No money? No problem
Thousands of people each year are starting small businesses on a shoestring. Many of them are still in full time employed work but want a fall-back position in case they’re included in the next round of downsizing, or they need to generate more income to meet rising food and fuel bills.
One thing that almost all of them have in common is the shoestring budget, or to use a more popular business term, a bootstrap start-up approach.
How business used to work
Let’s look at this historically for a moment. Thirty years ago you found a gap in the market. You wrote a business plan on an envelope and took it to your bank manager. If he liked your idea and you seemed credible he would approve an unsecured start-up loan for your shiny new business account. He might even offer you an overdraft facility just in case the set-up costs were a little higher than you anticipated.
Banks and Lending attitudes
Now it seems that the banks are only lending to companies that already have squillions in assets but might be experiencing short term cash flow difficulties. The average Joe or Joanne is all alone and unless you are prepared to give personal guarantees or hock the family home you HAVE to bootstrap to get your business off the ground.
Money Tip – Shop around for a free business bank account and forget the frills they offer, you do not need their legal, accountancy or other packages at the start – you either do not need them at all or can get at a lower cost than the bank’s monthly fees for these additional extras they offer with the free business bank account.
Bringing in business
We know, thirty years ago there was no mass media tool called the Internet. With Linked-In, Twitter, Facebook and a hundred other networking sites you’re never really alone. You already have a potential audience for your fledgling business. Moreover, you don’t need to have leaflets printed to get the word out (although you might want to consider some if your business can only operate locally).
Business Tip – You need a sale not preparation for a sale for your business to work. Get selling fast if you want your business to work. Don’t perfect the wheel before you try to sell one!
Jobs – v- business
Remember that a business is not a job and that business income isn’t the same as wages, so if your long term plan is to make £15/hr you’re not really in business – you have a job that enables you to work for a lot of different people without any job security.
Designing a few logos or a website for someone through a freelancing site is just a job unless you’re charging realistic money for the service – it doesn’t mean that you have a design business.
The only way for your business to really be a business is if it provides you with a reasonable income, covers your Income Tax and National Insurance contributions, covers the cost of supplies, appropriate insurances, any transport needs and a host of other expenses that an employee doesn’t get to see.
Of course there are always people who don’t bother with any of that stuff; you can find them giving advice in the pub.
Business Tip – associate with business successes for motivation and advice. Ignore the rest.
Once you’ve decided what your business is going to be about and preferably before you’re ready to start it, you need to begin your research into your target market’s buying habits. It’s not as daunting as it sounds, but there are simple mistakes you can avoid.
The Internet as a community for start-up marketing has a major flaw in that like gravitates towards like. Anyone who has a thing about Hello Kitty is drawn towards Hello Kitty groups. Gamers huddle in dark corners and earnestly discuss fragging techniques. So, people hoping to sell home-crafted items link up with other crafters on social networks because it’s great to find someone with whom you have something in common.
If they can do what you can do then they’re not a potential customer and, from a ‘developing your business’ point of view, they are (sorry) a complete waste of your time unless you’re just using them to learn new crafting techniques.
What you need to find is a much looser and less business-crucial commonality so that you can interact with a group on a non-business topic and, when you have a lot of contacts (it’s much easier to develop contacts when you’re not trying to sell them something), drop into the/a/any conversation that you sell/do/make something that might interest some of them.
This is, admittedly, sneaky. It’s also an effective way into a potential client base that you would not have otherwise reached. If you’re time-rich and cash-poor you might find that you’re onto a winner. If you think that you’re time-poor as well, whenever you log in to a social networking site just to be social, go to online-stopwatch.com first and start the stopwatch. When you log out, stop the stopwatch and make a record of how much time your business venture just lost. Don’t add it all up until you’ve been doing it for a month (you may want to sit down before you do). Buy some hankies if you’re going to see the lost hours as lost revenue. Buy some anyway because, potentially, it is.
The Power of an Image
If you’re selling product, whether it be cakes, catering, widgets, artwork, toys or any number of whatever’s, images are everything. Pictures attract people and attraction sells if they like what they see. If you can take a picture of something and hold the camera steady, in focus and with enough detail so that people can actually see what it is, you’re halfway there and it will do for now, but remember that you’re competing in an open market and some of your competitors will be established and profitable enough to use professional photographers.
It’s all about Image
A pro photographer will charge upwards of £400 per day. They have expensive equipment, some have years of experience and the price of a single camera could buy you an all-inclusive fortnight in Venice for a family of six….
This is just a sample from a chapter in the amazing business start-up bible, How To Start A Business With Little Or No Cash. Available from Amazon.
Gold Rank Contributor