Starting a business can be exciting – the stuff that dreams are made of. But without enough capital to plough into your new venture, it will only ever be a pipedream. Money isn’t everything though. Using the right resources, you can launch a champagne business on a beer budget.
Not having enough cash is one of many common reasons to put off starting a business. Why? Because starting a business from scratch with next to no money is doable – provided you have the know-how. Look at it this way: if your business idea isn’t well thought-out and the execution of your business plan is less-than-stellar, no amount of investment can turn it into a money-spinner.
No two businesses are the same. Each has its own startup needs. Whether you need to foot the bill for equipment, supplies, your office, or a co-working space, here are eight ways you can cut costs without cutting corners.
1. Do what you do best
Venturing into uncharted territory may hold a certain appeal, but starting your business based on your existing skillset and knowledge base has two main advantages.
Firstly, because you’re already au fait with what you want to do in business, you won’t need to invest time, money, and energy upskilling. Secondly, you won’t have to part with any of your startup cash on outsourcing fees for consultants and the like.
The less you rely on external support in the early stages of your business, the lower your startup costs will be.
2. Wear all the hats in your business
As a new business owner with little or no capital, you’ll need to be all things to all people. You’ll be the chief executive officer, chief financial officer, and chief operating officer all rolled into one.
Once you start to rake in the profits, you can recruit staff or outsource. Until then, if there are different hats to be worn, you’ll be the one to wear them.
3. If you need assistants, try virtual ones
If, in your early days of business, outsourcing some of your functions is an absolute must, then hiring virtual assistants (VAs) may be the most cost-effective way to go about it.
VAs can be used to cover a multitude of tasks including bookkeeping, online research, database entries, social tasks, scheduling, and much more. You also have the added flexibility of being able to use them as and when you please.
Websites like People Per Hour and Fiverr have a ready supply of VAs. Signing up to the latter could even see you bag the services of a VA for the bargain basement prices. There are some real gems out there, you just need to do your due diligence. Check out their customer reviews and take it from there.
4. Work from home
Renting office space or a co-working space may be good for your ego, but it’s bad for your budget. While it’s possible to rent either relatively cheaply, it all adds to your costs column, which is something you want to avoid.
Why not try working out of a spare room at home? You’ll need to tell your insurance company that you’re running a business from home, but any increase in premiums will almost certainly be a lot cheaper than renting an office or co-working space. Also, cutting out the daily commute means less money spent on travel and, of course, more time earning money.
5. Consider the cloud for your computing needs
The cost of introducing IT staff, computer servers, and other applications can set you back substantially.
But low-cost cloud computing services, like those from Google and Amazon, can provide all the computing and storage capacity you need to run a small army. Costs are incurred on a month-to-month basis with options to scale up or down according to the size of your business.
6. Use free (or low-cost) DIY website builders
Nowadays, you don’t have to spend a small fortune to hire a web designer to build a website for your business.
The main advantage is that these DIY website builders mean that you don’t need any specialist web design skills to create a decent-looking site. Using drag-and-drop tools, even novices can have a website up and running in less than an hour. The only snag is that the free version of the sites tends to carry some form of advertising that, more often than not, can only be removed by upgrading to the paid version.
Of course, the DIY website solution isn’t suitable for every type of business and developing a truly professional website requires a truly professional designer. That said, it’s certainly better than having no web presence at all.
7. Get wise to word-of-mouth recommendations
While opinions are divided on the effectiveness of traditional word-of-mouth recommendations (compared to digital channels), it’s considered to be the most trusted form of budget-friendly advertising.
It costs you nothing to tell your friends, family, and ex-colleagues to spread the word that you’re in business. Just make some calls and send a few emails – whatever you have to do to get the word out. If your business appeals to them they may, in turn, use their personal and professional circles to refer it to a much bigger audience.
8. Leverage local (and social) media
Another form of advertising that can boost your business profile without breaking the bank is leveraging local media outlets. This means creating a buzz and getting everyone onboard your business – from local newspapers to radio and television stations.
Just as long as you’re up for a bit of quid pro quo – giving something to get something – you’ll save a pretty penny or two. The idea is to connect with as many media contacts as your Rolodex can handle and be quick-off-the-mark when it comes to meeting their requests to share your pearls of wisdom with their audience. The potential payoff is that your newfound media buddies could hail you as the local authority (that is, a thought leader rather than the council variety) and generate tons of free advertising for your business.
Then there’s the power of leveraging social media. But you don’t have to go the whole hog and sign-up to every major social media platform. Instead, look to set-up business profiles on those platforms most used by your prospective customers. Without falling foul of any stalking laws, you’ll want to be on the same sites as your would-be customers, whenever they’re on them. Then chat away. After all, conversations don’t cost anything.
Being frugal as a startup can mean the difference between a successful business and a failed one. It’s also a good exercise in discipline. Chances are, if you’re penny-wise at the start of your business, you won’t be pound foolish when things start taking off.