 Rwy'n dechrau. I'm a network engineer, service support guide by trade. I've spent quite a few years in that line of work. These days I sell electronic kits for a living. It's a bit of a jump. But I'm just going to go over some of the considerations, some of the choices I made. There's pros and cons, there's pitfalls you can fall into. But essentially, yes, this is some of the things that you can use to turn your hobby project into money now. Has anyone here ever designed any projects themselves? Great, in that case I can skip over number one, so you've all designed something. A lot of people are likely to say to you, hey, that's great. I like your widget, whatever it is. You could sell that. Of course you could, anyone could. Whether you can sell it for a living, whether you can make money out of it, whether you even want to, whether you just want to do it for the credit, for giving it back to the community or whatever, that's fine. But if you've got to pay a mortgage, if you've got cats to feed, etc., you're going to have to make a little bit of profit at the end of the day. So how do we get from that particular bull there? That was my RC 2014 Z80 computer in its very earliest iteration before it became the kit that now pays my mortgage and feeds my cats. So it's this time. There's quite a few things to think about if you are going down the route of starting a business. Do you want to be a sole trader? Do you want to be a limited company? Are you going into partnership with anyone else? As to what works for you, it's different for everyone. So personally I've gone down the limited company route. That also means things like I've got an accountant, I've got a trademark for my RC 2014 van and stuff like that. So there are implications there that you might want to look at which might suit what your widget does. It might not, you might look at it yourself. I'm not worried about a trademark, I don't need an accountant, I'm only doing it part-time or whatever. So these aren't a list of everything you have to do, but it's things worth looking at. Getting business insurance is worth looking into. Things like premises, are you able to work from home? Can you build your kits or whatever on a kitchen table? Do you need more space if you've got to go and hire a unit? Have you got to get an office? I'm lucky enough that I can dedicate a spare bedroom and a garage to the kits which I make. It's taken over the house a fair bit, but at the moment, I don't have to look at commercial properties, but that's a whole new consideration to look into for some people. You want to look at things like getting a business bank account and stuff like that as well, and setting up a PayPal business bank account because PayPal doesn't like you using your personal account for business stuff. So this is even before we've ever sold any of our kits. You still need to look at all of these kind of things. You've probably got to put some money into it as well. Now, whether you've got a whole load of money in the bank that you can support yourself while you build the company or do you need to take out a loan for it, there are angel investors out there for startup companies that will want a chunk of your company in return for putting some money into it. So there's a few different ways for you to finance it. I personally took the bootstrapping approach whereby I sold only a very, very few boards, first of all, which meant I had a very minimal investment. I sold a few boards, I got some money in from that. That allowed me to buy a few more boards. That got me some more money. I could then start buying components and building up from there. So my initial investment was probably 50 quid for PCBs. So it's not a huge investment. Depending on what kind of device you're wondering about making, you might need to stump up money for tooling, for jigs or whatever. So you might need to look at funding it a little bit differently. Now, when you come in to sell it, where are you going to sell it? Now, there's obviously lots of places you can sell stuff online. If you could be hosting your own website, that's a whole route to go down in terms of are you a website builder? Do you want to maintain all the security stuff like that? Or do you want to use someone else's website? As you can tell by the t-shirt, I sell through Tindi. So if you go on to Tindi, you can find my kits on there. For me, that takes out all the hassle of running a web store. They sort out all the invoisting, they do the payment. I get delivery notes that I just need to print out. So all of that stuff is taken care of, which is great. You could also do similar things via eBay, via Etsy, various Shopify-type accounts, stuff like that. Or if you're looking at, it could be the thing you're wanting to sell, you actually want a high-speed store. So maybe you're looking at business premises with a shop front. Or you go around to trade events selling make affairs or selling through other types of direct interaction with people. In terms of getting yourself set up, you've also got to look at the marketing side of things. Now, one of the things that I notice with just about every other company I work for is the marketing team is always the enemies of the engineers. They're always coming up with all these ideas, we do this, that and the other. And the engineers are like, oh no, we want to do this, we'll just make stuff. It turns out if you're starting up your own business, you are a marketing person as well as the engineer. So you've got to start looking at things like promoting your social media brand, coming up with logos, doing all that stuff which may not be the sort of thing that engineers necessarily want to do. So you've got to get all of your promotional stuff, all ready to go so that people can find you. If people can't find your kids, if they've never heard of you, they're not going to buy them. So unfortunately marketing, it is a dirty word, but it's got to be done. So come to the pricing. Now, if you spend now £10 on a bunch of components make-up old, you can sell that for £10. Anyone could sell at cost price. But that's not going to pay the mortgage. That's not going to keep you going, keep you developing more stuff. So you need to look at what the realistic markup is. Now, typically the rule of thumb is two and a half times the cost of your bomb. So if all the parts cost you £10, sell it for £25. That's going to be in the kind of ballpark that will cover some of your losses. There's going to be some components that you get, which don't make it into production. I get a lot of connectors from China. Some of those haven't got all night pins in them or whatever. So you've got some stock right off. You've got to build your prototypes. You've got to go through iterations of stuff. So that two and a half times the cost of your bomb comes out to amortise some of what you're spending on all the other parts of it. And there's also things like the quantity discount. If you buy one chip or you buy 1,000 chips, all the cost for 1,000 is a lot cheaper per chip. But initially, from day one, I wasn't looking at buying 1,000 Z80C per use. That was a ridiculous number. I was buying five at a time. So I based my prices on relatively low quantities of stuff with some of the things I'm buying now. I'm buying a few mills of capacitors with 3,000 capacitors at a time. They work out way cheaper than the initial ones when I was buying them 50 at a time. So you need to look at things like that. I've gone on their currency fluctuations as well. Things like PCBs come from China. So the price of those will vary according to the pound against the dollar. Also, because I sell through Tindi. Tindi's an American website. So I sell in US dollars. That means that the price that I actually sell my kits for, it's not the same price today as it is tomorrow or yesterday because fluctuation. So you need to look at that, build those kind of equations into your margin so that you don't price it at the cheapest price you possibly can and then find there's a different fluctuation in your losing money. So it's worth taking into account. Then you've got to start to produce your kits or your product in terms of buying a stock. Depending what is your buying, some things are next day delivery. Other things might take three, four weeks, six weeks, even longer for some more specialised chips. So you need to take your older times into account. You've got to pay for the goods up front as a general rule. So before you can actually sell the kits, you've got to buy all the components. You've got to store the components. So that's a picture there. I've got rows and rows of tubes full of chips and chips and sockets. So there's probably 2,500-3,000 pounds worth of chips there that takes up quite a big chunk of space. So you need to look at, can you dedicate the space and the money to get yourself set up for that? Are you making a product which needs to be assembled? Have you got to solder it yourself? Are you sending it out to manufacturers for them to solder? So you need to look at that kind of things or building up the kits. Are you going to sit around a kitchen table on a Sunday night, putting components in bags? Or are you going to get that done in China? Are you going to piece Mealy out to other people to do? So that's something worth considering there. So assuming that you've got all your marketing right, you've got your pricing rights, you produce your kits, but once you've sold them, it's like, great. I've sold a kit, now I've got to ship it. Again, there's more to consider there like the packaging. One of the things I discovered fairly early on is that the Royal Mail has the large letter size. If you can keep your packaging to within 25 millimetres, that goes as a large letter. If this box was three or four millimetres higher, that's a parcel and that costs a lot more to post. So you want to make sure that you get your packaging down to the minimum size that you can, bearing in mind you've got to have suitable the packaging to protect your components. That could be bubble wrap, it could be ESD bags for ships or whatever. So you need to consider your packaging and the cost of postage, particularly if you're shipping around the world. It does cost a lot of money to send to some countries, other countries not quite so much, so that's something else to take into account. Of course, you've got to get the money now. Are you selling that to make affair with people who are headed over cash to you, in which case you've got to get yourself set up to be able to deal with cash, or take your PayPal. As I mentioned earlier, setting up a PayPal business account is relatively straightforward. There are PayPal devices which take credit cards now, and it's actually quite straightforward. So if you do sell through make affairs or whatever, and people want to pay by credit card, that's fairly easy to do. If you're looking at selling it to bigger customers, they might be wanting to do bank transfer. So you need to look at that, sign of things. Once you've sold it, and all your customers have got your product in their hands, it's like, great, great, that's not the end of it. You've got to offer support. The instructions of documentation is a big, big thing. I know mine is far from perfect, but there's a lot worse out there, that's for sure. You've got to spend time on documenting your product, writing a FAQ, doing troubleshooting tips. Even with all of that, you will still get customers that buy your kit, buy your product, put it all together, it doesn't work. Have they tried this, have they tried that? You've got to hold their hand, take them through a few steps. So all of that is some of your time that you could be selling other stuff, but you've got to spend your time on supporting the people that you've sold your kits to. I think some people, they only want to get in contact with you via Twitter or via email. I use Google groups a lot as well, but there's a lot of different ways that you've got to be ready for your customers to talk to you as they want to and need to. You will sometimes get customers which just aren't happy with a product or for whatever reason they need a refund or there's, you know, kits do get lost in a post. As a general rule, I've found the voile mail really good, only a few packages go missing, but that's still a few packages that if you're selling your 10 pound kit for 10 pound, well you've lost 10 pounds there, that's why you need the markup to cover those odd losses. And as far as it goes, it's a no point if a customer comes to you and says, oh, this package didn't turn up. There's really no point arguing and fighting with them and saying, oh, I think it did, I'm not going to send you another one. No, just if your price is okay to start with, you say, okay, it didn't turn up, there you go. There's a replacement, job done, happy customer, makes life a lot easier.