Is it easier than ever to get a new venture off the ground at reasonably low cost? Maybe. Whilst access to finance remains challenging, developments in online technology have made it easier than ever to build brands, promote offerings and communicate with customers.
There are finance options out there for startups, even discounting normal bank debt. Crowdfunding and seed capital platforms, government-backed startup loans and local enterprise grants all present opportunities for some. But what about starting up with no finance at all? Here are some ideas for how you might be able to do just that.
Inventory your existing resources
What resources do you already have that you could leverage? A home from which you can operate? A car which could be used to distribute your products or visit potential customers or suppliers? A wifi connection?
Inventory your skills and networks
What skills do you have that someone else might be happy to pay for? What networks (professional or social) could you leverage to help you develop, produce, market, sell or distribute your product or service?
If you already have a job, it may be an idea to keep it until you are sure that your new venture has wings. It’s less risky and will help sustain you during the early, possibly tough days of your startup.
Do everything yourself
As far as possible, do everything yourself. One of the challenges – but also one of the fun things about being self-employed – is mastering all sorts of different skills, from marketing and people management through finance, operations, sales. Once your business has grown, you can then think about employing someone else to do some of these things for you, or even outsourcing some things.
Build your own website – it’s easy with Wordpress. Build your business’s social media profile on Facebook, Linkedin, Twitter. Write interesting copy for your local paper. Do your own market research. Use free accounting software. Every penny saved is a penny earned…
Sell something that people need
In the end, it’s all about offering a product or service that solves a customer’s problem or gives them some benefit they want – and (ideally) doing it better than anyone else. Focus on what your customers need. It’s generally easier to start with something low cost that meets a necessity, rather than an expensive luxury product that few will buy.
Get a mentor
If you can, find a mentor – someone who’s been there and done it before. If you can learn from, and avoid making, some of the mistakes they could share with you, it’s all to the good. Your mentor could be someone from your present or past, or perhaps someone in your network could put you in touch with the right individual.
Watch your costs
Keep your costs low. Also, as far as possible, avoid incurring fixed costs. Variable costs are easier to control in the short term. Fixed costs - which you incur whether you make a sale or not – are to be avoided where possible. Hire by the hour or day, not by the month or year.
Get free equipment
If your business needs equipment, try to source it for free. There are many online resources where you can do this, including Freecycle, Gumtree and various others.
Get paid up front
If your startup provides services, try to get paid upfront, not in arrears. This can save you a fortune in credit costs, as well as mitigating the risk that you don’t get paid at all.
Seek free advice
Search for free advice, events and resources that will help you build or run your business. Chambers of commerce may be a good place to start if there is one in your area. Business Gateway may be of help, if there is one in your area. There’s a ton of free resources online too, though sorting the wheat from the chaff can be a challenge.
Finally, try a chat with an accountant who wants to support someone like you. At Scholes CA we’re always happy to spend time with someone who is trying a new venture, and happy to dispense some free advice and guidance too. You can even download our free Guide to Starting a Business. We love to support entrepreneurs.