Five Tips to Help Start a Business With Limited Funds
There is a growing trend for people starting businesses with little or no start up capital and sadly, the failure rate for start ups is still extremely high. Fortunately there are a number of steps that you can take that will help you to control your costs, therefore keeping you in business longer and giving you the best chance of success.
If you are an aspiring entrepreneur, you have to accept that not everything will go to plan and you may fail a number of times before you hit upon a successful business. Given that you only have limited funds, it is important that your failures cost you as little as possible.
- Ask yourself if you REALLY need it – When many small businesses start up they go about purchasing all the things that they think they need to look like a business; office space, furniture, fancy swivel chairs, a few plants etc. Before you make any of these purchases think long and hard about whether you really need them. While it may be less convenient, many businesses can be run from a kitchen table with a mobile phone and a laptop until you have your first few clients. It is essential that you keep a close eye on your costs and don’t think that because things are cheap it is OK to go ahead and buy them. You may not have accounted for these costs in your plan and they very quickly add up.
- Be willing to learn – Don’t be fooled into thinking that you need expensive professional services to get your business off the ground. Rather than paying someone to build your website for you, invest the time in learning about WordPress and build a simple site yourself. The key is to do enough to win your first clients, then you can start to think about whether you need professional help with the site. This also applies to things like marketing, market research, recruitment, basic accounting etc. If you have a very limited budget, you can still pick up these skills through reading up on the internet or your local library. These are core skills that successful entrepreneurs should have a grasp of anyway, so it is a worthwhile investment of your time to learn about them now.
- Use freelancers – If there are tasks that absolutely require external expertise, think about using freelancers or contractors, rather than hiring employees, or paying lots of money for professional services firms. There is a wealth of talent available through sites such as PeoplePerHour and Fiverr that will be able to help you on an ad-hoc basis for very little cost.
- Barter – When you are starting out and cash is tight, think about how you can exchange your products or services in exchange for what you need, rather than cash. For instance, if you are starting out as a personal trainer, you could offer somebody your personal training expertise in exchange for help building your website. This has two major benefits; firstly you don’t have to worry about finding the cash to pay for these services, all it will cost you is your time, and secondly, it is a great way of getting a few clients on board to help test your product or service. If these initial clients like what you are offering it may lead to repeat business or referrals, which will allow you to grow your business with almost no expense other than your time.
- Start small – Starting small is all about understanding the limitations that a lack of funding will have on your business and not stretching your resources too thin in the early stages. While you may have big ideas to sell your product nationally via a series of TV ads, this isn’t going to happen without a substantial marketing budget. Instead think about how you can sell your product successfully in your local community and plan to grow the business organically over time. This also applies to things like market research. With tight budget constraints it wouldn’t be feasible to run nationwide market research campaigns to understand your target audience, but you could certainly do a survey of people in your own local area that would help to answer some of your questions.
Following these steps will help you to get your business off the ground with little or no start up capital, and ensure that you stay in business long enough to succeed. Particularly if you are selling a service, it is possible to secure your first customers before you have to invest anything substantial.
There is a wealth of information available about building a business with limited funds, and wider reading into this topic will help you get started.
- The $100 Startup: Fire Your Boss, Do What You Love and Work Better to Live More – Full of practical advice and tips that will help you get your business started. Also includes numerous examples from people who have been there and done it.
- Freesourcing: How to Start a Business with No Money – This outlines where you can find free business resources that will help you to get your business set up with little more than your time and persistence, covering everything from office space to stationary.
What other steps can businesses take to get up and running with limited funds?