Many people have exciting business ideas. However, turning those ideas into actual businesses can be challenging, particularly when the resources they have are limited. Though having sufficient resources can be beneficial in a variety of ways, starting out with significant debt is a common business mistake that small brands should avoid. After all, it’s possible to start a business on a tight budget. To do this, you’ll need to consider an array of options based on your work ethic, skill set, and knowledge of marketing.
Below are several ideas on how you can start a business on a tight budget:
1. Bootstrap Your Business Idea
One way of moving forward with a business when the resources you have are meager is to start with what you have—an approach that’s better known as bootstrapping. Essentially, bootstrapping involves starting your business off by developing the minimum viable product as opposed to waiting until you have all the financial resources you need to launch a perfect product.
For instance, if your business idea is to set up a chain of unique restaurants or cafes, you can start off with one shipping container restaurant then grow your business model from there. The beauty of bootstrapping a business idea is that you get a chance to evaluate how much you would need to build a product. Better still, developing a minimum viable product allows you to define the essence of your proposed product or business and distill it into its most essential components.
2. Build A Simple Product
Developing a complex product requires heavy investment. But, when you don’t have sufficient capital to create such a product but have a creative mind, making something that doesn’t require a heavy capital investment can be a great option. For now, you can think of an alternative product that can be sold at a price that’s several times the cost of production.
A great example is making a handmade product that can be sold online on sites such as Etsy, eBay, Bonanza, and Abe’s Market. You can build and grow a small business using this strategy by selling your products on different platforms. If you choose to do this, ensure that you keep your inventory updated on each site.
3. Sell A Service
Another easy way to start a business on a tight budget is to sell a service as opposed to a product. There are numerous services that people can offer based on their interests and skills. For instance, if you have skills in accounting, you can offer accounting services to people that need it either online or offline. Starting a business that offers services requires minimal capital investment because you don’t have to create a product.
The only thing you need to do is to develop a branding plan to ensure that your brand name reaches those that need your service. There are several online spaces where you can promote your services. Sites such as Skillshare, Fiverr, Upwork, Craiglist, and Taskrabbit are great marketplaces to promote your services. You can go a step further to create a website to showcase your services, experience, and even develop blogs to attract visitors.
4. Become A Reseller
Reselling products that are made by other companies is another great way to start a business on a tight budget. There are many entrepreneurs who have built large businesses just by reselling products that are already in the market via drop shipping, garage sales, or thrift stores. With drop shipping, you only need to create an online store then work with drop-shipping companies to fulfill orders. Alternatively, you can buy items in antique shops, garage sales, and thrift stores and sell them online or offline at a higher price.
5. Leverage Low-Cost Services
When you’re just starting a business, there are various services that you’ll need to get your brand up and running. These include logo design, copywriting, web design, bookkeeping, and many others. You can easily get these services at a much lower cost on freelancing sites like Fiverr and Upwork. For instance, a logo design service, including revisions, would cost anything between USD$10 and USD$25. To ensure that you get quality services, pay attention to service provider reviews and service portfolios before hiring a freelancer.
6. Maximize Business Incubation Services
Although they’re mostly set up within institutions of higher education, business incubators offer tech infrastructures like internet, administrative assistance, and internet connections to startups at no cost. They also provide free office space. When you’re starting a business on a tight budget, accessing these services for free can give your business the boost it needs by reducing recurrent costs for a few months until you can stand on your own.
7. Buy Stock On Wholesale
If you’re starting a business that sells products, consider buying your stock in bulk from wholesalers or distributors at a reduced price. The best way to do this is to find suppliers that are willing to help startup businesses. Such suppliers would be willing to prepare a budget plan with you while enabling you to reduce the cost of getting stocks for your business.
To connect with such suppliers, attend trade shows or just make direct visits to the distributors or wholesalers that supply the products you need. To get started, you’ll need to invest time in research. Find the contacts of sales representatives from such companies and customers who have worked with those suppliers. This enables you to protect your capital and also lay the foundation for rapid success.
Starting a business requires capital. However, raising the amount of capital you require can prove challenging. But this doesn’t mean that you spend all your time waiting to get the whole amount you need. If you’re passionate about your business idea, you can easily start it off on a tight budget and grow it with time, rather than waiting for a time when you have the entire amount you need. Apply the five ideas discussed above and start growing your business from scratch right away.