Starting a business on a shoestring
Most of us are not lucky enough to have a rich relative leaving a fortune to set up your own business.
This is where a bit of resilience, determination and sheer hard work come in - and a great business idea! In the early days, you may have to be more realistic and think about viable ways to start a business with little or no cash to splash.
Test the Market Make sure that what you produce (whether it’s a service or good) is actually needed. Find out what your market wants by conducting market research via social media or search engine. If you make an initial bad product choice, it can harm your reputation – even if the next product is better. So test your market to determine what your customers want, what problem you are solving, who they are and where they are.
Establish a Sound Business Plan Early On To gain funding from a credible source other than friends and family, you need a coherent business plan. To keep costs low, you can write it yourself, or pay a professional for a fee. Focusing on the numbers and being modest on the projected sales will enable potential investors to see how you forecast your business to grow. There’s no point starting a business if it is unlikely to create profit in the future.We are all in business ultimately to make money - and don't forget to pay yourself a salary.
Get Funding If you require funding from elsewhere to run your business, there are several ways to access it. The most traditional route is to ask a bank for a business loan. However, you should try to keep purchases made with this form of credit to a minimum to avoid getting into hefty debt. Don’t buy everything at once on a credit card, instead try to use your company revenue to finance your expenses. Specialist business funding is a great option and you find out more here.
Crowd funding options are also a consideration - like Kickstarter and CrowdFunder. These allow the public to invest small anonymous donations to a product they believe may work, in return for a reward. You may be able to take pre-orders via this platform too. Look out for competitions especially for for entrepreneurs such as The Pitch and the Responsible Business Awards. Know Your Service Strengths To generate cash, a service business is usually easy to set up and low cost. If you provide a service that you know people need, you can easily collect funds. These funds can then be built up to generate a cash flow for a secondary income potentially that is product-based.Map out your customer journey to maximise your customer experience. Ask for referrals and reviews to build your social proof and seo rankings organically.
Access Free Technology You don’t necessarily need a custom website to start with - but it's essential to have a custom domain. These are usually inexpensive and be sure to set 'auto renew' so you keep your domain year after year.
Promote your business for free within a few hours using an online website builder such as Wix or Squarespace.They’ll also host your site for free on their server. Use their search engine optimisation tools (SEO) and be sure to set up Google Analytics - again free so you can track what works and what doesn't.
Set up a Mailchimp account - it's free for up to 2000 subscribers. I also strongly recommend a blog to boost your credibility and create evergreen content. Signing up for Google Adwords can help websites climb higher in the search engine rankings. Adwords is free, but it costs to bid for a paid advert. Alternatively, understanding how to make a website appear higher in an organic search is efficient and free, so this can work well for a startup business.
Market Your Business for Free Tell everyone you know - friends, family, business contacts and past colleagues about your new business. Use social media to promote your business without spending money. Identify contacts with some influence to help you grow your customer base and raise your profile. Pass your business cards to everyone and dot them around the local area in cafes, social clubs, shops etc..
Sign up to Twitter, create a Facebook page and join LinkedIn - all free. You can also manage business accounts for free on Twitter and see who is tweeting about you or the product in real time. Make contacts with local media, and they may be able to provide you with some free publicity. Especially if you have a story to tell or your business is big news for the community and local area.
Networking events in your area to connect with like minded people in your area - you never know who you might meet and the contacts they have.
Replace Fixed Costs with Variable Ones Link your costs to your sales. For example, you could hire meeting rooms by the hour, hot desk by the day or staff by project. This means you can control how much you are spending and change costs quickly to meet the demands of your business.
It’s easy to hire freelancers through sites such as People Per Hour. There are companies who will take delivery of your stock, manage orders and pack them as well as distributing them to customers, all on your behalf. myWarehouse has no set-up fees, no fixed fees and no minimum contract, you simply pay for the service as you require it.
Look smart and be smart An excellent way to get hold of creating and printing materials such as business cards yourself is by using Vistaprint or Canva. If you are little tech shy then ask a reputable printer for help and they will do the whole process for you. This is an area not to be scrimped on with free and cheap looking cards - it reflects on your brand and business. How to Keep Your Business Viable Start Small Starting small allows you greater flexibility to tweak things to get them right, and creates a lower risk should the business struggle or fail.Small means adaptable and flexible, so you can adapt to change quickly - unlike the big boys. Build Your Business Around What You Know Make sure you use your skills and knowledge, at least for the first product or service. Venturing into uncharted territory can be difficult and will require you to rely on outside sources. Building a business on your personal expertise eliminates the need for excessive amounts of outside assistance. Be the expert! Understand the Law and business structure When it comes to legal and financial services, you may need help with contracts, patents and trademarks.The hellp of a professional is essential to ensure your idea or brand is fully protected.
In addition - accounts, bookkeeping, payroll and personal financial support. This should never be seen as a cost - as the savings you make in time and tax efficiency should outweigh the costs. A great accountant will be there to help for your entire business journey and add real value.
Read our article on 'Top 5 Reasons You Need an Accountant'
If you're starting a business and would like help from an expert, get in touch.
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