Starting a new business can be a daunting task. It not only takes a lot of energy but also takes lots of cash, especially when you’re first starting out. Costs can begin to arise the moment you incorporate your business, leading to many wantrepreneurs jumping ship before the journey has even begun.
However, with recent advances in the internet and funding methods, there’s no reason why you shouldn’t pursue your dreams as a business owner.
In this guide, you’re going to see exactly how you can jump start your new business and sore to new heights, even if you’re completely broke. If you’re thinking of starting your own business and have little start-up cash, this will provide you with some useful, practical tips.
Bootstrap – Keep Costs to a Minimal
If you’re struggling for cash, your first priority should be to save as much money as possible. Working in a minimalist fashion can work wonders when you’re first starting out. This doesn’t mean you should lower the quality of your products or services simply to stay afloat. Instead, have a warm-up business which functions on the bare bones. Before starting anything large and serious, have a ‘business lab’ where you can experiment with new ideas without too much investment.
Don’t jump straight in with office space, staff, and cumbersome inventory costs. Start small, utilising a basic website and single service or product. Build some momentum and eventually start expanding your operation, branching out into new products and marketing channels.
Source Your Equipment Free with this Nifty Site
Believe it or not, there are a few ways to get free inventory without having to pay a penny. Sites like Freecycle allow people to list items they no longer want. Usually, these are items that are either being passed along or being thrown away. With a bit of digging you can find some absolute bargains, saving you £100s when compared to buying new.
Utilise the Power of Social Media for Free Marketing
Social media has become a huge force in the realm of business and marketing. You can now get instant access to millions of targeted people who are interested in your industry. If you utilise social media in the right way, you can successfully grow your company and brand fast.
You can start off by positing for free, sharing content, and engaging on various groups within your niche. Create a business page and share value with your audience, educating as well as entertaining. There are a million and one ways to use social media, so it’s up to you to experiment with various media formats and content to see what works best with your audience.
Some companies have started (and are still going) because of the virality of social media. They have established themselves as a key brand online and now reap the benefits. If you want a flood of customers and a ton of free traffic, jump on social media immediately.
Simplify the Business Model – The KISS Principle
When starting out it can be tempting to plan out a complex business model with products over here and subscriptions over there. However, this can be a bad idea if you don’t have the funds, resulting in the purchase of irrelevant materials that won’t help you get off the launchpad. The best thing you can do when starting off is to keep it simple.
Think of simple businesses you can start now. Consulting and freelancing are both easy service-based businesses you can start up with almost no cash. If you’ve got a pre-existing skill, you can utilise this and start working for people on your own terms. Even if you’re looking to start a physical product business, you can still source out cheaper suppliers and use drop shipping techniques to get your products out without too much cash up front.
Obviously, they’ll be costs that you just can’t avoid, such as legal fees. However, by starting smaller you can dodge some of the fees associated with larger companies. If you still want to file tax and income statements professionally, use a modern online payment processor such as Square or Stripe. Additionally, with some payment processors, you can get money upfront to cover initial costs, so you can deliver value with certainty that you’re getting paid for it.
Create a Following Early On
A top tip is to inoculate your audience into your culture. If you start creating a loyal following early on, you’ll be able to compound your success quicker. A loyal audience will advocate and defend your brand, as well as purchase any product you produce. If you can develop 1000 true fans who pay you £100 a year, that’s £100,000 in your pocket. It’s simple maths.
Got a Job? Don’t Drop it Just Yet
When building a new business, it can be a good idea to maintain your job during the initial phases. The last thing you want is to leave your job and struggle for the next 6 months while you cross your fingers and hope your business becomes profitable. Too many entrepreneurs fall into the trap of going ‘all in’, taking massive risks that jeopardise their success and well-being. Play it smart, keep your job; when the money starts comfortably rolling in from your business, you can begin to invest more time.
Outsourcing – Look elsewhere for the money
Some of you might have grand business ideas – ones that take a lot of start-up capital and more energy to jump start. In this case, starting your business with a lean mindset might not be entirely possible. However, there’s no reason to give up on your dreams just yet.
Outside funding is always a possibility for a new business and it’s not uncommon to utilise this source as means of getting the party started with your new idea. There are a wide range of external funding sources you can jump into straight away, some being more stringent than others.
Friends and Family
A readily available source of funding many inspiring entrepreneurs forget about is their close relative and friends. With the pre-built trust you have with them, there shouldn’t be too much friction when asking for a helping hand with your new business. Of course, you can’t just go around and borrow money from your friends and family without promising any payback. Make sure you take what you can repay.
Venture capitalists are more difficult to require but if you do, you’ll have a ton of extra support when starting your business. Venture capitalists are usually partnerships or organisations that invest heavily into new start-ups that show promise. Businesses are usually scouted out and already in existence.
Angel investors are similar to venture capitalists with the exception that they normally work alone. Angels are individual wealthy people who invest in companies in their early stages of development. They commonly exchange money on return for a small percentage of the company, which is more than worth it considering they bring both knowledge and experience along with them.
Loans and Credit
A classic form of funding involves simply going down to the bank. You can use your own line of credit with a business credit card or you can apply for a business loan. With the nature of the online world, it’s easier than ever to apply for a loan. You can even do it from the comfort of your own home. Some loans and credit cards are interest-free for a limited period of time as well, so if you can repay the money back quickly you might not have to suffer the burden of the interest.
Crowdfunding is a relativity new concept that is picking up steam among the start-up community. The process of crowdfunding involves asking the public for funding, sometimes with the promise of shares, as in the case of BrewDog. A lot of successful crowdfunded businesses usually have a strong purpose and meaningful goal, drawing people in by the masses to support the cause. If your new business has altruistic characteristics, crowdfunding might be the right route to take.
What Are You Waiting For?
Starting your new business doesn’t have to be fuelled by millions of pounds in savings. In the modern world, there are a variety of ways to save money, start lean, and outsource to give your idea the kick start it needs. With the methods detailed above, the probability of success if strong.
If you’re interested in diving into your next business venture fully funded, get in touch today.