So you have the greatest business idea since the invention of the wheel? That’s all well and good, but getting it off the ground requires money. Like most new businesses, you’ll have a very small budget and few resources to help make your dreams a reality. You don’t need to start working more than one job to fund your venture, though.
If you’re willing to become thrifty and well-informed, you can start your company and begin earning money on a small budget. Here are some of the things you should take into account when setting up a new organization.
Choose the Right Business
Businesses are different. Sole traders with a small stall in the local market aren’t classified as the same type of company as the huge corporation making millions each year. Every type of company has alternative tax obligations. Give yourself the best tax advantages by choosing the company with the fewest tax requirements.
If you’re willing to put in the work, it won’t cost much to set up a new business. You can convert your company to a different form of business once it becomes successful, though.
Banking
To run a business you need a business account. Business accounts are a legal requirement because of tax reasons. All major and minor banks offer business accounts. And every business account has different fees and structures. Shop around online to see which bank offers the best deal.
Don’t try to haggle with your bank manager. These are fixed costs and they can’t give you a special deal.
The main thing to take into account is the annual fees of keeping each account open. The transaction costs can also mount up. If you expect to make regular online transactions, get the account with the lowest fee per transaction.
Low Cost Marketing
Most start-ups make the mistake of getting their initial marketing drive wrong. To start with, you’ll need three major marketing materials; a logo, business cards, and a website.
The logo should come first. This is your central marketing tool. It should go on every piece of literature you release. You can find a designer cheap, or you can even offer work experience to local student designers in exchange for a logo.
Now you can start making your website. This is the main expense and will usually turn out to be the most expensive part of setting up a business. Small businesses with little capital must rely on a website which generates leads, in the beginning. If necessary, pay extra for a superior designer. The extra expense will repay itself in the long-term.
Once you have a website, you can start making business cards. Your business cards should have your logo, company address, and website on them. Hand these out whenever you can, including to family and friends.
Determine Marketing Strategies
Marketing drains your bank balance quickly. You can’t let up on it or the work will also stop coming in. Determine your marketing strategy for the next six months to a year. Choose online and targeted marketing to make the most out of your available budget.
Successful marketing requires regular input and the ability to change quickly. Monitor each marketing technique and abolish any which aren’t yielding the desired results. Aim to put 10 per cent of your total revenue back into marketing. Over time, an effective marketing campaign pays for itself.
Technology
Since most small businesses rely on the online market, you’ll need certain technology. This could include hardware, like your laptop, and various pieces of industry-specific software. Buy your software second-hand, and always aim for the older versions. Purchasing new software and the latest version often costs more than setting up the rest of the business.
Getting the Money
Ideally, you should raid your savings account. The last thing you want is to get into debt so early. Nonetheless, it’s necessary for some companies to do this. If you’re in this position, there are a number of ways you can get low-cost loans.
Home equity loans and loans from family members and friends serve as a base. If these options aren’t available to you, consider using low interest credit cards. As a warning, never use credit cards for major purchases as the interest is simply too high.
Always avoid high interest loans, such as payday loans. It’s also unwise to take out a loan secured against your home or other asset. Most small businesses fold in the first five years of opening. Consider whether it’s worth really risking everything on the success of your great idea.
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