Starting A Business On A Budget
The good news is that you still can run your business even if you are strapped for cash. You'll have to be resourceful though. Lazy people need not apply.
Once you've got a great business idea, do your feasibility study. Plan ahead. How much would you need for this business. How much might you expect it to earn? What is the long term potential of the business? Do you plan to run this biz for life and hand it down to your heirs or do you want to grow this business and sell it off?
If you want to sell it off, you could search for venture capitalists who are willing to fund your idea in exchange for a share of your company. When you do sell it off, they get their cut and their profits from the venture. Bear in mind there is no such thing as free money. They fund your venture and they would want to make some of the decisions. You'll have to comply with their wishes or at least work out some compromise both parties can live with.
Alternatively, whether you want to sell or keep your business, if your savings can cover the business costs and have enough for you to live on for the next twelve months then you can fund it yourself from your savings and keep full control of your business. Or you could borrow from family and friends but make sure you return the borrowed cash.
If you can't muster up enough funds or you'd rather save that money for emergencies, you could take a bank loan. Remember that banks charge interest for their loans. You'd have to pay back the principal sum you borrow with interest. Though the interest rate might sound managable, the interest you have to pay can accumulate to a frightening sum time,
A better bet is to try and get a grant. You can get grants for business development which can mean the difference between a successful business or giving up before the business takes off due to the lack of funds. Grants can even tide you through tough times.
On the other side of the equation would be the cost cutting measures. Try not to pay for anything if an alternative is available for free. In my web business, I went for the free operating system Linux and the free database Mysql and saved tremendously on software costs. Instead of microsoft office, I went for open office which you can download for free online, or you could buy staroffice from computer stores for a fraction of what you might pay for microsoft office. Sure, free versions may not have as many versions as the costly, more popular software, but do you really need all those bells and whistles? Wouldn't the money be better spent on other business essentials?
Do you really need an impressive office in a prestigious district? Is that really necessary? You could save substantially if you work from a home office or relocate your office to a place where the rental isn't so high.
How much do you spend on the printing of your materials? Business cards, mailers for marketing your business can be rather expensive. You shouldn't compromise on the quality as these materials represent your company image. Here's where I got Free Marketing Materials which are beautifully printed on quality paper.
Related Tags: small business, starting a business, business startup, business start up, business tips
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