Starting a business on a shoestring budget is by no means impossible, but it does pose some difficulties. Today we are going to have a look at a couple of things you need to keep in mind before you start your business with a small budget.
Starting a Business on a Shoestring Budget – What to Keep in Mind?
1. Writing Down a Budget
Before getting down to starting your business it’s a good idea to write down a budget. See how much money you must invest and include both revenues and expenses for the following 6 months. If the revenues aren’t exactly what you expected them to be, come up with some contingency plans. These might include cutting down on your expenses or allowing more time for the business to generate extra income.
2. Working from Home
Some people think that working from home isn’t that professional, but it’s a great idea if you’re starting a business on a shoestring budget. It helps you save the money you would have spent on renting an office, furnishing it, buying supplies, etc. However, you should check with the zoning office in your town or city to see if there is any restriction that forbids you to run a business from a residence. Moreover, keep your own records to avoid paying extra money. However, this shouldn’t stop you from learning how to get your business out there, regardless of where you work.
3. Online Business
The next thing you need to do is to decide whether your business will be present online or not. If you want to do it, you will need to budget for a web host. There is also the domain registration you also need to pay for, to which you must add the Internet connection. Consider also the graphics for the website. The bright side is that you don’t necessarily need to hire a website designer since there are plenty of design templates or software programs available online.
4. Virtual Assistants
Another great idea to cut down on some costs when starting a business on a shoestring budget is to use virtual assistants. In this way, you can skip the costs of office equipment, employee benefits, or payroll. There are plenty of remote contract services or low-cost freelancers which you can find online. You can even find the targeted expertise you need. The best part about it is that you can increase/decrease their workflow and resources as you learn to handle things by yourself.
5. Social Media and Marketing
Thanks to the fast ascension of social media, you don’t need to invest a lot of money in marketing. You can build and maintain your own website with the help of various online tools. Moreover, site marketing can be done for free through Twitter, blogs, Facebook, or other platforms. It’s a good idea not to reach for outside SEO (search engine optimization) until you are already making some profit.
6. Second-Hand Furniture
Whether you have decided to run your business from home or from an office you rented, it’s important to cut down the costs as much as you can. One such action would be to use second-hand furniture and equipment. They can be just as good as some new ones but at half the price. For example, you can upgrade a computer you already own instead of buying a completely new one. Don’t purchase the equipment you don’t need, such as a scanner if you don’t scan documents regularly.
Ideally, if you’re thinking of starting a business on a shoestring budget, you shouldn’t choose a business where you need inventory. Buying items and storing them for the purpose of reselling can cost you more than you expected initially. The perfect solution would be to find a source that lets you ship the product directly from the source to the customer. This means that you will pay for the product only when it is shipped.
8. Selling Products on Consignment
This means that the product owner lets you stock the product and only pay for it when someone buys it. In this way, you don’t need to invest money in buying lots of products. However, the downside is that you only get 20% of a sale instead of the standard 50%. Here, you will need to always have a contract in place for the goods you sell on consignment. Make sure it describes the product, as well as the number of units you agree on. This is a form of protection both for you and the owner of the product.
9. Performing Tasks Yourself
Naturally, if you want to cut down on the costs, you will need to perform plenty of tasks yourself. Any employee you hire means some extra paperwork, including expenses and tax forms, for instance. Outsourcing is another good idea, as we presented above, but it’s even better if you learn to do some things yourself (such as budgets, taxes, etc.).
10. Work Your Contacts
If you’ve previously worked in the field (or even if you haven’t), most likely you already have some contacts here and there. It would be a pity not to take advantage of them when starting a business on a shoestring budget in the same field. Call people, tell them about your ideas and ask them for help. Some of them might ask for money, especially if they’re offering you a professional expertise. In this case, you should consider investing in some expert help and advice, instead of relying only on friendship and free stuff.
Here you can see some suggestions The Telegraph made for such a business back in 2016, but they can still be used today:
As we said in the beginning, starting a business on a shoestring budget isn’t an impossible thing. However, it’s essential for you to know how to adapt to different circumstances and needs. Luckily, there are plenty of ideas to cut down on the costs, from outsourcing to using second-hand furniture and equipment or hiring a virtual assistant to help you keep up with the tasks. Finally, it’s a good idea to ask around for help or even an opinion. Remember to always seal contracts when you hire someone new, to protect your company, and to learn a couple of things yourself to save money.
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