Taking the plunge and deciding to work for yourself can be a challenge and it takes a lot of personal strength and self-awareness to make that move. Doing so when you have minimal money to put down as capital is an even bolder move, but lack of funds shouldn’t necessarily be something that stops you from achieving your goal of being a sole trader or small business owner.
Whilst doing so may well be especially challenging, starting up a business with a small amount of funds as capital can be done if you consider the following things.
Keep overhead costs as low as possible
Overheads are the minimum operating costs that you need to pay out to keep your business running – things such as utilities, the cost of renting an office and marketing costs are all considered to be overheads. If you know that your cash flow is limited in the early days of your business, then ensuring that these costs are kept to the bare minimum is essential.
If you need a space to work, then find something that is cheaper – do you really need to be in a fancy office building from the offset? If your business has only a small number of employees, then you could consider renting co-working spaces – these are usually very reasonably priced per month, and you won’t have to worry about additional costs like utility bills for the space.
If you can, you could even hold off on paying for an office space – unless you need to meet with customers in an office environment, then there is absolutely no reason for you to pay out significant amounts of money when you are just starting out. Keeping your overheads low is one way of helping your business become, or remain, profitable and reduce losses.
Don’t be tempted to borrow money from credit lenders or payday loan companies – their interest rates are usually very high, and you have no guarantee on returns – this will mean that you’ll be paying out even more money when your chances of going under are at their highest. Pay for things through debit payments, not credit.
Only spend money if it will benefit your business
While the temptation to dash out into the business world and dazzle your future clients with fancy equipment and gifts may be especially tempting; you need to consider whether or not spending money on things will directly benefit your business and its profits.
Do as much as you can within the business rather than hiring external individuals to do it for you. Keep your costs low and make sure that every pound and penny is accounted for – it will benefit you in the long run.
Buying equipment brand new can be costly so if there is something you need to purchase to be successful within your business, look into whether or not it would be possible to hire the equipment and pay for it on a monthly basis. This means that not only are you not paying out over the odds for everything you need before your business has started to generate income, it also means you’re much more stringent about what you actually lease. You are less likely to lease something spontaneously, and you will ensure that every penny that you are spending on the business is reflected by potential profit.
Market your business well – and take advantage of free services
Marketing your business is probably one of the most important things you can do to make sure it flourishes – but you need to make sure you’re doing it properly. Quality is definitely more important than quantity as far as marketing is concerned – you want potential customers to remember your business for all the right reasons, but you also need to make sure that you don’t go overboard and spend vast amounts of money on marketing and advertisement before you’ve actually earned anything to justify the spend.
Using online services such as social media to spread the word about your business is both free and incredibly useful, especially if you’re using the right optimised keywords and building strong rapport within your business’ industry. You know your business best, particularly when you’re just starting out, so developing a strong marketing strategy to acquire new clients should be at the forefront of your business plan- it just doesn’t have to cost the Earth.
Building a presence, both online and in the community, will make your business stand out and be remembered. Customers are more likely to consider a business if their brand stands out to them as being memorable – portray yourself in the way in which you would like to be referred to and take it from there. Word of mouth is an enormous thing in the world of business so a positive interaction between you and a potential customer could result in additional customers being swayed to take advantage of your services.