Start-Up Business Help
Discussion
Morning all - hoping someone on here can put me on the straight and narrow with regards to a business I am looking at starting up. I have no experience running businesses - hence the post on here.
You will have to bear with me as this will at times seem very basic to a lot of the more experienced and well built company directors on here. Certain details are left out for obvious reasons. I will be Person C in all of this.
A good friend of mine (who for the purposes of this exercise we will call Person A) runs a well established family firm in a certain part of Wales offering a certain type of home improvement product. They have recently become the sole registered / affiliated / qualified installer of a particular home improvement product which is relatively new to the market. (This particular product can only be sold and installed by manufacturer approved companies).
Said firm is well established in their part of the country and because it is a small, profitable family firm they have very definite areas of operation which they are not interested in extending, which do not stretch to the area where I live. Because of where they are based their overheads are a lot lower than where I live, and there is currently nobody in my local area offering this product.
My brother in law (who we will call Person B) has his own firm in the same town as me offering general construction services, who I have discussed this with and who would be interested in becoming an approved installer. I know the costs of doing this which we would share, and if we were able to sell 1 of these products the profit would cover the cost of completing the approval process.
In the area where we live I know there would be a market for this product, but as it stands there is nobody with the affiliation / training to offer it.
If I, as Person C wanted to sell the product in my local area, buy the product off Person A, and emply person B to install, how would I need to set up my business e.g. what insurance would I need?
The risk profile would be low (easy to say I know) as my only initial outlay cost would be the shared training cost with Person B. This is not something I am looking to develop into a full time career, purely make a few extra £ out of on the side.
It is worth noting that my general background is in Construction Management so I know a fair bit about the industry, what sells and what doesn't.
You will have to bear with me as this will at times seem very basic to a lot of the more experienced and well built company directors on here. Certain details are left out for obvious reasons. I will be Person C in all of this.
A good friend of mine (who for the purposes of this exercise we will call Person A) runs a well established family firm in a certain part of Wales offering a certain type of home improvement product. They have recently become the sole registered / affiliated / qualified installer of a particular home improvement product which is relatively new to the market. (This particular product can only be sold and installed by manufacturer approved companies).
Said firm is well established in their part of the country and because it is a small, profitable family firm they have very definite areas of operation which they are not interested in extending, which do not stretch to the area where I live. Because of where they are based their overheads are a lot lower than where I live, and there is currently nobody in my local area offering this product.
My brother in law (who we will call Person B) has his own firm in the same town as me offering general construction services, who I have discussed this with and who would be interested in becoming an approved installer. I know the costs of doing this which we would share, and if we were able to sell 1 of these products the profit would cover the cost of completing the approval process.
In the area where we live I know there would be a market for this product, but as it stands there is nobody with the affiliation / training to offer it.
If I, as Person C wanted to sell the product in my local area, buy the product off Person A, and emply person B to install, how would I need to set up my business e.g. what insurance would I need?
The risk profile would be low (easy to say I know) as my only initial outlay cost would be the shared training cost with Person B. This is not something I am looking to develop into a full time career, purely make a few extra £ out of on the side.
It is worth noting that my general background is in Construction Management so I know a fair bit about the industry, what sells and what doesn't.
Edited by tleefox on Tuesday 19th August 08:26
If I get this straight, you are buying the product, selling to the end user, but sub contracting the install?
If that's the case, from an insurance point of view, you would need:
1. your own public, products, employers liability insurance. the employers would only be required if you are employing anyone or engaging labour only sub contractors
2. you would need to ensure any bona-fide subcontractors had adequate liabilities insurance.
Without knowing more about the product (i.e type and value) I can't advise on other covers that may be prudent.
happy to chat on the phone or by PM if you want to expand on the above
If that's the case, from an insurance point of view, you would need:
1. your own public, products, employers liability insurance. the employers would only be required if you are employing anyone or engaging labour only sub contractors
2. you would need to ensure any bona-fide subcontractors had adequate liabilities insurance.
Without knowing more about the product (i.e type and value) I can't advise on other covers that may be prudent.
happy to chat on the phone or by PM if you want to expand on the above
Mr Overheads said:
Why would you buy the product from A? Where does A buy it from?
That was my first question too.1. Why not go into competition with Person A and become an approved distributor/installer?
2. What would stop Person B buying from Person A and cutting you out?
3. In the set up you suggest, Person D (another installer) could do better (and potentially undercut) you as they only have to worry about one lot of margin on the product when buying from person A.
insurance_jon said:
If I get this straight, you are buying the product, selling to the end user, but sub contracting the install
Correct - I'll drop you a PM.Mr Overheads said:
Why would you buy the product from A? Where does A buy it from?
Person A buys the product direct from the manufacturer. Person A then assembles the product before passing it onto an improved installer. The manufacturer only distribute the raw compontents to approved manufacturers (Person A) of which there are very few in the UK.UpTheIron said:
1. Why not go into competition with Person A and become an approved distributor/installer?
The set up cost and time of doing that would take it from being a small sideline to a full time business requiring significant investment to get going. UpTheIron said:
2. What would stop Person B buying from Person A and cutting you out?
Essentially nothing, but person B is my brother in law who, to be frank, is rubbish at selling and could not be bothered with that side of it. His profit would be in the price to install.UpTheIron said:
3. In the set up you suggest, Person D (another installer) could do better (and potentially undercut) you as they only have to worry about one lot of margin on the product when buying from person A.
True, but because of where Person A is based his costs are a lot less than if Person D came along who was based in our area, so I am confident that in that situation my total cost would be comparable, if not less than Person D.If you want some (free) advice about starting a business etc in Wales, give the Business Wales Helpline (part of Welsh Government) a call - 03000 6 03000 - the web site is www.business.wales.gov.uk
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