Friday, 11 December 2009

10 ways to... start a business on a budget

10 ways to... start a business on a budget

Every penny counts when establishing a new business so making sure you don't blow your budget on expensive marketing campaigns or pricey business cards is crucial. This article outlines 10 top tips for starting up on a shoestring.

1. Do business from the garden shed
Doug and Mary Perkins, founders of Specsavers, and Steve and Julie Pankhurst, who set up Friends Reunited, are some of the UK's successful entrepreneurs who started their business at home. Renting or buying premises is one of the biggest costs faced by company owners so working from home helps to keep expenses down in the early days. Make sure that home and business life is kept separate. Dedicate a specific area as your work space and try and establish a daily structure. Many entrepreneurs run their business from a garden shed or summer house which are perfect places for creating a divide between your personal and business life.

2. Be a cheapskate
Everyone wants to have the latest PC or comfiest chair in their office but is it really necessary? You need all the money you can get when starting a business so why waste it on the latest gadget when one which costs a tenth of the price will suffice? Computers and other IT equipment can be got hold of pretty cheaply these days as can furniture. Keep an eye out for retail sales and scan internet comparison websites such as Price Grabber, Price Runner and Kelkoo for bargains.
Even better than cheap is free so ask your family and friends if they've anything going spare or check out services like Freecycle for useful items people are trying to get rid of.
The same principles apply to items like stationery. Those expensive, groovy business cards may look good but will they be anymore effective than simpler cards which cost half the price?

3. Get yourself listed
Online directories can be a great way to promote your business and many to allow you to list your business for free. Among the several on offer are Craigslist, Free Index and UK Small Business Directory. Services such as UK Business Forums also include directories in which you can get a listing.

Getting editorial coverage in the press is one of the most cost effective ways of promoting a business but taking on the services of professionals can be beyond the budget for many start-ups. However, it is possible to do your own PR. Think about why you're different or latch onto a topical story and put together a press release. Track down the names and email addresses of journalists writing about your sector and target them. Work on building up a good relationship with particular writers or broadcasters by offering to comment on issues relevant to your business. It may take time but it's a great way to build a profile and market your business for little or no financial cost.

5. Friends and family
Getting help in the early days of running a business can be a godsend. While you may not have the cash to pay someone, ask your friends and family for assistance. You'll likely find that most will be more than happy to give you a helping hand. You could even extend the search to local schools, colleges or universities for young people looking for some work experience.

6. Advertising on the cheap
As well as the directory websites listed above, there are other cost effective ways to advertise. Get some leaflets printed and pound the streets delivering them. You could also check whether local supermarkets, libraries and other similar sites will allow you to post an ad on their walls. Parish magazines and community newsletters are other cheap way of getting your name out there. You may be targeting a national or even international market but don't ignore the potential customers on your doorstep. Once they know about your business, they will start talking it and telling the people they know.

7. Shared space
For some business owners, external premises outside of home may be necessary but rather than investing in your own expensive space, ask other entrepreneurs if you can share theirs. If you're providing a product or service which could complement that offered by an existing business, speak to the owner to see whether he or she would be willing for you to occupy an area in their office or shop in return for a small fee or a share of your sales. Another option is to check out business incubators and hubs specifically created for young businesses.

8. Network like crazy
Networking events have increased in popularity over recent years which gives you hundreds of opportunities to meet other business owners who you could work with or would be interested in buying your product or services. Membership of organisations like the Federation of Small Businesses gives you access to such events but there other lots of other opportunities to make contacts.
While there are lots of networking events available, to make the most out of them you need to do more than just turn up. Make sure you take along plenty of business cards and identify your goals beforehand. You should also take the initiative to approach others and start conversations but also make sure you always listen to what others are telling you.

9. Small business 2.0
The popularity of so-called Web 2.0 services like forums and social networks have given business owners more opportunities than ever to promote their services. Networks like UK Business Forums allow entrepreneurs to interact and exchange ideas with other business owners, while sites such as Facebook and Twitter allow you to target potential customers. The key to them all though, is building trust and developing relationships rather than blatantly promoting your business.

10. Be a blogger
Blogging is another cheap way of getting your name out there. It is also an easy way of keeping your website content fresh and interesting. Write regularly on issues relevant to your business and build up a regular following. You could also comment on other people's blogs but don't go overboard and become a spammer!


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