Luvachicken Posted April 5, 2013 Share Posted April 5, 2013 Does any one run their own cottage industry. What are the rules and regulations ? I came up with an idea and hubby said we could lose the house if somebody sued me If say, I was making jam, and sold it at craft fairs, how would things work if someone got ill from whatever I had made ? What happens if I sell whatever I make on ebay ? Do I need a company name and how do I find out if someone has that name already ? Where would I buy bulk stuff in which to get started ? It seemed like such a good idea at the time but now I'm not so sure - it's not making jam though. Quote Link to comment Share on other sites More sharing options...
majorbloodnock Posted April 5, 2013 Share Posted April 5, 2013 Forget for a moment where you're thinking of running this business; the term "cottage" industry is a little misleading. The important thing is how the company is set up. If you start as a sole trader, you are liable for the debts of the company, so anything you own could be at risk to cover what the company owes. If you make the company a limited company, you only risk losing whatever money you invested in the company. However, running a limited company has more stringent obligations in terms of how the company is run (registering the company with Companies House, publishing accounts and so on). Whatever idea you have may well be a good one, but the only way to decide whether it is a commercially viable one is to sit down and invest some time working out a proper business plan. Realistically, you'd have to do that anyway, since it's something any bank or investor would want to see the moment you approached them to borrow some money. However, it's not just for their benefit, since it really helps you pull your thoughts together into a readily understandable objective argument. Once put together, you will immediately be able to answer the important questions like: What are you trying to sell? Who are you trying to sell to, and how much do they really want what you're trying to sell? How much will it cost you to do business (i.e. how much money do you need to put in before you can get money back)? Can you get enough money for what you sell to cover the cost of doing business? What are the risks? Where is the initial money going to come from? Who else are you going to be competing against? How likely is it that you can turn a profit? Obviously not an exhaustive list, but as you fill out your business plan you'll find you're answering for yourself several of the questions you've asked in your post. P.S. Edited to add that things like people falling ill from your jam would probably be covered by public liability insurance which you would need to take out whether as a sole trader or as a limited company. It's another cost you'd need to factor into your business plan. Quote Link to comment Share on other sites More sharing options...
freddie Posted April 5, 2013 Share Posted April 5, 2013 pm'd you. Quote Link to comment Share on other sites More sharing options...
Daphne Posted April 5, 2013 Share Posted April 5, 2013 There is a lot of info online, including from HMRC. This should help you develop your ideas a lot more and answer many of your questions. Try looking up 'starting up a small business' as that will lead you to a lot of sites Quote Link to comment Share on other sites More sharing options...
Luvachicken Posted April 5, 2013 Author Share Posted April 5, 2013 Thank you everyone xx Quote Link to comment Share on other sites More sharing options...
