You might think you need a large amount of financing before you can start a business, but launching a new company actually can be done on a small budget. As long as you have the ambition and passion, you can begin to make your business idea a reality fairly easily. Here are some initial steps you can take to start a business with little funds.
Know Your Market
One of the first things you’ll have to do is figure out your customer’s pain points. It’s not enough to simply know what your competition knows. You will have to research your market even more in depth, becoming an expert on the customers you want to attract.
“Slap a whiteboard on the wall and get to work figuring out how to solve the pain of your customer in a unique and profitable way,” writes Eric Wagner, founder and CEO of Mighty Wise Academy.
Keep Overhead Costs Low
If you can limit your overhead, you won’t need a large loan or investment to begin a business. Here are three tips to keep expenses low.
- Work from home. Leasing office space is often the largest expense for startups. If you can come up with a way to operate your company from home — at least at the beginning — you can invest much more of your profits into growing your business, says B & B Rare Books founder Sunday Steinkirchner.
- Employ low-cost services. There are currently numerous low-cost sites you can use to build your company, especially when it comes to branding and marketing. Online marketplaces such as Fiverr and Elance provide platforms for you to advertise and sell your products and services, says Sujan Patel, vice president of marketing of When I Work. Not only can you use such sites to build your customer base, you can contract branding and design work on these sites as well. For example, you can get logo designs with free revisions for as low as $5 to $25.
- Build an email list. Compiling a customer email list is a great way to generate sales with little overhead. Think of customer email addresses as online currency, writes Lewis Howes, creator of the LinkedInfluence training program. Free web tools from sites like HelloBar.com and AppSumo.com allow you to collect email information from people who visit your website. Once you build your email list, it’s then your job to provide them with value. With smart email marketing, you can cultivate a loyal customer base ready to buy any future products or services.
Look into Crowdfunding
Crowdfunding can be a great way to get some seed money to start any business. You can ask the general public to invest a little money in your startup and avoid taking on a bank loan or venture capital funding.
New laws are making it easier for businesses to raise money through public crowdfunding. Check out our blog post on how to launch a successful crowdfunding campaign for help.
Consider Incubators or Accelerators
Business incubators and accelerators are great to consider if you have little funding to start a business. As long as you’ve done your homework and can pitch a solid and workable business plan, these programs can provide you the financing, infrastructure and resources to launch and grow a startup, says Simplus CEO Ryan Westwood. Both types of programs are similar, except accelerators expect a much faster return on their investment and are looking for startups ready to hit the market quickly.
Launch Without Everything Being Perfect
The key to running a successful a business isn’t having every detail executed perfectly. It’s about starting small and always improving, says Howes. Don’t waste time perfecting your branding or website when you could be making sales and generating leads. Take pre-orders before your product is finished in order to bring in revenue.
Think of all the successful companies that have begun without a perfect product or service. In other words, in order for you to start a business, you have to bite the bullet and start a business.