staff).  

If you’re planning on using Amazon FBA, Amazon do state that they will reimburse you for missing or damaged stock – but having insurance still seems sensible to me.

Set up your banking

However you choose to set up your business you’ll need a bank account so you can send and (importantly!) receive money.

I suggest thinking about what kind of banking you might need at the outset.

If you’re running your business as a sole trader (see this post for more on that), it’s fine to use your own bank account (although you can set up a separate account if you wish). If you’re a business, you need a business bank account.

One thing I’d suggest asking yourself is will I need to send and receive foreign currency?

Why do I ask that?  Well, if you’re sourcing your product overseas you may well need to pay in the currency of that country.  Or, if you source your product in China, you’ll be quoted, and possibly need to pay, in US dollars.  

I say possibly here, because if you’re using Alibaba for sourcing they do now give the option to pay in pounds.  I’ve done it.  So far it looks pretty good and the exchange rate is comparable, and sometimes better, than what I’d get using Transferwise (see below) to send it in dollars.

If you’re going to be selling Globally, or perhaps even just selling in Europe, you may be receiving money in different currencies.

If you’re taking payments through paypal, or your own website, you can receive it as GBP.  If you sell via Amazon, payments form the EU marketplaces will be sent to you as Euros.

To summarise, for many reasons, you might find yourself dealing with two or more currencies.  For this reason, I use a bank called Transferwise to manage foreign currencies (although I have a UK account with them too), alongside my main business bank account, which is with a UK High Street bank and I only use it for UK currency.

You can of course open multi-currency accounts with a high street bank.  I found this to be a bit cheaper.  Even now, if I pay a supplier in pounds, I still typically send it from my Transferwise account, as the fees are so low.  (Also, when I first got set up, I had to pay my supplier in dollars and it was much cheaper to do it via Transferwise than my regular bank.)

Apply for an EORI number (if you need one)

This was a big one for me – and something I wish I’d known in advance.

An EORI (or Economic Operators Registration and Identification) number is needed to move goods between the UK and non-EU countries.

Not having one can cause delays (which happened to me) and / or incur extra costs.

It’s something you’ll need to give to your shipping company, if your product is produced outside of the UK and you’ll be shipping it here.  It doesn’t matter if your product will be stored in your home, in a warehouse, or if it’s going directly to an Amazon warehouse – without an EORI it won’t be getting through customs.

You’ll also need one if your product is manufactured in the UK, but you plan to export it to other countries.  (If you were planning on sending a shipment to a physical store, or a warehouse, in another country, for example.)

You can apply online, it takes around 5-10 minutes to do, and around a week to get your number.  It can then take another 48 hours until you can use it.  My best advice is to apply as soon as you know you’ll be needing one – so before you arrange an order of your product from outside the UK.

Something worth checking if you already have an EORI number is that it starts with a GB.  If not, you have until 1 Jan 2021 to apply for a new one.

And that’s it. Hopefully it didn’t take you long to read and each one shouldn’t take you too long to consider and implement.