The number one rule of starting a business is to have heavy investment right? You need a lot of capital when you are starting up. Otherwise, the business won’t even pick up the pace. Well, that is nothing but a myth. You don’t always need heavy investment or a lot of capital to start a business. This is a wrong idea that often clouds the minds of brilliant entrepreneurs. A lot of time people have come up with great business ideas only to shy away from starting them due to lack of capital. Maybe this is why we don’t have an innovative business in the world anymore.
There is a fear that without enough capital your business will not bloom. Forget blooming, some people even think that their business won’t even start off without enough capital. That’s all in the head. People just need to do things right and they can succeed with low capital. Here are the top eight things that one must do when starting a business with little capital;
8. Start a business with things you know
There is a saying that you tend to do better at things that you know. When starting a business with the little capital it is better and more advisable that you don’t get into something unfamiliar. Sticking to things that you know and that you are good at will play to your advantage. This way you can cut costs on external consultancy and outside assistance. You can base your business on your own expertise. This is a fantastic way to start off your business with less capital and cut cost at the same time.
7. Let Everyone Know
When you are starting a business from the scratch, make sure you let everyone know about it. Tell them what business you are doing. Call up your friends and family members and invite them over for a briefing. This way the news of your business grows among the people. They in return can let their friends and colleagues know about it. This way your networking is growing all without any additional cost. Sometimes you can come across past business contacts who can help you introduce you and your brand to the current clients and professional contacts. This allows you and your business to expand to a larger audience.
6. Cut Off Unnecessary Expenses
Every business will have expenses that you cannot avoid no matter what. Those are somewhat compulsory expenses. However, there are some that you can and should avoid. Remember you are a business built on low capital, so it is of utmost importance that you cut off costs that are not necessary. For instance, you can pay $100 for the flashy visiting card or you could simply pay $10 for a simpler visiting card. These are the kind of expenses that you need to avoid. Being cost effective at first will help you sustain the business in the long run.
5. Be Wary Of Credit Card Bills
Credit cards are nice. You can buy things and pay for them at the swipe of a card. However, when you get the bill at the end of the month, that’s when you start regretting using this plastic. There is a smart way and a suicidal way of using the credit card. Yes, you will have tons of expenses at the start of your business. Buying furniture and fixtures are a necessity that you cannot avoid. But instead of piling up the bill on your credit card and buying them at once, try to pay off using the company’s revenue. This way you can keep track of your expenses and the burden of repaying the credit card company will lessen.
4. Find A Suitable Payment Policy
You are a small business with limited capital. The only way to keep your business running is with the revenue you receive from your customers. For this reason, you need to find a suitable payment policy. You have to make sure your customers will pay on time otherwise you will suffer. Don’t try to base your policy on your customer’s needs. You have to base it on the way your business is run.
3. Develop the Goodwill
There is no point of doing a business if the value of your business does not increase. You need to work around the clock to brand your business. Meet up with the potential clients, provide that personal service, and see things through personally. Only this way you will be able to build a reputation for your business. In other words, your goodwill will increase in value. Remember, you don’t have much capital in your business, so chances are that if you sell off your business in the future then you will get extra amount of money due to the goodwill that you developed.
2. Make Full Use of Free Advertising
You don’t always have to go to great lengths for advertising nor do you have to pay hefty fees for putting on billboards to be seen. We live in an era where social media controls everything. With that same social media, you can advertise all you want. You can even meet potential clients via social media. Another form of marketing is getting the attention of the local media. Get the press or the local news channels and do some public speaking. This way your company is getting free exposure and recognition. By doing a lot of activity via the local press, you can establish yourself as a local company. This is a fine way to build yourself especially given the fact that you are little capital.
1. Work Your Socks Off
Hard work always pays off. But when you are a startup company with little finance to back you up, you need to work harder than ever. You need to make sure everything is done perfectly. Overseeing everything has to be a part of your job description. Handling the clients, balancing the accounts and every other aspect of the business has to be done by you. You will be drained off your every bit of energy but in the long run it will be worth it.
A lot of businesses have started off with huge capital but had to wrap up in a few years. This was because despite having the huge capital they were run poorly. A business with limited capital can survive for years if they just follow the eight things mentioned above.