How to Start a Business with Limited Funds
Owning and running your own business can be the most fulfilling occupation in the world. Unfortunately, some businesses require quite a bit of capital to get started. Opening up a barber shop, for example, means leasing a building and purchasing chairs, mirrors, and grooming tools. Other businesses – like an auto garage – require even more significant investments.
Yet, there are some businesses you can get up and running with relatively limited funds. You just need to know how to determine whether a given business is both inexpensive to start and something that you’re interested in. You also need to know where to cut costs, and where you need to keep the cash flowing.
Here are some tips that can get your business up and running with limited funds:
- Identify a business with a low cash barrier to entry. Depending on your education, experience, and skillset, there are many professions that don’t take much in the way of cash to get started. For example, someone with a background in graphic design can get off the ground with the computer equipment she already has. A carpenter may be able to get started using tools he already owns; he’ll get the cash to purchase building materials from a project deposit. Retail businesses, on the other hand, tend to require quite a bit of capital, as do manufacturing businesses that require expensive machinery.
- Learn to wear many hats. If your business is going to be successful and grow over the long term, you’re eventually going to want to have other people perform certain job functions. Accounting or marketing are tasks that experts can do more efficiently and effectively than you can. In the beginning, however, you can save money by doing some of these things yourself. Keeping your own books or learning to use social media to promote your business are all valid options when you’re first getting started.
- Put the power of networking to work for you. Your first customers are likely to be friends, family, and those that are more or less inside of your circle of influence. Learn to establish a strong rapport with those first customers. It’s those early customers that can become some of the strongest brand evangelists for your business. Connect with related businesses that aren’t direct competitors, and establish partnerships where you can send customers to them and they to you.
- Look into angel investors. Depending on your business idea, you might be able to find other people willing to back you financially. It might be that they’re passionate about your idea, or it might be that they believe you’ve got a workable business model. Seek investors that can contribute to the business in a number of ways, such as offering direction and advice rather than simply writing checks.
- Consider a partnership. Your business can get off the ground faster if you have someone else backing you up. Rather than seeking out investors who are only interested in turning around their money into a profitable venture, consider working with someone who can contribute to the business in substantial ways beyond just money. Look for a partner that’s willing to participate with you, to mingle their blood, sweat, and tears with yours. Make sure the partnership is truly equal, or the partner isn’t going to be invested and you may find out they’re not doing their part.
- Don’t skimp on your brand image. This is one of the biggest blunders businesses make when first starting out. Someone figures out how to put up a website, and they do so without any real experience with design or copywriting. A website with poor design and poorly-written copy will not help your business grow; in fact, it will probably cost you business in the long run. If you can’t yet afford to hire someone to help build an effective website, consider focusing on a simpler medium like a Facebook page or a Twitter feed in order to get the word out about your business.
- Provide stellar customer service. Today, consumers don’t buy products; they buy customer service. If you’re providing world-class customer service, your business is going to grow. Your satisfied customers will multiply quickly. Conversely, a single dissatisfied customer can cost you significant business, especially if you’re operating your business within a certain geographic area. Pay extra attention to customer expectations during those early days and you’ll be more likely to have many more days of business down the road.
Don’t let a lack of funds discourage you from pursuing your dream. Implement these principles and you’ll find yourself well on your way to making that dream a reality.