How to know when your business is really an expensive hobby. Lesson 3: setting up shop at home

There is an endearing spirit associated with those who set up their businesses at home. Not only does it make for a great “humble beginnings” story but can save a lot of money.

We also succumb to the allure of setting up at home, though really we should have noticed that it was just delaying the inevitable.

Setting up at home

We were paying a pretty insignificant amount of rent for our office and small manufacturing site in Oxfordshire, which came to roughly £300 a month. However, we were only able to manufacture in small batches which meant our production and ingredient costs were relatively high. So high in fact, that after taking into account the other costs of our business, we were barely breaking even.

This led us to the think that we could make/save £300 by just setting up our business at home. We bought 3 big fridges to store our drinks in and worked from the confines of our bedroom.

I’m not entirely sure what the long-term plan was, though it clearly wasn’t going to be asking prospective employees to also work within our bedroom. However, we were desperately clinging onto the idea that if we got one big order, that everything would just fall into place. Upon reflection, such an order would have compounded our problems as we simply did not have the funds to meet the expectations of any large retailer.

So, if you think setting up at home is a way of taking one step back to take two forward, you need to be honest whether taking such a step back is in fact an alarm bell for a greater underlying problem – which it probably is.

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