Whether you want to cash in on the booming medical marijuana industry, attract Instagrammers with your coffee shop, or start your own skating brand, California is a great place to open up a business.
The home of Hollywood has the largest economy in North America and provides entrepreneurs with better venture capital access than anywhere else.
But starting a business in California still comes with the same challenge that aspiring entrepreneurs around the world face, which is having enough money.
Just thinking about how you’re going to put together all the capital you need to start your dream can be discouraging.
But here’s a good way to think about it: every successful business, from mega-corporations such as Google and Disney, to the company who makes your morning coffee, all started somewhere – and that somewhere is likely a very small, cash-strapped place.
Granted, there were a variety of other factors that influenced their rise to success, but one that is universally applicable to any business is being strategic with how money is spent in the early stages.
To help you put your capital where it matters most, here are six ways to save money when starting a business in California.
While experience and failure give us plenty to learn from, so does the internet. Making informed, educated decisions is key to keeping your business afloat during its early stages of development.
Therefore, your first step should be to learn everything you can about the type of business you’re opening, your industry and your competitors.
The internet provides us with more than enough information on this topic, so be sure to consider each element involved in the creation of your business and educate yourself on it.
For example, if you plan to form an LLC in California, this guide by TRUIC details everything you need to know on the topic of how to start an LLC in California.
This will equip you with the necessary know-how that you need to make the right decisions from the start, especially when it comes to where you put your money.
Use Affordable Software Alternatives
Every business needs to (and should wherever possible) make use of software, whether it’s for accounting, word processing, communication, presentations, design or the plethora of other functions you’ll need to start performing from the get-go. Software solutions for these operations can take a serious knock out of your starting budget.
Fortunately, just about every type of major software has a free alternative, known as open-source software. Websites such as Sourceforge offer an index of open source alternatives to popular applications. For example, you can use Google’s free G-Suite for documents, spreadsheets, note-taking and presentations instead of Microsoft’s Office Suite.
Invest in Digital Marketing
In order to ensure that you have customers waiting at the door from the day you start your business, you need to invest in a marketing strategy as soon as possible. Traditional marketing methods such as radio, television and paper are incredibly expensive and ineffective compared to digital alternatives, so this is another time to turn to the internet.
For example, you can get started by listing your business on maps, classifieds and review websites. This will raise awareness and at least bring some attention to your business – free of charge. The same applies to starting social media accounts. It’s the perfect way to grow your audience and get in touch with your target market and other businesses.
You should also start a website for your business as soon as possible. This can be done for less than a few hundred dollars and will go a long way in raising brand awareness. In addition to being good marketing tools, digital marketing methods also provide valuable insights into your industry and your customers, so be sure to invest in one ASAP.
Hire the Right Employees
Assuming you’re opening a business that’s going to need a helping hand or two along the way, it’s important to find the right people to work with. While we’d all love to hire someone with years of experience and a Master’s degree in their field, your budget probably can’t yet accommodate for this and you don’t want to be left unable to pay their salary.
So, as counter-intuitive as it may seem, your best bet would be to outsource to freelancers or hire employees with little work experience.
In the latter case, less experienced employees won’t demand high salaries and will be eager to learn. Freelancers are affordable and don’t come with any contractual obligations for you to continue providing work.
If you don’t absolutely need staff members to be on-site for a full work day, you can outline your jobs as part-time work. This will save you from having to pay employees for just sitting around.
If you find an employee to be great at their job, try to keep them around as this will save you from onboarding costs later down the line.
The term “going green saves green” is very much applicable to starting a business in California.
An energy-efficient space will cost less money to maintain; and if you incorporate the eco-friendly approach to all aspects of your business, it can be leveraged as good PR for your marketing efforts.
Take it Slow
Amidst the rush of starting a new business, the temptation to take on everything at once can get to the best of us. While any effort to work hard and push harder should be commended, many aspiring entrepreneurs tend to get too caught up in taking on surface level tasks.
The result is less attention being paid to building the foundation of your business. This is why it’s important to take it slow from the beginning.
Even if it means sitting through your current 9-5 for a few more months, your careful planning and preparation will pay off in the end.
As you can see, much of what it takes to successfully start a business on a budget comes with knowledge, planning and of course, persistence.
There will inevitably be a few hiccups along the way, but what you learn from them has infinite value, so take them on with everything you have.