Having an idea for your new business is free. It’s also exciting and can make you want to get started on your plans right away. However, starting a business itself can be very expensive if you’re not sure what to do or what you should be looking out for. You might even feel that, after researching the costs involved, you can’t start a business at all, even if the reasons for doing so – having a better work/life balance, earning more money, more freedom and flexible working, showing yourself that you can do it, and being a good role model for your children, among many more – are good ones.
All too often this can mean those wonderful business ideas that might have been extremely successful are abandoned entirely.
It doesn’t have to be this way. There are a number of different ways that you can start a business on a very small budget, allowing you to see your plans through and bring your dreams to life. Read on to find out more.
Before You Begin: Don’t Skimp
Although this article is all about starting a business on a budget and not spending out on anything if it can be helped, it’s also important to know that there will be some areas of business that you will want to spend money on; areas in which quality is hugely important. This could include your branding (getting an expert to design your brand is a great investment as this is something that needs to be instantly recognizable), or perhaps the tools you need to do the work you’re selling, among a variety of other things.
The important elements of your business will be specific to you, and it will benefit you to spend some time determining what they are. Once you know, you can ensure you have enough money to spend in these areas because if you try to skimp at all, your entire business could be negatively affected.
Start A Side Hustle
Starting a side hustle might not be the idea you first had in your head when you decided you wanted to run your own business. You might have wanted to quit your day job and launch straight into your business, hoping to earn money right away.
The truth, however, is that most businesses don’t earn money right away, and if you don’t want to have to borrow a lot of cash up front (a potentially expensive thing to do, even if it can be done at all), you’ll soon have to find a new job and leave the business to one side. Unless, of course, you keep your current job and run your new business as a side hustle. Although this will mean a lot of extra work, it will also mean that you don’t need to worry about making money right from the start, and you can concentrate on growing the business more slowly, which is going to cost you a lot less overall.
Bartering is an excellent way to reduce costs when you are starting a business (and in fact, it’s an excellent way to reduce costs throughout your business life, and can be employed even when you’re making a profit). When you barter, you are essentially offering something of yours for something of someone else’s, and in business, this could be anything as long as it has an equal (give or take) value.
You might need some flyers printed, for example, for your hypnosis therapy business. If you can’t afford to pay for the flyers, you might offer the printer or designer a free hypnosis session instead. The idea works for any two businesses, as there will always be some kind of quid pro quo to reach. This won’t always work, of course; some business owners will only be interested in the financial side of things, and if that’s the case you’ll need to look elsewhere for the same service (or find the money to pay them). What you should never do is try to barter once you receive your invoice; unless the exchange of services has been agreed upon in advance, it would not be fair to try to make it happen later on.
Lower Your Living Costs
If you have no money to put into your business but there are some things you need to pay for regardless, it’s far better to start by lowering your living costs than it is to put those things on credit or start borrowing before you know that your business will be profitable enough to pay the money back.
If you can lower your living costs, you’ll automatically have more money to spend on your business. This means there will be more chance of launching, and less stress involved. Of course, you should never go without, or let your family go without, if you are going to try this, but there will always be some things that you can reduce. For example, if you have take out regularly, use the money you would have spent on that to fund a Facebook promotion, or to buy the printed shirts you need, or anything else. It might only be something small, but if it adds to the business then it’s clear that every penny is going to count.
Involve Like-Minded Individuals
If you have a great business idea but you can’t afford to start the business, have you considered finding like-minded individuals who can help you? From finding a mentor who can give you tips on how to save money or what to do about your ITIN application, to business partners who can halve the costs, or even investors who can fund the entire venture leaving you free to carry out the work, when you are no longer working on your own, plenty more opportunities will present themselves that never would have happened if you have continued to try to do everything all by yourself.
There are various ways that you can try to find these people. Asking friends and family is one option, although do be aware that, if the person you are thinking of working with has a lot of passion and loves what you’re doing but has no practical business knowledge and can’t help with costs, then they might not be ideal for you. You can also try networking. Networking is all about making connections with many different people, all of whom are looking for ways to build their own businesses or individual careers. There are plenty of networking events to try out (some are free, but some do have a cost involved), and these can be an ideal way to meet the people you need. Another option could be social media; look in business groups and you might find who you need, although always make sure you have done enough research to ensure they are who they say they are and will be able to help you.
Perhaps the biggest expense that a small business is going to have at the very start is advertising. Premises costs can be negligible if you work from home, and staffing costs won’t exist if you’re the only one in the business – these are both things that can come later after you’ve started making money if you want them to – but if your forego your advertising, your business won’t grow because no one is going to know about it. Advertising is crucial, but it can also be extremely expensive. How can you get past this problem when you’re working on a small budget?
The answer is by targeting the right market. Even if you do need to spend money on your advertising, if you can target the people who are most likely to spend money with you and buy your products or services, then you’ll more easily – and more quickly – make any money back that you have spent. This will require extensive market research, but it will be worth the time taken to get your advertising just right.