Young Upstarts

All about entrepreneurship, intrapreneurship, ideas, innovation, and small business.

6 Tips For Starting A Business On A Budget

by Lewis Robinson

Starting a business on a budget is a formidable challenge, but it certainly is possible. It’s much easier when you don’t require lots of space or expensive equipment. Even so, there are some strategies you can employ to avoid breaking the bank.

Here are some tips for bootstrapping your business.

1. Work in a Spare Room.

One of the best ways to save money is to run your business out of your home, at least during the startup phase. This is the time when you’ll most need whatever money you do have available. You’ll be able to stretch it much further, if you can avoid renting an office. A spare room will suffice for as long as it’s feasible to continue working there. Make sure to check on the zoning laws in your area, to make sure there are no restrictions against operating a business from a residence.

2. Use Virtual Assistants.

Another important way to save money during the early years is to avoid payroll costs by employing virtual assistants. This will allow you to go longer without renting an office. You’ll also save a ton of money on equipment for your staff and thousands of dollars in employee benefits.

There are numerous freelancers available that might surprise you with the types of services they can provide. Remote contract services are far less expensive and can make it easier to target the exact type of expertise you’re looking for. They’re more flexible than the typical employee and you can increase or decrease use of their services as your needs change.

3. Lean Marketing.

The busier you are with day-to-day operations, the more important it is to have a marketing strategy that doesn’t eat up your time and money. Remember that you can’t take advantage of every marketing tactic that comes your way, especially if you intend to save money by doing the work yourself. Chances are, you’re going to be learning as you go, so you’ll have to avoid spreading yourself too thin.

Think carefully about where your efforts and resources are applied, so you can get the most for your time and money. Don’t cling to anything that isn’t generating results. If your email marketing strategy isn’t working, drop it. Maybe you’ll get better results from social media, review sites, or blogging. When you find something that does work, stick to it and work at making it better.

4. Be Frugal.

Avoid spending more than you absolutely must. Don’t pay a website designer, when there’s so many good software options that can help you design your own site. When you need equipment for your business, look for the best deal you can find. That might mean acquiring secondhand office furniture or upgrading your current computer, rather than getting a new one.

Think carefully about how much you’re going to use something before you buy it. A simple printer might make more sense than a four-in-one, especially if you rarely use the fax or scanner functions. It would be cheaper to get copies down the street, if you only need them a couple times a year.

5. Utilize the Cloud and Software as a Service (SaaS).

Before purchasing expensive software and equipment, do some research to see if you can find an online service alternative for a low monthly fee. There are subscription services like this for email, sales planning, CRM, project management, accounting and cloud storage.

Cloud apps make it possible to pay a manageable fee each month that can be scaled up or down, as your needs change. This beats purchasing your own expensive servers and hiring specialists to maintain them.

6. Develop a Budget.

Write down every penny you have to invest and calculate both your expenses and expected revenue for the next six months. Based on this information, come up with contingency plans you can follow if revenue falls short. These plans might include cutting expenses or working an extra hour or two each day.

Always remember to account for business and personal expenses separately. Your business bank account is not a piggy bank you should run to when you need personal cash. Be prepared to scale down your lifestyle for the first year you’re in business. Accept that it could be awhile before you can be certain that your operation will succeed.

As you can see, it’s not impossible to keep startup costs down. The key is to make the most of what you have available and seek less-expensive alternatives. Remember that the sooner you start making money, the sooner you’ll create the momentum necessary to move past this critical stage.

 

Lewis Robinson is a business consultant specializing in social media marketing, CRM, and sales.  He’s begun multiple corporations and currently freelances as a writer and business consultant.


This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.