7 Tips to Start a Small Business with a Limited Budget
There are a lot of things to consider when starting a small business.
One of the most important (and most complicated) aspects of getting off the ground, for example, is learning how to manage your business finances. Start-up costs and company growth can rack up an overwhelming bill, and a lot of new business owners fail to plan for the little things that add up in the end.
Fortunately, with the right tools and a set budget, you can grow your business without spending a fortune.
Look into cost-cutting in unique ways by using online resources, discount business services online, and our list of ways to save money when starting a business with a small budget.
First things first: Create a budget
The last thing you want to do is go into your new venture without setting an absolute amount you will not spend beyond.
From overhead costs like office equipment and salaries, to upfront investments like materials and production, you’ll have a lot of expenses and not much return in the beginning.
Setting a budget for the launch and first growth phase of your company can help you prioritize purchases. Ask yourself, what do you need now and what can wait until the next quarter?
Create a budget around your initial investment amount. Use free tools like budget worksheets and financial templates to get started. Come up with a figure you are comfortable with and begin to itemize the expenses you know will be coming your way.
Don’t forget to budget for potential unexpected costs and consider including a contingency plan in your final budget.
Now that you created a budget, stick to it.
Pro Tip #1: Don’t spend a dime unless you know how it is going to help grow your business!
Use free trials to your advantage
Now that you got the ball rolling on your business, you will likely start receiving sales offers for the latest programs and tools that can help your business grow.
From marketing software and social media management tools to SEO software and email marketing platforms, there are online options to help you manage the many aspects of your budding business. However, don’t get baited the companies’ bells and whistles.
First, check out platforms that offer free trials. Not only will you get the benefits of the program for free for a few weeks, you will also be able to ensure the program is worth the investment before you sign a contract.
Pro Tip #2: Use up all of your free trials on different platforms and programs and keep an Excel document with the program, tools and uses, trial lengths and end dates. This will help you avoid getting charged when the trial expires!
Shop around for the tools that will benefit you the most and compare different options and memberships before committing to anything. Again, ask yourself if the tool is going to help your business grow significantly and if it is necessary right now.
Don’t get stuck on the website
Your company’s website will be a priority for your business, but that doesn’t mean you have to hire a designer and outsource website management to get the full benefits of a well-designed and efficient website.
Use free website building tools like Bookmark, which uses artificial intelligence (AI) technology to give you a high-quality site without the high price tag.
You want your website to offer your customers and visitors something extra. You don’t need to spend thousands of dollars or hire a six-figure salary web developer to have a professional website.
With online tools, you can launch a site for free as soon as you are ready. You can always select plans that match your changing needs as your company grows.
Keep things in-house
Have you considered keeping things in-house? You can interpret “keeping things in-house” in multiple ways. Not only can you retain in-house talent instead of outsourcing to online programs and consultants, but you can also run your business from a home office.
Keeping a home office lets you avoid the financial strain of leasing an office or working in a community space. Choosing to manage projects internally also allows for more control over how your company spends resources.
Take a look at the legal fees
Not sure whether to file for an LLC or start off as a sole proprietorship? Don’t be scared away by the legal jargon. Instead, educate yourself.
Perhaps start off as a sole proprietorship, and as the company grows, you can reexamine incorporating your business.
DIY as much as of the legal process as you can when starting out, but make note of sites like MyCorporation.com that can guide you through incorporation from start to finish when the time comes.
Pro Tip #3: Research the costs of filing an LLC in your state. You can do so for under $100 in most states!
Have a product, invention, or creative element to your business? Make sure to properly trademark, copyright and patent your work. You can file on your own to cut costs, you’ll want to factor filing fees into your budget. Don’t pay high legal fees for something you can do with just a few clicks.
Repurpose and lease equipment
Use the equipment you have as much as you can before dropping money on the newest products. Instead of shopping for new computers, commercial printers, and servers, for example, repurpose what you can and explore cloud computing options to reduce server costs. Don’t buy things until you absolutely must.
Pro Tip #4: Make a list with three categories: Need Now, Need Later, and Down the Road. When you want to make a big purchase, ask yourself if you really need it now, if it can wait until a little later, or if it is something that should be revisited way down the road.
Even when you think you need to buy something, check if you can lease it first. Leasing when you first start out lets you save on the upfront cost of equipment (a fast-to-depreciate investment) until you build up your cash flow.
Depending on your business needs, consider freelancers and virtual assistance before onboarding full-time employees.
You can manage costs for salaries, employee equipment, and insurance by turning to remote, part-time, and contract workers in the beginning.
If you are starting an e-commerce business, always use wholesalers to source material and products. The markups from commercial retailers can wreak havoc on your budget.
Taking the wholesaler route also helps you connect with other business and form professional relationships that can serve you in the future.
Always remember: when setting up a small business, be patient. Growing a business takes time and things will start off small. You don’t have to invest millions right off the bat to get to where you want to go. You can ramp up slowly and, as your company grows, so will your budget.
In the meantime, use these tips to get started at a manageable pace.
About the Author
Magen Sanders is a lifestyle and product writer from Los Angeles. As a Content Strategist for Promocodes.com, she has helped get savings tips and deals to shoppers nationally through her writing and management of creative campaigns.