It’s a common myth that you need thousands upon thousands of dollars to start a business. That’s not true. You can get started on a shoestring budget, and when that happens you’re in a better position to reach profitability in the near future.
Here are five things you can do to start a business without a lot of money:
1. Review your finances
A thorough financial review is a good jumping off point. It’s during this time you answer questions such as: how much money do you have available for starting a business? How much do you need to borrow or raise? Are your personal finances in good order?
2. Choose the right business
Some businesses cost more to start than others. If you’re on a tight budget, choose a business that doesn’t cost an arm and a leg. You may be surprised to find that some businesses — such as content writing and web design — can be started with $100 or less. How’s that for a shoestring budget?
3. Create a business plan
Use your business plan to better understand the types of expenses you’ll face as you grow. This can include everything from equipment to payroll to inventory. If you don’t know how much cash you’ll need in the short and long-term, you could soon find yourself running low — and that’s not a position you want to be in.
4. Consider your funding options
If you don’t have enough cash on hand, make a list of funding options. This can include but is not limited to bank loans, credit cards, friends and family, and angel investors.
Some of these funding options will suit you better than others so keep an open mind.
5. Keep an eye on the future
Starting a business is the beginning of your journey, but it’s your hope that your company lasts well into the future. You need cash flow for that to happen. Think about what the future will bring in regards to how much money you’ll need to keep your doors open. When you plan appropriately upfront, there’s less chance of running into financial challenges in the future.
The phrase “shoestring budget” means something different to everyone, so make sure you define this as soon as possible. Doing so will give you a better idea of what comes next.
Just remember that you don’t need thousands of dollars to realize your dream of starting a business. A little bit of money can go a long way!