Starting a business now is very different to a few years ago – the internet has revolutionised nearly every industry and broken down the traditional barriers many people faced when starting a business. The shoestring budget seems to be the way to go.
According to recent research from PeoplePerHour, the average business now costs just £312 to start and 76% of micro-businesses are started for less than £2,000.
Here are some tips on keeping costs down whilst you get up and running:
Thrifty website ideas for a shoestring budget
These days you need an online presence from the early days of your business but, depending on your industry, you might not necessarily need a high-tech, all-singing all-dancing site from the start. Before you spend a lot on a swish website, consider creating a basic site yourself to begin with. There are plenty of free online tools to help you do this, such as WordPress.
In order to have your own domain, you’ll need to buy the URL and hosting (usually around £5-£10 a month, depending on the type of hosting). After that, you can pick up a free WordPress theme (there are plenty built into Wordrpress or download your own). A basic site should take less than a day to do, and you can consider upgrading later when your business is more established.
Retail: Save while you sell
There are number of retail marketplaces where you can set up your own online shop. Amazon, eBay and Etsy are all worth checking out, and most of them will only charge you when you make a sale (taking a percentage of the sale price) and/or a small listing price.
The benefit of using marketplaces like this is that they already have traffic and promotions in place, so once you upload your items you’re ready to sell! Once you’ve established your business, it might be worth weighing up the costs and looking at (the possibly cheaper) option of selling to customers directly.
Get more low-cost e-commerce ideas now – such as how to encourage repeat customers and capture data.
If you are looking to sell face-to-face, try local markets or pop-up shops and events to test the water before considering long-term bricks-and-mortar premises. You can use systems like Intuit Pay to take card payments, meaning you’re less likely to miss sales and you can secure higher sales (like this retailer did!). The fees for Intuit Pay are low and there’s no commitment – you just pay per transaction.
There are plenty of low-cost or free ways to market your business. Social media platforms, like Twitter, Facebook, YouTube, Google+ and Instagram, are free to use. The only thing it will cost you is time. The wonderful thing about social media is that it puts everyone on an even playing field – so if you have a clever enough approach, you can compete with established businesses.
Don’t forget online tactics such as Facebook advertising and affiliate marketing too, which can be very effective when deployed properly.
Attending networking events is also a great way to find out about other businesses and get the word out about yours. Many are either free or cost just the price of a cup of tea. Look up what’s on in your area – or you could start your own group!
Running competitions, getting creative with local PR opportunities and trading marketing opportunities with other relevant small businesses are also great low-cost ways to raise awareness of your offering. Get more ideas here.
Save on office space
Many businesses can be started from home, and PeoplePerHour found that 86% of start-ups begin in a spare room. The great thing about starting at home is that you can keep your shoestring budget low and some of your costs, like lighting and heating, for example, may be tax-deductible.
If you feel like you really need business premises from the word go, make sure you stay within your budget – consider whether desk space would do for now, rather than a full office, and also look into the potential opportunities for a sub-let or space in an Enterprise Zone.
Finally, make sure you’re well-armed to negotiate. For example, telling an agent that you can take the space quickly if the landlord is willing to negotiate on price could prove fruitful. Get more advice on securing low-cost office space here.
If there are other costs involved that you can’t avoid, it might be worth looking at whether you can continue in employment while starting your business in the evenings/at weekends. This gives you a security blanket and an opportunity to build up some money to pay for those costs.
Avoid a false economy
Don’t forget – there are some costs it’s not worth skimping on as it will cost you more in the long run:
- Legal advice: Don’t try to DIY! Legal wrangles are stressful and costly.
- Necessary insurance: Shop around for a good deal but make sure you have the cover you need. It’s not worth the risk of losing everything.
- Money management: Poor financial management is one of the top reasons businesses fail – good accounting software and professional accounting help will ensure you stay organised.
What are your tips for starting a business on a shoestring budget? What’s essential and what can wait?