Starting any kind of business often requires having plenty of initial capital, to help set it up and ensure that if anything goes wrong in the early stages you will have enough money to cover such problems. However, it is possible to start many different kinds of businesses when money is tight and your budget is limited.
Some types of business are easy to set up with only a three figure starting budget, from selling certain products to providing particular services. If you’re set on creating a company that doesn’t fall into any of these categories, then there are still ways to form such a business with a low starting capital.
No business can be started for free. Funds are required for various elements, even if you set up shop from home. Overheads such as a computer, internet access and many other supplies will be needed in day-to-day working life, as well as transport to meet clients where required. In order to reduce these costs, there are a few ways to negotiate. You could offer some free services, such as setting up a website for another company, in exchange for a laptop, or deliver leaflets for a day in return for a new desk.
Avoid Unnecessary Expenses
It can be easy to get carried away with the excitement of your new venture, so splashing out on 1000 business cards may seem like a great idea. Is it really though? Only if you go to many networking events will it be viable. It is important to be frugal with necessary costs when money is limited, so always choose the cheapest choice where possible, buying supplies and equipment second hand where the quality is still good.
Use Financial Help
In some cases, a limited amount of starting capital will not be enough to get your company up and running to the best of its potential. Here you may be better off making the most of financial help and loans available, such as guarantor loans from TrustTwo. Hopefully this will help your business perform well so it can repay any finances borrowed as soon as possible, when it starts raking in a profit.
Take Advantage of Freebies
Rather than spending a lot of your budget on a marketing campaign, make the most of free platforms that can prove just as effective. Social media accounts are free for businesses and an excellent way to create interest in your company. Local media outlets may also be willing to provide some free coverage, especially if it is a unique business idea you have, or they need a story to fill their pages. Get in contact, as the worst that can happen is them saying no.
Choose a Customer Funded Model
A customer funded model will supply your company with the cash up front, to reinvest and help the business grow. Setting up a business to run this way means that not as much initial capital should be required, as it should be sustainable from customer funds. Only if invoices and payments are made late can it prove tricky. These methods show it is possible to start a new business with limited finances.