Starting a Small Business on a Budget
Are you interested in starting a small business? Maybe you have an idea that you think could really take off. Maybe you’ve thought of a service that would fill a need in your community. Perhaps you’re ready to turn your hobby into a money-making venture.
There’s just one problem: you don’t have a lot of capital to get your business off the ground. Does that mean it’s impossible to make your dreams of being a small-business owner a reality? Should you be looking into small-business loans or finding investors?
Small Start-Ups Don’t Need Big Budgets
The good news is that you don’t necessarily need a lot of cash on hand to start your business. In fact, if you plan things right, you can launch your new business for under $1,000.
Here are 7 tips you should follow if you’re starting a small business on a budget:
- Work from Home
One of the biggest expenses for any new business is leasing or purchasing office space. You can avoid that cost altogether by working from your home.
Whether you have a dedicated home office, or you work from your kitchen table, you’ll meet your business goals more quickly without having to pay rent each month. Plus, any home office space becomes a tax deduction if you use it for business purposes so be sure to ask your accountant about that.
- Keep it Simple with an LLC
You should definitely incorporate your company to keep financial and legal liabilities away from your personal assets.
This may sound like an intimidating process but incorporating your business doesn’t have to be complex at all. In most states, you can create a limited liability corporation (LLC) online for just under $100 without legal assistance.
- Spend Smart
It may be tempting to spend money on a logo, a robust website, slick marketing materials, or new technology. But keep in mind that large spends like that can really drain your small business budget without giving you much in the way of return on investment.
Make sure that every dollar is spent wisely and not wasted. Before you spend cash, ask yourself “will this help me get new customers, make a sale, or contribute to my bottom line?” If it doesn’t help you grow your business, then chances are, you really should not be spending the money.
- Find Free Publicity
Thanks to social media, you can get the word out about your product or service for free or at a very low cost. Be sure to utilize social platforms like Twitter, Facebook, LinkedIn, and Instagram to the fullest extent possible.
Submit a press release to your local newspaper for more free publicity. Local newspapers are always looking for content and like supporting local businesses.
- Create a Blog
Blogging is a powerful way to generate valuable exposure. Start a blog and position yourself as the expert in whatever you’re offering, whether it’s wedding photography or gluten-free baked goods. Make sure the articles are informative and will keep potential customers coming back for me.
- Do it Yourself
Employees can be another drain on your financial resources. So, understand that you’ll be doing mostly everything on your own for a while. You’re the marketing department, the customer service center, the fulfillment center, the accountant, and the CEO.
You’ll be busy for sure, but along with working from home, holding off on hiring employees is the best way to keep overhead costs down when starting a small business.
When you are ready to hire, consider bringing in a financial specialist, such as a bookkeeper or accountant first. These experts can help you keep costs on track as your business grows. Of course, if you don’t want to hire someone to do this manually, you could always consider using resource management software from Prosymmetry (see this page here). That could help you to keep an eye on resources, like finances.
- Stay Scrappy
Hopefully, your hard work and talents will begin to pay off and you’ll start to turn a profit. It may be tempting to spend some of those profits on office space, new equipment, or new hires.
But do your best to avoid that temptation. Continue to operate on as small a budget as possible. This will help you stay on track toward meeting your goals for business growth.
Smaller Budgets Lead to Smarter Long-Term Spending
Starting a small business on a budget certainly isn’t easy. You may wish you had investors or a nice-sized loan to get you off the ground. However, consider that having too much starting capital can be a double-edged sword.
On the one hand, you have the luxury of extra cash in case of unexpected emergencies or costs. The downside is that extra cash can give your business the appearance of early success and may lead to wasteful spending habits.
By starting (and staying) lean, you’ll maintain a more disciplined approach to your spending, which will serve you well as you take your company to the next level.