So. You’ve got your billion-dollar business idea, and you’re ready to launch it. The only problem? You’re on a bit of a shoestring budget. Does that spell disaster for your entrepreneurial dream? Nope.
There are thousands of business owners who do it, including me. Want to know how to get your business going on a shoestring budget? Read on.
Launching Your Business On A Shoestring Budget
If you’re not sure how to balance bringing your business to life with having limited funds, don’t panic. Here are five ways to do it.
1. Skip The Space
We live in a digital world. Point being: you have options when it comes to business.
Depending on the type of business you’re starting, you may not need a brick-and-mortar after all. In fact, 50% of all businesses are home-based. So, one way to cut back on startup expenses and stick to your shoestring budget is to skip the space and work out of your home. Not to mention, you may be able to claim the home office tax deduction.
And if you do opt to start your business out of your home, you’re in good company. The famous owners behind big companies like Amazon, Facebook, Microsoft, and Disney all started from home.
So, go ahead and set aside space in a spare bedroom, basement, garage, or even a shed, and cut the cost of renting or buying office space out of the picture.
Can’t work out of your home all the time? You can try a place like a local coffee shop, library, or even park (just be sure to secure your public internet connection with a VPN—virtual private network).
2. Make Personal Sacrifices
When I started my first business, I (along with my wife!) had to make quite a few personal sacrifices. I’m not talking about cutting back a couple of expenses here and there. I’m talking hot dogs and mac and cheese broke for the first three years of business ownership.
I budgeted every penny. And for entertainment, I budgeted $6 a week for my wife and me to go out every Friday night (followed by Monopoly until the wee hours of the morning). Our cars had bald tires and worn brakes. We ceased buying new clothes. You get the picture. Sacrifices were made for the sake of my business vision.
Now, the type of sacrifices you’ll have to make for your business depend on how much you have in your personal savings and how much additional income your household brings in. But I’m willing to bet most newbie business owners make several personal sacrifices. After all, the average business owner doesn’t make a profit for two to three years after starting a company.
And, their salaries typically reflect that.
I’m not here to wage war against your avocado toast and iced lattes. But I am here to warn you that, if you’re on a shoestring budget (or even if you have a little more wiggle room), you’ll probably need to make personal sacrifices for business growth.
3. Shop Around
It’s easy to make rash decisions in entrepreneurship. Easy—but not wise. So before you jump at the next “best deal,” take your time and shop around.
Gather and compare prices for things like:
- Business insurance
- Business vehicles
- Office space
Before you partner with a supplier or invest in a new company car, do some research to see if there’s a better deal out there. Talk with different sellers to find out as much information as you can, like what kind of deals they have (e.g., bulk orders).
And heck, you might even be able to negotiate a better rate. Just remember: relationships are key in business, so stay respectful and try not to get heated when working out a better deal.
4. Don’t Neglect Marketing
No money to take out a big ad? 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—if you want customers to know about you, that is.
There are a number of lower-cost marketing strategies you can pursue, including:
Want to get some of these low-cost marketing plans off the ground? Create a small business website, start an email list, set up social media profiles, encourage conversations about your business, and so on.
5. Consider Outside Funding
If your business’s shoestring budget is too restricting for you to get your idea off the ground, you do have other options. You can seek outside funding.
There are a number of business financing options available in the form of loans, investments, credit, or even grants.
For example, you may pursue outside funding in the form of:
- Small Business Administration (SBA) loans
- Investments from angel investors or venture capitalists
- Credit cards
- Bank loans
- Loans from family and friends
Before you decide to go with outside funding, weigh the pros and cons of each option. Ask yourself plenty of questions (and get the answers to each!). Do you want to give up ownership of your business? Do you want to take out a high-interest loan or line of credit? How easy is grant writing? And so on.