For most people, launching and running a successful business represents the pinnacle of professional achievement. There’s nothing quite like taking an idea of yours and transforming it into a fully functional business that not only provides you with a stable income, but that also provides you and your employees with meaningful work.
However, for too many people, starting a business ends up being a dream that never gets realized. First, before you even start your own business, there are a few questions you should ask yourself. There are many reasons for this, but one of the most prominent is that we tend to think of starting a business as an all or nothing expense.
This means we view starting a business as a complete loss of steady income in exchange for the uncertain and expensive undertaking that is entrepreneurship Part of this perspective is grounded in truth. Older studies have found the average cost of starting a business to be slightly over $30,000, and, in reality, more small businesses fail each year than succeed.
But, it really doesn’t need to be this way. Thanks to the internet, and a focus on creating lean, efficient, and highly-profitable businesses, it’s now possible to launch your company for under $1,000. Of course, how you do this and how much you spend will depend a bit on you and your business idea, but here are some tips to help you keep costs down while chasing the dream of being an entrepreneur.
Pick the Right Products
You need to pick the right products and the right niche when starting an (online) business (from home). One of the keys to starting a business on a budget is picking the right products. Picking the right industry when starting a new business will be an essential element to the success or failure of your venture. You don’t want to tackle an industry or niche that is too saturated or having a plan to produce an expensive product if you don’t have any funds or network.
What this really means is picking things that are inexpensive to produce. It might be difficult, for example, to get a tech business going cheaply, such as one that is based around an app. This is because unless you yourself have the skills to create this product, you’re going to have to spend a lot to get your product going, which is going to put you over the $1,000 limit rather quickly.
At Growth Hackers, we’ve guided dozens of entrepreneurs to select the right products and niches, helping them launch businesses on a budget while maximizing profit potential from day one. Some ideas for products that can be created relatively inexpensive are:
• Books.
It’s easier than it’s ever been to self-publish, and if you put the time in, you can create books for relatively little money and market them for decent profits. If you do this, consider eBooks that offer help in some area you know a lot about. Of course, nearly every writer’s dream is to publish fiction, but this is a tough market to break into, so think about how you can be directly useful to people’s lives and then focus on creating this type of content.
• Apparel.
People love gear, and they will always need it. You can buy things in bulk from places like AliBaba or Liquidation.com, and then you can mark them up and sell them for cheap. But if you do this, focus on things you know and love, as this will be much easier to market than something you know nothing about.
• Education.
Similar to books, if there is some skill you have that you think people will benefit learning about, then consider putting some instructional material together and selling it. CDs, DVDs, podcasts and other audio-visual content is always in demand, but consider doing something first that you can give away for free to generate some interest and demand.
These are just a few you could do, but there are many more. However, it may end up being easier to offer a service rather than a good, as this will help you avoid the cost of developing and producing these products. For example, consulting, coaching, writing and design are all things people need and will pay for, and they don’t really require much of an investment, other than the time you spend organizing and presenting yourself as a resource. To give you more ideas, we came up with these 11 businesses you can start up with little capital.
Use Affiliate Marketing
If you aren’t interested in selling any of the above products, or if you don’t think you can offer a competitive service, then you may want to look into affiliate marketing. In a nutshell, this is the process of selling other people’s products. You form a partnership with other businesses and agree to sell what they sell for a small commission.
There are two main advantages to affiliate marketing strategies:
- You don’t need to worry about stocking and shipping. Because you’re selling on behalf of another company, you don’t need to keep anything in stock, helping you reduce inventory costs. And since sales will likely be processed with the company you’re selling for, they will also take care of shipping, which will eliminate the need for you to absorb this success.
- You’re selling already established products. While we may want to think that people will scramble for our products, the reality is that people are far more likely to go for an established product. Affiliate marketing helps you make use of established brands, and then once you build up a following, you can add in your own products without having to worry about sinking your entire savings into the business.
One of the major advantages of affiliate marketing is that there are tons of options out there. Amazon Associates is one of the largest and most profitable affiliate marketing programs out there, but there are also tons more in a wide range of niches, so it should be easy for you to find something that is not only profitable, but that you also enjoy selling.
Before Growth Hackers introduced affiliate strategies, our clients risked high upfront costs and slow launches; after, they could start earning immediately while learning the ropes of selling without inventory or shipping headaches.
Because again, you will likely be far more successful selling something you care about; it will make you seem more authentic, which makes it easier to convince people to buy from you.
To maximize your affiliate marketing efforts, you don’t need to start from scratch. There are many great affiliate marketing software you can choose from.
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Run Things from Your Home
Office space and materials will put you over this $1,000 budget almost instantly, so the best thing you can do to keep expenses down is to run things out of your home. And if you’re running an internet business, this is easy to do, as you won’t need to worry about meeting clients and customers.
One issue you may run into is with an address. People can pretty easily tell the difference between a home and office address, so if you are going to be using mail, then consider getting a mailbox somewhere so that you can come across more professionally.
Unfortunately, if this business is going to be a side hustle, then you won’t be able to declare your home office as a tax deduction. This changed with the new tax bill. But if your home office is going to be your primary place of business, then it’s still possible to claim this deduction, which will also provide you with a nice savings.
Use Free Software and Services
Once you get into the entrepreneurial and eCommerce worlds, you’ll quickly realize there are tons of apps and programs out there claiming they can do wonders for your business. This is great, but most of these cost a pretty penny, so they might not be ideal if you’re trying to keep expenses down.
Whether you want to transition your business to remote work, create websites, manage your accounting, design beautiful graphics, manage your team or create a video, there are lots of free services out there you can use. Don’t discount the power and functionality of Google Drive, Trello and Slack are great ways to organize projects and keep in touch with your team.
Another good one is Google Analytics. This service will provide you with a ton of information about who’s coming to your site, which you can use to target people better and improve sales numbers. You can find many other free software and tools for productivity, marketing, analytics, growth hacking, etc… here.
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Create Your Own Content
Content marketing is going to be one of the drivers of your success. This is because in an age where we’re constantly bombarded with images and other advertisements, content is still relevant. People love looking at an interesting graph or reading a unique take on an important issue.
Doing so not only increases your exposure, but it also establishes you as an authority in your niche, which will be a big factor in people’s decisions once they get ready to make a purchase. Remember, people are far more likely to buy from a known entity over an unknown one.
As you move along with your business, you may want to outsource some of this to save you time and give you the chance to focus on other aspects of your business. But in the beginning, do this yourself. It will save you a ton of money, but perhaps more importantly, it will give you some good insight into the content creation process. You’ll be able to experiment with different things to see what works and what doesn’t, and this will help you produce better content.
Develop Entrepreneurial Habits
Lastly, keeping expenses down is going to require you to be efficient. This means reducing waste wherever you can. But since you’re running this business by yourself, this also means developing some habits that will put you in a position of success. Good habits include:
• Prioritize income-producing activities.
Wasting hours and hours on things that don’t produce any returns is going to cause expenses to skyrocket, so make sure you’re dedicating the majority of your bandwidth to that which will actually bring in some revenue.
• Automate where you can.
Even just little things such as setting up your spreadsheets with macros and formulas can save you a bunch of time and keep expenses down. Other things to automate include social media posting, as well as emails. It’s true that some of these services cost money, but you can usually find some cheap or free options to help streamline things.
• Delegate the rest.
Delegating is essential to business growth and success. Whatever you can’t automate, delegate. And if you don’t have anyone to delegate to, then try to find a way to delete it from your task lists. Part of keeping your business lean is recognizing time as one of your most valuable resources, so start doing everything you can to maximize the amount of time you spend on the activities that are going to promote the growth of your business.
• Be patient.
Starting a business on a small budget means things are going to take longer. You don’t have, or choose not to spend, the money needed to launch a huge marketing campaign, or to roll out a lucrative referral program, so you need to be honest with yourself about how long things are going to take. You may not be able to quit your current job right now, but with patience and diligence, you may be able to in the not-so-distant future.
If you want to know more about what an entrepreneur needs to be successful, I recommend you to read these 2 articles:
– The anatomy of an entrepreneur
– Do you have entrepreneurial DNA?
Launch Your Own Business Today for Under $1,000
If you’re planning to start a business, know that there many things you should be prepared for. Now that you know you don’t need to invest your life’s savings into a business, the question is: what are you waiting for? If things don’t work out, then you can take solace in the fact that you didn’t lose much.
But if you follow the tips outlined here, then you’ll be in good shape for launching a business that not only doesn’t break the bank but that helps you expand your income and enjoy all the benefits and rewards of entrepreneurship.
Growth Hackers is most likely one of the best digital transformation agencieshelping entrepreneurs and businesses succeed. Indeed, we help startups, entrepreneurs, business owners and established brands with digital marketing (Content marketing, SEO, social media marketing, email campaigns, etc…) and growth hacking (Conversion rate optimization, data analysis, product improvements…).
1 Comment
These are really solid tips for anyone looking to start a new business- not an easy venture by any measure. Free software can be really useful for a single employee, but once you’re adding a team, you’ll likely end up with unconnected apps. That’s free, in terms of price, but the time and confusion of managing information in multiple places is a cost, too. There are actually all-in-one business software suites out there that cost way less than you’d think- and can still keep the budget under $1,000.