You have the passion and the drive, but maybe you don’t think you have the money to pursue your dream of starting your own small business. Thankfully, there are many different ways you can start a small business with little or no savings or outside funding. This post goes through some tips on how to start your business as cheaply as possible.
Where Do I Start as a Small Business Owner?
One of the most inexpensive ways you can start a business is by becoming a sole proprietor. Being a sole proprietor means that you and your business are not separate entities, so any debt or costs related to your business are your personal responsibility. Of course, there are other business types as well, depending on whether you have a business partner, the type of taxation you prefer, and growth prospects.
Once you’ve determined what type of business you are going to start, it’s a good idea to hash out your business idea with a business plan (especially if you are planning on presenting your idea to potential investors), and look into a business license if it’s needed for your area.
What Questions Should I ask Myself as a Small Business Owner?
When you’re getting started as a small business owner, you might be concerned with your own personal income and how to differentiate it from your business. In a past post, How Much Should Small Business Owners Pay Themselves, we suggested that taking a minimum salary is probably the best way to start out, and explored some other important questions with regards to balancing your personal and business finances.
Another helpful post for small business owners,3 Legal Questions Every Business Owner Should Ask Themselves, goes through some questions and scenarios for small business owners that you may not have thought of, and how the law may impact your business.
Can I get a Grant or Loan Tailored to Small Business?
There is a plethora of options for funding your small business, so it’s important to go through your options to determine what is right for you and your business. To help you out, here is a short list of federal government resources:
- The US. Small Business Administration‘s website has a Lender Match tool to get you connected with small business-friendly lenders.
- The Small Business Innovation Research program is a highly competitive program that provides opportunities for small business owners to “explore their technological potential”, as well as resources for funding.
- The United States Department of Agriculture Rural Development program provides funding resources for rural businesses.
Be sure to check out any local small business resources that your area may offer as well.
Should I Consider Crowdfunding for My Business?
Crowdfunding through sites such as Kickstarter or Indiegogo is a great way to gauge interest and secure funding directly from customers if you are developing a product that you would like to sell, such as a board game, electronic gadget, or even a film. Since crowdfunding is generally geared more towards bringing these creative endeavors to fruition, you may benefit from doing more research to determine if crowdfunding is appropriate for your business.
Should I Start a Service-Based Business?
A service-based business can be a lucrative option for someone who wants to start a business for as little money as possible, especially if the service being provided doesn’t require an initial investment.
A simple example of a service-based business would be a lawn-mowing business where the customer provides their own lawnmower and gas. The person mowing their lawn could charge less than a professional lawncare company, since the customer would be providing the materials to do the job and the person mowing the lawn would simply be providing the service.
Taking advantage of the service-based business model, such as the example above, can also give you the flexibility you need to invest in your business slowly over time, or save money so that you can invest in achieving a larger goal.
Our Independent Contractor Agreement is available to help you hash out any terms and conditions you might want to include before getting started with your first customer.
Should I use Equipment that I Already Own for My Business?
Starting a business where you can use equipment that you already own will significantly reduce your start-up costs. Using your own equipment means that you might be able to start investing in your business’ future sooner rather than later.
Let’s look at a freelance writer as an example. If the writer already owns a computer, has access to an internet connection, and owns word processing software, they already own most if not all of the tools they need to begin their freelance writing business.
Another example is a computer repair business, which could potentially be run right out of the independent contractor’s home. Upfront costs would just include the tools required to do the repairs.
There are many types of service-based businesses that you can start, and when you’ve established a decent stream of income, you can look into upgrading your equipment or expanding your business. It’s also not unheard of to pivot once your business is off the ground.
What are Some Other Resources I Can Look at for My Small Business?
There are a lot of options and resources available to help you begin your entrepreneurial journey, so you can always benefit from doing your own research. Be sure to take a look at our related posts section as well for more information to help you along.
Do you have any tips for starting a business on a budget? Let us know in the comments!