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Last Updated on August 10, 2020
It is pretty easy to associate the term “startup” with companies that emerge from Silicon Valley. In reality, we can see that a vast majority of startups don’t need multi-million capital in order to become successful one day. This claim can be supported by the fact that most micro-business don’t require more than $3,000 initial capital.
We are talking about businesses that emerge from home-based owners who don’t have a lot to invest in their business. Moreover, they need to be pretty strict about their finances for the first couple of years. Building a company from scratch is not an easy task. However, there are some rules that you can apply and make this journey much easier than it has to be. Now, we are going to present you with the most important ones.
- See What You Can Get for Free
Coming up with the list of obstacles that stand in your way to create a business with little initial investment is pretty easy. It looks like that making a list of things that are right in front of you, and ready for the taking, is much harder. You need to ask yourself, what are the essential elements for your business, and if some of them available for free? The Internet is full of tools and features you can actually use to your advantage, and better yet, you can use many of them for free.
Do you need an online store where you will place all of your products? Are there any existing websites you can use to sell your products? What kind of marketing you can use for promoting your services or products? Can you design your own marketing material for free? Can you offer your skills or resources in lieu of payment? All of these questions have pretty simple answers. Conduct proper research on all of these topics. , and we assure you, you will find solutions for all the issues.
- The Simple Incorporation
The most important thing that you need to have in mind when are about to build a small business is that you need to be modest and patient. Instead of starting it big, you should form a limited liability corporation, or LLC, for less than $100. It can be done pretty easily through the internet. This approach is highly recommended since it doesn’t require any legal assistance, so you will be able to save some money.
You will be able to avoid both the legal and economic liabilities for your newly formed business for some time. This approach is best seen in the example of the state of Pennsylvania, whose cities are predicted to be the next Silicon Valley, according to the number of LLCs and startups. The question of how to start an LLC in PA is pretty easy to answer since the procedure is pretty straightforward.
- Categorize Your Income Sources
In the process of creating a small business, it is crucial to know how much money your business brings on a monthly level. Also, you need to find out what are the sources of income. It goes without saying that the number of these sources will heavily depend on the business model you’ve implemented. Let’s say you are the owner of a freelance writing business, you will have income from sources like composing freelance projects or selling the course on your website.
In case you have a business that sells pretty specific products or services, you will have only one source of income. That doesn’t necessarily mean that your line of work is wrong. Anyway, you need to collect all of your sources of income in one place and make categorize them. That way, you will have a clear idea about where you collect your money from on a monthly or annual basis.
- The Question of Marketing
It goes without saying that you will not have a massive marketing budget at your disposal. So, this is the right time for you to leverage your professional and personal networks to promote your product or service. This is the situation where you need to use all of your creativity. For example, you can make the most out of social media marketing. Thankfully, marketing tools you can use in social media like LinkedIn, Facebook, Instagram, etc. come at a reasonable price.
Furthermore, you can start a blog on your website. According to a study done by HubSpot, businesses with blogs can generate up to 126% more leads compared to the businesses who don’t have blogs. This is a perfect opportunity for you to attract organic search traffic to your business’s website. Also, you can use e-mail marketing, which is one of the cheapest ways you can promote your business. Collecting all e-mails from your users means that you will be able to provide them with interesting content in the future.
- Can You Afford to Invest?
Investing is an important decision in every business. It’s especially important if you are building your own business on a minimal budget. This is not the case where you can invest a significant amount of money and expect a high return, without considering if you can actually afford to invest at that moment. By having this mindset, you will certainly have much more flexibility and have lower stress levels while you manage your business.
So, if you invest only when you actually have the possibility to do it, you will lower the chance of your business leaping. Ultimately, this means that you will be able to launch your business much faster and without too many obstacles in your way. Giving up on investing doesn’t necessarily mean that you’ve made a wrong move. Who knows, maybe it wasn’t a good moment to invest in the first place.
The Bottom Line
Creating a business from scratch is a real challenge, but that doesn’t mean it’s impossible. At the same time, having too much capital at your disposal doesn’t mean that you will launch a successful company. Starting small has its advantages This way, you will have a better perspective of your business as it grows over time. The habits you’ve learned along the way will be of much help in the future.