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This week in the new ways to work from home series, we are going to be talking about Drop Shipping.

Click on the link to catch up on last weeks post on becoming a Bookkeeper.

Drop Shipping

This is a great and easy way to work from home selling online without the outlay of stock or storage and the stress of shipping the item as well.

What is Drop Shipping?

Drop shipping is where you generate orders by selling other people's products. Once an order has been received, you send it through to your supplier for them to then send out to your customers. You can also drop ship alongside an existing business, giving you more stock to attract new customers.

For every sale you make. you get a percentage of the sale. This is ultimately determined by you, the supplier will tell you the price they want and the postage and then you simply add-on how much you want to make on each sale.

What are the benefits?

• Low investment
• No need to find storage
• No postage
• Wide variety of products

Investment can be as little as £20-£30 plus a website on top. With drop shipping you get a percentage of the sale price, which means you will earn less than if you brought the stock wholesale but you have all the benefits as mentioned above.

To make drop shipping work, you need to find a good drop shipper, someone you can communicate well with, delivers when they say they will and provides excellent customer service as once the order has been passed on to them it is out of your hands. If they do not deliver what they promise then this reflects on you as the customer will not know it has come from someone else.

This is a great way to build an extra steam of income, especially if you are already selling your own products or want to start a shop on a low-budget.

Depending on your work you may constantly face the challenge of budgeting on a fluctuating income.  I’m of the opinion that like any successful business, smart budgeting is key to running a happy home, or at least doing it in a way that is stress free!

My current strategy has been in place for 7 years and it has served me very well, and through lean times too.  We have experienced everything from monthly income to redundancy, weekly income to fluctuating freelance income.  I’m pleased to say this system has seen us through all scenarios, good and bad.

The main part of the budget comes from Your Money or Your Life, which I highly recommend if you need a money overhaul.

Here’s how it works.

1. Write down ALL expenses.

Make a list of all expenses, include amounts for ‘unforseen’ expenses like white goods breaking and car repairs as well as direct debits and a realistic budget for food and fuel.

Being exhaustive in your list is best as that gives you a REALISTIC £ amount based on actual life, not what we’d like to happen ie. things never breaking.

If you class holidays as a necessity then add a budget in for those too, as well as an allowance for Christmas and birthdays.

2. Working out the monthly bill

Yearly expenses – divide by 12 to give you a monthly figure.
Monthly expenses – can be added as they are
Weekly expenses – x52 then divide by 12 to give you a monthly figure
Unforeseen/adhoc expenses – guesstimate the yearly spend and divide by 12

Tip –  Round all expenses up to the nearest 5 or 10, this creates a buffer for those times when expenses exceed what was expected.

Now add everything up to create a total monthly expenditure.

You now know how much you need to make a month to ‘break even’, that in itself if a useful thing to know if you’re a freelancer!

3. Allocating money for bills.

If you’re paid monthly then allocate the monthly bill figure to a bill account before any other expenditure.

If you’re paid weekly as we are, times your monthly bill by 12 and divide by 52.  This is the weekly amount you need to put away.

If your income comes in sporadically then transfer all income to the billing account each month until you’ve reached the total bill figure.  You may need to make up a shortfall from your savings pot some months (see below)

4. Day to day living and paying bills

All bills and direct debits should be paid from the billing account.  Fuel expenses and food budget should be drawn from this account weekly or monthly.  The budget set for the family holiday or Christmas should also be drawn from this account.

What about when expenses change?  If you have a spread sheet that calculates your expenses for you as I do then you just adjust the figures and acknowledge the new total bill.  If not you can do a check every quarter to ensure expenses are the same.

5. What to do with ‘surplus’ income

Some months there may not be anything left over, that’s life I’m afraid and where you may have to dip into savings (see below).

Other months there may be plenty left over.  Allocate a % for savings,  a % for paying down debt and a % for treats and luxuries.

Allocating money to savings and paying down debt is absolutely essential during ‘feast’ months as this will see you through the quiet periods.  It also gives you a pot if you fall short of your total bill amount, you may have to dip into the savings pot to make up the shortfall.

And that’s it.  This system accounts for nearly all the expenses you can imagine so you will start with piece of mind and a clear £ amount that you need to reach to break even. Good months will see you squirrelling money away to smooth over quiet months and slowly but surely you will build up a savings pot which will add to your piece of mind

Do you have your own budgeting system?  What tips would you add?

Looking for ways to make money? Want to work from home? Then this series is for you.Over the coming weeks we will be sharing some of the many ways you can work from home. Ranging from side hustles to full time businesses, there should be something for everyone.

First in our new series Ways to Work From Home is ...

Bookkeeping

Are you good with numbers? Organised and understand spreadsheets? Then this may be the ideal job for you. But, what is involved in being a Bookkeeper?

As a bookkeeper, you will no doubt be working for other small businesses who do not need their own full-time bookkeeper. You may have already have experience as a bookkeeper or may want to retrain or learn as you go along.

Benefits

• You determine how many clients you work with and have control over how many hours you want to work
• Ideal for working from home
• Fits around family.
• Help other small businesses
• Can be done alongside part time job

Consider

• Need to be well organised, methodical and enjoy working with numbers
• Clients need to be able to trust you.
• Marketing your business will work better through networking and referrals as opposed to leaflet drops
• Answer questions through online forums and Linked In so people can get to know you and how you work
• Building relationships with accountants as they often outsource to bookkeepers.
• Low cost start-up idea, although accounting software can be costly as well as professional indemnity insurance and membership to a professional body
• Further training can help you expand your business

Further Information

• Institute of Certified Bookkeepers
• IAB