Limited funds don't mean the end of your business idea.
So. You have an idea for a multi-billion dollar business and are ready to launch it. The only problem? I have a limited budget. Will it spell disaster for your entrepreneurial dreams?
There are thousands of business owners, including myself, who do this. Want to know how to run your business on a tight budget? Read.
start a business on a limited budget
If you're not sure how to balance revitalizing your business with limited funds, there's no need to panic. He shows you five ways to do that.
1. Skip the Space
We live in a digital world. The important thing is that you have choices when it comes to business.
Depending on the type of business you're starting, you may not even need a brick-and-mortar store after all. In fact, 50% of his total business is home-based. So one of his ways to cut down on startup costs and stick to a limited budget is to skip space and work from home. Not to mention, you may be able to claim a home office tax deduction.
And if you choose to start a business from home, you are in good company. Famous owners of big companies like Amazon, Facebook, Microsoft, and Disney all started from home.
So, free up space in a spare bedroom, basement, garage, or even a storage room and drastically reduce the cost of renting or buying office space.
Are you unable to work outside the home all the time? You can also try places like local coffee shops, libraries, and parks (but be sure to protect your public internet connection with a VPN (virtual private network)).
2. Sacrifice the individual.
When I started my first business, I (along with my wife!) had to make significant personal sacrifices. I'm not talking about cutting expenses here and there. What I'm talking about is that during his first three years of owning the business, the hot dogs and mac and cheese went bankrupt.
I budgeted every penny. And for entertainment, I budgeted $6 a week to go out with my wife every Friday night (and then play Monopoly until the early hours of the morning). Our car's tires were bald and the brakes were worn out. We stopped buying new clothes. You get the picture. Sacrifices were made for my business vision.
Now, what sacrifices you will have to make for the sake of business depends on how much personal savings there are and how much additional income will be brought to the household. But I'm sure most beginning business owners will make sacrifices. Several personal sacrifice. After all, the average business owner does not make a profit for two to three years after starting a company.
And their salaries usually reflect that.
I'm not here to wage war on your avocado toast or iced latte. But I want to warn you here: if you're on a tight budget (or even if you have a little more), you'll probably have to make some personal sacrifices to grow your business.
3. Go shopping
It's easy to make rash decisions in entrepreneurship. Easy, but not wise. So before you jump on the next 'best deal', take your time and shop around.
Collect and compare prices such as:
- stock
- delivery
- business insurance
- Device
- supplies
- business vehicle
- office space
Before partnering with a supplier or investing in a new company car, find out if there's a better deal out there. Talk to different sellers and find out as much information as possible, including what deals they offer (such as large orders).
Additionally, you may be able to negotiate a better rate. Please remember. Relationships are important in business, so be respectful and don't get too heated when making better deals.
4. Don't ignore marketing
Don't have money for extensive advertising? that's ok. But you can't write off all types of marketing just to save a few bucks. In fact, marketing is one of the most important things you can do for your business. That is, if you want your customers to know about you.
Here are some low-cost marketing strategies you can pursue:
Want to get these low-cost marketing plans off the ground? Create a small business website, start an email list, set up social media profiles, and foster conversations about your business.
5. Consideration of external funding
If your business's budget is too limited to get your idea off the ground, there are other options. External funding can be sought.
There are many business financing options available in the form of loans, investments, credits and even grants.
For example, we may pursue external funding in the following ways:
- Small Business Administration (SBA) Loans
- Investments from angel investors or venture capitalists
- credit card
- bank loan
- crowdfunding
- Subsidy
- Loans from family and friends
Before deciding to use external funding, weigh the pros and cons of each option. Ask yourself lots of questions (and find the answer to each one!). Do you want to relinquish ownership of your business? Do you want to take advantage of a high-interest loan or line of credit? How easy is it to write a grant? And more.