10 Tips To Start a Business With Very Little Money, According to Entrepreneurs
Starting and running a business without massive funds can be challenging. As an entrepreneur, you have to be creative and resourceful to keep your business afloat when money is tight. However, it’s possible to not just survive but to thrive during lean times if you employ smart strategies and just keep going.
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GOBankingRates reached out to entrepreneurs to learn how to succeed on a shoestring budget. Implementing even a few of these suggestions can help you stretch your dollars further — and set you up for success. Good luck!
Don’t Advertise Unless You Must
Paid advertising can drain your funds quickly when you first launch your business. Avoid spending on advertising at all, especially in the early stages when you need to conserve capital.
“For now, I’m relying on referrals and my network,” said Geillan Aly, founder and CEO of Compassionate Math. “No one should be going into a business blind, without any sort of network. As your network starts to recommend you, you may grow quickly enough that you’ll never need to advertise.
“Recently, I’ve started cold emailing campaigns, but my list is so selective that it doesn’t cost me anything since it falls below the threshold for my mailer — again, the free tier. With such a selective list, this targeted approach has a high conversion rate.”
Targeted outreach to ideal potential customers is worth far more than untargeted paid ads — so use your network to generate growth for free, especially at the beginning.
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Prioritize Market Fit
Before spending on advertising, focus your time and money on refining your product or service and fitting in perfectly with your target market.
“The big driver of success for our startup has been the push to product/market fit,” said Robert Brill, founder of Brill Media. “Use every possible inexpensive or free means to determine product/market fit, and then spend money on marketing only once that has been achieved. You’ll know you have product/market fit when you can talk to people and they are compelled to buy from you. Then, you go to larger rooms, and they are compelled to buy from you.”
If you want to nail your product offering before you invest in any promotion or advertising, you need to test it thoroughly. Keep testing and making adjustments until your ideal customer is banging down your door.
Get Visibility Through Free Promotions
Gaining exposure for your business doesn’t have to require spending on advertising. There are creative ways to get in front of potential customers at no cost.
“One thing I do that doesn’t cost money but gets me in front of people is a lot of product demonstrations in my customers’ stores or really anywhere where I can be visible,” said Wendy Kushel, founder and chief growth officer of Wendala’s LowCountry Sugar Scrub. “I’m constantly sending out press releases and hunting for television or internet opportunities. It doesn’t cost anything to have the local news do a story or a blogger write something up.”
You can expand your reach exponentially without spending a dime.
Get Serious About Tough Money Talks
Having uncomfortable money conversations with clients or vendors can be challenging. Adopting a professional persona can help take the edge off.
“Dealing with finances can be awkward, especially when chasing payments,” said Floss Kelly, co-founder of TileCloud. “In our early days, I created a fictional persona, ‘Mary,’ to handle these interactions, which made the process less personal and more efficient. Mary was a tough gal; Mary didn’t let invoices slide and wasn’t worried about following up on overdue payments.”
Putting on a professional persona can enable you to have financial conversations in a straightforward manner without feeling uncomfortable. Let your persona be the bad cop so you can get the deals you deserve.
Be Frugal
Adopting a mindset and lifestyle of frugality can help you get by on less as an entrepreneur. Cut non-essential costs and be very selective with any personal spending.
“Fancy dinners have come to a complete stop,” said Kushel. “I’m a very good cook and service sometimes isn’t so great around here, anyway.”
She added, “Personal travel has cut back immensely. [I’m] happy being laser focused on my business.”
Committing to a frugal personal lifestyle will free up more of your income to put into your new venture. Be tough with yourself about what spending is truly necessary.
Find Free or Low-Cost Tools
Cutting expenses should start with an audit of the tools and services you use to run your business. Take time to research free or more affordable alternatives for everything from project management software to accounting and email marketing platforms. For example, you can often find free open source options and free tiers of paid tools that offer core features.
“I am very selective about paying for software,” said Aly. “In all honesty, I’ve found that most software isn’t worth the cost, and more often than not, a good spreadsheet meets most of my needs in these first few years. I’ve converted to paid subscriptions far less often than many others in my circles, without it affecting my revenue. This has taught me that most software isn’t worth it when you’re starting out. Using free tiers is also often good enough for a lot of businesses.”
Learn to DIY
For entrepreneurs, a do-it-yourself approach is invaluable. Learn to DIY anything you can, like building websites, designing logos, shooting videos and more. With free online tutorials, you can gain the skills you need to handle some of these tasks yourself.
Pro-tip from seasoned entrepreneurs: Outsource specialized work only when it’s absolutely necessary. If you handle these tasks yourself, it allows you to get your business running at a low cost.
Embrace Social Media
Social platforms like Instagram offer free marketing opportunities that every entrepreneur should take advantage of. You can establish your brand and start building an audience immediately.
“Start an Instagram account for your business right away,” said Kelly. “It’s a free way to connect with potential customers and get real-time feedback. When we began, we didn’t have physical products for content, so we used curated images that reflected our future offerings. It’s about engaging with your audience and building a community around your brand.”
Become an Expert
Position yourself as an industry expert by consistently providing value through quality content, advice and thought leadership. Share your knowledge for free on a blog, podcast, YouTube channel, social platforms and at in-person networking events. Becoming a recognized expert can expand your reach by cementing your professional credibility.
This can help give your business a much-needed early boost. Consider how you can share your expertise to build an audience as a trusted expert in your field.
Exercise Patience and Discipline
When finances are tight, succeeding as an entrepreneur requires patience and disciplined spending. Wait to make major purchases until incoming revenue justifies it.
“I set goals for the company’s revenue before spending more,” said Anders Blomqvist, co-founder of Cannabiva. “I waited until I could afford to buy something twice before purchasing it. I also made a rule that I would not buy a piece of equipment on credit if it didn’t directly lead to revenue for the company. The machine or asset needed to be able to make the money back within a period.”
Instead of impulse buying, carefully consider each purchase and whether it will pay for itself. A little fiscal restraint can go a long way.
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This article originally appeared on GOBankingRates.com: 10 Tips To Start a Business With Very Little Money, According to Entrepreneurs
