Starting a new business is an endeavour of risk but is one that can be rewarding and exciting. Even if you have an excellent idea, you may not have the capital available to get your business off the ground. Getting a business loan from a bank is now harder than ever due to the general state of the economy, so it is time to think laterally to make your money stretch further.
The government has stated that it wants the UK to become a hive of activity for entrepreneurs and will be offering help to new businesses. In fact, already in 2010 more than 200,000 new businesses set up shop and many will have done so with little help from the bank or from government schemes for new businesses. So how did they do it with little capital and no bank loans?
• Work from home: Renting premises is probably one of the most expensive parts of running a business. It is a fixed cost that you have little or no control over and something which must be paid each month without fail. In the first few months of starting your business you may have little or no income coming in, so keeping business costs down is essential. Take advantage of your spare bedroom, loft space, garage or garden shed. Virtual office space is also a great idea. You can set up meetings at a local business centre to give your business a more professional edge. This controls costs and improves your business image.
• Don’t hire staff: Depending on your type of business, it may be better to avoid getting permanent staff until you know how well your business will do. Use temps or virtual assistants to help with your day to day running of your business. This can include virtual telephone answering services, administrators and professionals. You will only pay for what you use and can claw back costs at any time you need.
• Cutting computing costs: Setting up a website is probably the single most important thing you can do for the success of your business, but it is not necessary to employ an expert to do this for you. Use online templates to design a simple business website which will work well enough to bring in the first few customers. You can improve on this at a later date. Take advantage of computer software trials before you commit to buying expensive business software.
• Cutting advertising costs: Don’t rely on expensive marketing companies to get your name known in your industry; take some of the initiative yourself. Let your local paper know you are starting up and pitch yourself for a possible story. Use online advertising sources and directories which are often free. Leaflet your local area with details of your business and any opening specials or deals. Send out emails to your potential customers with links to your website.
Starting a business on a shoestring budget, with very little capital, can be a daunting prospect and you may feel you have thrown yourself in at the deep end, but by keeping most of your initial business expenditure down and launching your business initially from home, you will be able to survive until the profits out way the costs.
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