How long have you been itching to start a small business? What’s holding you back?
So many people put off starting a small business because they think they need a healthy injection of capital to do it.
That’s simply not true.
So, how to start a small business?
Simon Paine, co-founder and CEO of the PopUp Business School, said,
“You can easily start a business with no money. When you’re starting, good enough is good enough. It doesn’t have to be perfect. Perfection will kill your business before you start because it costs money, and you don’t need to spend money to get going.”
Bootstrapping is a great way to build a business.
According to Paine,
“The bootstrapped business is the one most likely to survive. Why? Because you’ve built your entrepreneurial muscle by figuring out how to start for free, and you’ve engaged yourself in your own business. This process is critical, so don’t skip it.”
So once you’ve ironed out everything you need to get started—permits, licenses, registering your business name, opening a business account, creating a basic website, business cards, etc.—bootstrap what you can and outsource the rest.
Here are my eight top tips for starting a self-funded small business.
1. Start with You
If you’re wondering, What would be a good small business to start? You might want to take a closer look at what you have to offer.
- What are your skills?
- What are you most experienced in?
- What knowledge or insight could you share that someone would pay good money for?
- Who needs your help?
There is no right or wrong small business, just like there’s no guarantee that some will succeed more than others. I’ve watched startups with incredible products fail because they didn’t know how to market themselves.
I’ve also seen pretty average products do exceptionally well simply because the founders knew how to connect with their prospects and deliver a one-of-a-kind experience.
Dmytro Okunyev, founder of Chanty, said,
“The best way to start a small business with a small budget is to start with a problem that somebody else is having and solve it, rather than coming up with something new. That way, you already have your target audience right in front of you, and you can make your first sale immediately instead of spending a fortune on marketing.”
So, grab a pen and paper and jot down your skills, your experience, what you really enjoy working on, and who your ideal customer is. Use this as a starting point for figuring out what business you want to be in.
2. Now Talk to Your Potential Clients
Marie Farmer, the founder of Mini MealTimes, said,
“Talk talk talk to your potential customers. Do not spend a penny before you do this.”
Conversations lead to conversions. They allow you to get inside your prospects’ heads, to discover what they’re struggling with, and to devise a solution tailored to their needs.
So often, as business owners, we think we know our target market. We think we know what they want, where they consume media, what message would drive them to buy your product or service, and we couldn’t be more wrong.
I’ve met many entrepreneurs and small business owners who’ve invested thousands of dollars into getting their company off the ground, only to realize six months down the line that it’s all wrong. The business name, their offerings, pricing—all that money and time wasted, simply because they didn’t do their homework.
By talking to people, you build relationships and you get valuable feedback. Listen to what they’re saying and how they’re saying it; they’re gift wrapping your content strategy. You already know what they’re googling so you can create a video or article that talks directly to them.
This on-the-ground market research will also show you:
- Whom you enjoy dealing with.
- Where they’re based.
- What their daily routines look like.
- What their pain points are.
- If they have an appetite for what you’re selling.
- What they’re prepared to pay for it.
Then you need to figure out:
- Who your competitors are.
- What they’re doing that you can do better.
- How you’re going to differentiate yourself.
The experience you deliver is your unique differentiator. Do it right, and not only will you win your first customer, but you’ll give them an experience that will keep them coming back for a lifetime.
3. Leverage Relationships
Networking is a lifesaver for small business owners. Building a circle of people who have experience in starting and growing a company is essential to your success.
They can be three or four steps ahead of you, but these are people that you can learn from and bounce ideas off of. They’ve been where you are, and they know what it takes to start a small business. Their experiences won’t all be the same, but that’s a good thing.
Richard Michie, CEO of The Marketing Optimist, shared his startup’s story:
“When I began, I sat at home and tried to learn how to run a business. It didn’t work, so I joined the Entrepreneurial Spark and then the NatWest Business Accelerator. Here, I was able to share my triumphs and disasters with others who were facing the same struggles. By sharing and listening, I became more resilient to the ups and downs of running a startup. Plus, I was able to build an even bigger network of valuable connections, which helped grow the business massively.”
The benefits of leveraging your entrepreneurial network include:
- Finding new leads to pursue.
- Re-engineering your mindset.
- Building your confidence and alleviating your fears.
- Easy access to free advice and support.
- Help with goal setting and holding yourself accountable.
Take a moment to scroll through your phone contacts and email database. Note whom you can reach out to. These are the people you can leverage to grow your network and find new business opportunities.
4. Make a List of Everything You Need to Get Going
Now that you know what you’re good at, whom you want to work with, what their pain points are, and what you’re going to be selling, you need to make a list.
This is a checklist of everything you need to do to start your small business. Yes, you can google it. Or, and this is a better idea, you can reach out to your business network for advice on what to include on this list and whom to contact to assist you in getting things done.
I’m talking about lawyers, accountants, creatives, you name it. They’ll have these people on speed dial, and you’ll know they come highly recommended.
Once you’ve completed your list, Simon Paine suggests,
“Go through your list of what you need to start your business and see what you can get for free, borrow, barter for, sell something to get cash for, or sell your value before you create it. You absolutely can start a business with no money by following these principles.”
5. Be Ruthless with Your Spend
Whether you’re starting your small business as a side hustle or you’re investing your life savings into launching it, you need to be very careful about what you spend your money on.
Keep It Lean
Santiago Navarro, CEO and co-founder of Garçon Wines, advises to keep it lean in the early stage of launching your startup.
“Spend as little as possible, work hard, and focus on the main goal of developing a quality MVP (minimum viable product) to take to market for testing or selling.”
Don’t Pull a Salary
Danny Scott, CEO and co-founder of the CoinCorner, suggests not taking a salary.
“Throughout the first six months of our business, the founders took no salaries to help give the business the best chance to get off the ground and gain traction.”
If you don’t need to pull a salary, don’t.
Work from Home
You don’t need a fancy office. Duncan Collins, the founder of RunaGood.com, says,
“Work from a house. There are no business rates to pay and no rental or service charge.”
Plus, you can write off a percentage of your costs when tax season rolls around.
Barter Your Services
Do you have any skills, extra time, products, or services you could swap? Maybe you’re a copywriter and you need a designer to create your logo and business cards.
Barter your skills for their assistance. You could offer to proofread their content or recommend their services to any clients you get.
Maybe you’re opening a coffee shop and you need help with licensing. You could swap unlimited free cappuccinos for their assistance in acquiring and handling the matter. Bartering is a great way to achieve a lot without spending a cent.
How can you cut costs? Who can you barter services with? Go back to your list and add this information to it.
6. Think About How You Want to Position Yourself
Don’t be afraid to go after a premium client. In business, profit comes from the way you market yourself and positioning determines how much you earn. It allows you to attract a higher quality customer.
I’ll give you an example:
If you’re a professional musician and you position yourself as a subway busker, your “customers” will treat you as such and pay you accordingly. You’ll work long, hard hours to earn a small amount of money.
Conversely, if you position yourself as a professional concert performer, you’ll attract a very different customer and get paid accordingly.
Position yourself as a commodity and you’ll always compete on price.
7. Focus Your Energy Strategically
While business owners wear many hats, at some point, you have to be realistic about where you should be investing your time and energy. In the early days of starting a company, it’s normal to do everything on your own, to work crazy hours, and never get out, but this isn’t healthy for you or your business.
A study by Small Business Trends found 78% of small business owners report experiencing burnout in the first two years of running their company. And if you’re too tired, stressed, and sick to work, you’re not going to make any money.
That’s why I always tell my clients to master one thing before moving on to the next. That could be one niche, one social media platform, or the first three modules of your online course, whatever.
But when you try to do too much, nothing gets done. Just ask Dani Mancini, founder and owner of Scribly.io:
“It wasn’t until I took stock of just how much I was trying to do that I realized I was setting myself up to fail. Rather than trying to do everything at once, I now focus on one thing at a time and commit to doing it well. That’s meant making difficult decisions like stopping our content strategy entirely until I’ve nailed other high-priority activities like prospecting and referrals (which have by far been more effective tactics).”
Knowing where to focus your energy is so important. Ask yourself,
What is critical to my success? What do I need to do now to guarantee growth over the next six months?
Once you’ve got this up-and-running then move on to the next project.
8. Outsource Whatever You Don’t Need to Be Doing
This leads me to my final point, outsource whatever you have limited knowledge in or isn’t a good use of your time.
Melissa Sinclaire, founder of Big Hair Beauty, said,
“Sometimes you may feel that your business can’t afford it and you’ll just do it all yourself, but most of the time you can’t afford not to.”
If you’re clueless about accounting, outsource it. If you know nothing about web development, Google AdWords, Facebook Ads, SEO, SEM, CRMs, or creating your standard operating procedures, outsource it to someone who does.
There are countless freelance websites where you can find talented professionals willing to take a fixed price for a fixed outcome.
Here’s a guide to help you delegate effectively: How to Delegate Tasks Effectively (Step-By-Step Guide)
The Bottom Line
Some of the most successful small businesses started as bootstrapped businesses at home, from coffee shops, and even college dorms.
They launched with a product or service that was good enough. They spent $100 on a website template, a domain name, and an opt-in form.
They regularly engaged with their market to uncover where improvements could be made, what worked, and what needed to go.
They set goals, called in favors, lived lean, borrowed equipment, bartered services, outsourced where necessary, and reinvested profits back into their companies—this is how you build a small business with little to no money.
More About Entrepreneurship
- 20 All-Time Best Entrepreneur Books to Make Your Business Successful
- How to Succeed in Business: 10 Skills Every Entrepreneur Needs
- How to Start a Small Business That Thrives (From the Ground Up)
Featured photo credit: NeONBRAND via unsplash.com