As the saying goes, you have to spend money to make money. This adage fits perfectly with starting a business since new enterprises often require quite a bit of capital upfront to get off the ground. However, if you don’t have substantial funds, don’t worry. Thanks to the age of technology, it’s never been easier to start a business on a tight budget.
While you’ll still need funds to open a storefront or purchase inventory, you can save in other areas. In fact, we’ve compiled a list of six different ways you can save money when starting a business.
One of the most crucial aspects of starting a company is developing your unique value proposition (UVP). Basically, you have to figure out what your business does that the competition doesn’t. No matter what industry you’re in, you’ll be facing both large and small enterprises. So, you should do some research to figure out what they’re doing right and wrong. From there, you can determine the best way to promote your brand.
Larger companies often pay consultants to do this research, but it’s pretty easy to do yourself. Better yet, researching on your own means you’re more aware of what to do to set your business apart. Here are some low-budget ways to scope out the competition:
- Read Online Reviews – Sites like Google Maps and Yelp are a gold mine for discovering what other companies are doing. When reading reviews, focus on both the good and the bad. Pay attention to elements that customers bring up repeatedly, as that will tell you the business’s main selling points (or negative aspects). Also, see if the brand responds to reviews. One way to promote more reviews from your customers is to show them that you pay attention to what they say.
- Visit Their Website – All modern businesses need a sleek and professional website. However, before you invest money into your site, you should see what other companies do. Look at the top performers in your area and write down the elements you like the most. From there, you can create a list of essential pages and components, along with upgrades and add-ons to include later on.
- Use Their Products or Services – This type of research may require some upfront capital, but it offers a valuable glimpse into your competition. Not only should you pay attention to the products or services themselves, but look at the sales process. How helpful were the sales reps? Did the company follow up with you regularly, or did you have to chase them down? Again, take notes and see what works and what doesn’t.
When funds are tight, you have to ensure that every dollar counts. However, when developing your budgeting process, it’s crucial to understand the difference between an investment and a cost. An investment is when you buy something that will pay dividends. These rewards aren’t necessarily monetary, but they add value to your business. For example, purchasing a high-end POS system makes tracking receipts and sales numbers easier. Because your register is so efficient, you can save time, saving money.
A cost, however, is something that doesn’t yield any tangible benefits. Taxes are an excellent example of a cost because you don’t get anything for paying them. Yes, you stay compliant and avoid an expensive audit, but that’s not an integral part of doing business. By comparison, something like insurance is an investment because you’re protecting your company from financial ruin. Yes, you may never need to file a claim, but it’s better to have a policy and not use it than vice versa.
Here are some other tips for creating a lean budget:
- Don’t Worry About Every Penny – Realistically, you’ll need an accountant to balance your books during tax season. For the rest of the year, your budget is a window into your expenditures. So, instead of focusing on specific dollar figures, look at your expenses as percentages. From there, you can figure out where to allocate funds and where to cut.
- Consider Hidden Costs – Let’s say you can either buy a cheap machine that breaks down every year or an expensive device that lasts ten years. While the cheaper model costs less upfront, you wind up spending ten times more than you would for an expensive model. Looking at the hidden costs can help you make better decisions.
- Create Short and Long-Term Goals – Overall, a budget is more of an aspirational tool than a strict code to follow. If you have a balanced budget, your money yields profitable gains. If your budget is out of whack, you might be wasting funds. Figure out your budgeting goals (i.e., keep labor costs to 25 percent of sales) and plan accordingly.
One cornerstone of a successful business is marketing. If you want to build an audience quickly, you have to promote your brand as often as possible. A logo is the foundation of any branding elements, so you must create this piece first.
Fortunately, you don’t have to spend an arm and a leg to get a new, polished logo. Instead, you can rely on a logo creator programs that use artificial intelligence to generate designs. These tools empower you to develop tons of logos and then just pay for those you like. From there, you can edit and polish your logo until it’s perfect. Here are some core elements of a striking logo:
- Simplicity – Don’t put too much into one logo. Otherwise, it’s hard to read, especially on smaller scales.
- Color Balance – Pay attention to the emotions and connotations of different colors. Also, see how colors can contrast and complement each other.
- Font Selection – The right font can make or break your logo. Make sure it fits with your brand’s aesthetic.
As we mentioned, a website is a must for any modern business. While you can hire professional web developers, building one yourself is often easier and more affordable. Platforms like WordPress and Wix enable you to create pages quickly and efficiently. You can start your business with a simplistic website then hire professional designers once you have decent sales numbers. The essential elements of a successful site include:
- Mission Statement – You don’t necessarily have to write a comprehensive mission statement, but it should be evident on the home page. For example, perhaps you give back to the community or only use high-quality ingredients. Whatever your mission statement, put it front and center.
- Branding – Once you have a new logo, use it wherever possible. While you don’t want to go overboard, it should be easy to tell what your brand is and what your company offers.
- Product Links – As a rule, you should make your site as easy to navigate as possible. The longer a user has to spend to find something, the more likely they’ll try a competitor. Highlight links and buttons and put them in easy-to-find locations.
- Mobile Friendliness – More customers are visiting websites on their smartphones. So, you should use a mobile-friendly design that works well on a smaller screen.
- Catchy Domain – Before you can build a site, you need a domain name. If possible, use your company’s name as your URL or a derivative of it. Make sure the domain is easy to remember, too.
No matter how talented or hard-working you are, you can’t run your business alone. Unfortunately, many owners view employees as a cost instead of an investment. When hiring new staff members, keep these tips in mind:
- Initiative is Often Better Than Skill – Think of it this way; anyone can be trained on how to perform different tasks, even complex ones. However, it’s much harder to train an apathetic worker than one with initiative and motivation.
- Focus on Long-Term Growth – Most people want a job that they can stay in for a long time. So, try not to hire individuals who just want a paycheck. During the interview process, share your mission statement and look for people who share that vision.
- Look for Complementary Traits – Some workers are detail-oriented while others are calm under pressure. If possible, hire employees with traits that work well together. This way, you can build a stronger team.
- Success Starts at the Top – If you’re hiring managers and supervisors, you want them to inspire workers, not coerce them. Look for supervisors that see value in their employees and focus on empowering everyone to do their best.
As we’ve mentioned, marketing is a crucial element for success. Fortunately, you don’t need a massive marketing budget to find and retain an audience. Here are some low-budget tips for building your following organically:
- Search Engine Optimization (SEO) – SEO marketing means you’re producing content for search engines by using the right keywords. However, make sure your material is also easy to read and understand.
- Social Media – It’s free to create accounts on all social platforms. However, focus your attention on the sites that reach your target demographic. For example, middle-aged people use Facebook while the younger generations use TikTok.
- Referral Marketing – Your customers are your best brand ambassadors. Incentivize them to refer friends and family, and you can yield some impressive growth quickly.
- Content Marketing (AKA Inbound Marketing) – In this case, you create content that’s valuable to your target customers. They come for the content and stay for your products or services. Blog posts, video clips, and podcasts are all examples of content marketing.
Building a successful business doesn’t have to cost a fortune. With these low-budget tips, you’re sure to build a strong foundation upon which to build a massive audience.