In spite of the conventional wisdom, it’s always possible to start a business with limited capital. For instance, Domino’s was started with $900 after purchasing an operation called Domi-Nick’s pizza. Since they didn’t have sufficient funds to adjust the sign, they quickly edited the name instead.
You’ll always find constraints in your finances when starting a business, and you’ll also want to ensure you’re spending as little money as possible, whenever possible. Therefore, look for ways to cut your costs during these initial stages of your business. Here are a few tips to show how to start a business on a budget.
1. File-Sharing Service
File sharing is essential. When you’re working with a team, you can use services like Hightail and Dropbox to share files with each other and comment on them. You can acquire various plans for various budgets, until you settle on one that is ideal for you.
Google Docs is another great resource for sharing files and spreadsheets that can be updated by everyone on the team in real time. When it comes to sharing images, use Pinterest to save space on your hard drive. Pinterest offers secret pinboards that only members of your team can access. Plus, Pinterest will save the original URL where you got the image.
2. Setting Up Financials
Creating a business requires you to own a business checking account. If you do your homework, you’ll find numerous banks — and particularly local credit unions — that offer zero interest and free checking accounts for small businesses.
When it comes to invoicing and accounting, leverage the power of online resources like Soho that assist in the management of your books. When you first start up with them you can take advantage of the free trial period and basic packages they offer new visitors.
There are multiple online resources for tracking and timesheets as they tie into invoicing and accounting. Several of these tools allow for more than one user to import hours and monitor different projects, while others provide free basic packages limited to a certain number of invoices or contractor, employee, and customer profiles you create.
3. Doing the Paperwork by Yourself
There are many legal and financial issues that need to be addressed, such as registering your business. Even though many business owners prefer to pay a lawyer to do it for them, the majority of paperwork for a small business like an LLC or sole proprietorship can be handled by yourself with a little bit of research.
You can always find experienced business owners to offer advice and mentor you on some of this paperwork. When you visit the IRS site, you can access all the information you need regarding finances and paying your taxes online. You can find more information about handling taxes and setting up your books online through the SBA.
4. Building a Team
Social media is a cost-free, reliable way of looking for new employees. Develop job descriptions that you can post on file-sharing platforms like Google Docs, and share the link with prospective candidates so they can obtain all the details regarding the positions.
When creating your team, it’s critical that you be open about the current stage of your business. A majority of startups require employees to be very flexible and switch between roles.
5. Go for Quality Clients As Opposed to Quantity
A good client who is easy to handle and makes timely payments is better than three bad clients who cost you more, pay late and are difficult to handle. If you look at the time you’re taking to handle bad clients, you’ll probably discover that you’re losing cash. As for many aspects of business, quality is always better than quantity in the long run.
6. Create a Relationship with Your Banker
In case your business accepts checks or cash in payment for goods or services, take the deposits to your bank during operating hours and be sure to interact with the branch manager as well as the business banking manager.
At some point you will no doubt want or need a small business loan or line of credit, and it’s a real bonus if you can leverage the relationships you have with the people in charge. If they know and like you, they’ll be more likely to get you the funds you need to kickstart your small business.
7. Avoid Purchasing New Equipment
Businesses close down all the time. Hence it’s generally quite easy to acquire used material like manufacturing equipment, office furniture, and more at a good price. Contact your business bankers for this information. Bankers know the businesses that are liquidating and have equipment to sell. Often it’s the only resource the bank has to get some of their money back.
8. Don’t Get a Physical Office
Office space is costly, and you want to ensure that you don’t dig too deep into your budget. When you need to meet with clients, you can always hire a virtual office where you pay for the package that best suits your needs. If you need manufacturing space, you can usually find existing manufacturers to rent you space — and equipment if need be.
These eight ways of minimizing costs when starting your business will ensure you focus most of your budget on acquiring new clients and maintaining your current ones. Be patient and with any luck you’ll be able to expand when the time comes.