Starting your own business without significant capital behind you can be a daunting prospect, but it’s not impossible. You can still get your business off the ground using your know-how, some strategy and, of course, your passion for your craft.
Starting a business with little capital except your own know-how
Naturally you aren’t setting up a new business in a field you know nothing about. Build your new enterprise around your personal experience and skills and don’t be side-tracked into taking on peripherals. At its simplest, concentrate on something you know you can do, whether it’s house-painting, gardening or drawing caricatures. As you consider logistics and budget, or as you write your business plan, maintain the focus on designing a truly lean operation geared towards the single service or product that most fits your expertise. Once you’re more established, you will be able to take things to the next stage.
Use grass-roots marketing to test your product or service idea
Focus your marketing on a build-up of existing contacts: family, friends, colleagues, and use your social networks for all they’re worth. A couple of posts a day take energy but no upfront spend! Use the early days to test your product and consumer interest. How do potential customers see your idea? Conduct interviews and/or use some free survey tools – you can learn a lot that’s worth its weight in gold as you develop your business direction. Inviting comment can reap rewards in terms of understanding people’s perceptions, as well as gaining an occasional bright idea.
Make frugality a habit to start your low-capital business
It sounds obvious, but sometimes a pre-conceived notion, like the need for state-of-the-art supplies or fancy business cards can be hard to shake off. Apply a ruthless evaluation of what’s really essential, and save the investment in other people’s businesses until yours can afford it. Part of the hard-line approach is to avoid credit card build-up that can ambush you with interest payments at the worst possible time. Utilise the plentiful free resources out there. You don’t need an expensive satnav system, unless it’s included in your van, when there are plenty of freely available mapping resources. Make use of the many free software options to help you plan, budget and market your activity. Anything beyond the real bottom-line basics should be viewed with beady-eyed suspicion. If your low-capital enterprise is a one-man-or-woman-band, all you need to get started is a worktop, computer, phone and, depending on the nature of the enterprise, a van.
The right van for starting a business with little capital
In your circumstances, consider deals like Renault’s Contract Hire. Under this scheme, you pay a 3- to 12-months advance rental and then a fixed monthly amount for the duration. Road fund licence is included, and there is an option to include servicing, maintenance and tyres. Another possibility is Renault Finance Lease: you decide on the initial deposit, and the low monthly payments are offset by a “balloon” payment at the end. Provided you feel confident of a cash build-up over the period, this can be a good choice. Similarly, Lease Purchase has the option of low monthly payments offset by a final “balloon” payment. All of these are worth considering.
Money is not the only capital: you are another!
Your entrepreneurial spirit, time and energy are all “free”, so to speak, and these represent the capital you have available to invest in your new business. This essential input probably includes tasks like cleaning the van, filing and book-keeping; you may not be the best at them, but since you are the available resource, make use of it. And of course, valuable as your input is, you should pay yourself the bare minimum in the crucial start-up phase. When it comes to finding help, recruiting and retaining a team with the skills you need, in the absence of a suitable payroll, could be a matter of trading other resources. Bartering and exchanging services are possible avenues, but so are future options or profit-shares – whatever it takes, since cash is all that you’re lacking.
Future-proofing for success
Prepare for future investment into your company: keep your eye on the fundability of your business when the time comes, whether through a crowdfunding exercise or more traditional routes. Be meticulous with accounting, records, evidence of successes both major and minor, customer feedback and responses – anything that helps to build the picture of a strong and resilient organisation when you judge the time is right. Even when starting a business with little capital, prepare for success!