5 Tips for Starting a Small Business on a Low Budget
Starting a small business is exciting, but it can also be costly. It's easy to get so caught up in the anticipation of your new venture that you lose sight of financial reality. However, if you have a limited budget and are looking for ways to start up without breaking the bank, these tips will help you get your business off on the right foot.
Define your business idea, do your research, and create a business plan.
Narrowing your focus is important, so you don't get overwhelmed when starting up. Set goals for what you'd like to accomplish in the next 2-3 years with your company.
Doing market research on similar businesses will help you understand what strengths and weaknesses may exist with your proposed product or service. It's also important to figure out who is buying from competitors and why they're doing so. As you learn about your market, consider what makes your product or service unique. Consider how it will be delivered and how it can be marketed effectively.
Define who are going to be customers for this type of product/service. How many potential customers are there? What is the size of this market? Once you have a better understanding of your market, consider how you will be different from your competitors. What strengths do you have that they don't? And how can you leverage these differences to build an advantage and win over customers?
It’s not enough just knowing how big an industry can be worth – it’s also important to know how much money each unit in that industry makes before choosing whether or not it makes sense for you. A great way to estimate the size of your market is by using the Rule of Three. This rule states that if you can find three different ways to get paid in one industry, it's likely a good choice for you. For example, if you could create a product or service that helps businesses sell more products, improve their customer service, and make more money with less effort on their part – then there are probably a lot of people out there who would be interested in what you have to offer.
Define your budget and find funding options.
The next step to starting a small business with low funds is to define your budget. You’ll want to set aside enough money for the necessary expenses, such as office space (or software tools if remote), equipment, supplies and marketing materials.
You can find funding options by researching government grants for small businesses or crowdfunding platforms like GoFundMe or Kickstarter, or find credit and payment solutions for small businesses through Fundbox or Futurpreneur. It's also important to consider if you'll need any loans while running your business.
If you have a business partner, it's helpful to draw up an agreement of what each person will be responsible for—this can include splitting the costs and profits.
Talk with other small business owners about how they got their start. They may be able to share valuable advice about how to secure funding to start your small business or give insight into what's worked well for them.
Leverage low-cost or free resources.
Small businesses don't have the same budget as large corporations. But that doesn't mean you can't get started or compete with other companies. In fact, there are many ways to work within your budget and plan ahead for expansion—all it takes is some creativity and research on your part.
One way to save money is by utilizing free online tools and resources that provide a variety of services, including data analysis and advertising. Here are some examples: web analytics (Google Analytics), social media advertising (Facebook Ads), and email marketing automation platforms (Aweber, Mailchimp). In addition to the free tools above, you can also take advantage of free web-based software solutions, such as Google Drive for document storage and sharing, Dropbox for file backup, and Google Docs for word processing.
Another great way to save money as an entrepreneur is by finding equipment-leasing options for small businesses. Leasing allows you to own expensive equipment without paying for it all at once upfront. This option also lets you upgrade your equipment when necessary without having the hassle of selling or buying used office furniture pieces over time!
Consider hiring interns or working with students.
In addition to the financial benefits of hiring interns, there are many other reasons that this is an excellent idea. For one thing, they can help you with administrative tasks such as answering phones and managing calendars. They can also help with research and data analysis if you're starting a business in a highly technical field like software development or engineering. Interns can assist with social media by posting content on Instagram and Twitter, as well as helping out with marketing by designing flyers or ads for your business. Finally, interns may be able to lend their expertise in customer service roles like being on-call for after-hours inquiries about products and services you offer.
If you're looking for someone who has been trained in graphic design or web design skills but doesn't have much experience yet working on projects at scale (as most students do), then an internship might be just what you need! Interns can be a great way to get someone involved with your company who is eager to learn and has the potential to do big things. If you're not sure where to start, there are a lot of helpful resources online for finding people who might be interested in working with you.
University and college learners can be a great source of talent for your business. They need experience in order to land their dream jobs after college and they’re eager to work on projects that interest them while they gain valuable work experience. The Riipen platform gives entrepreneurs and startups access to these learners during their studies and are eager to apply their knowledge or develop their work-ready skills.
Elaine Truesdale, Founder of Association of Natural Hair Care Professionals based in Atlanta, Georgia, is one such small business owner who leveraged internship programs to develop her marketing efforts. Learners were tasked with investigating their competitive landscape, conducting customer surveys and focus groups, evaluating current customer base and making recommendations for further market penetration. "The students we worked with had great marketing insights and made suggestions that our team implemented that have proven to be beneficial", said Elaine. “Thanks to their work we are currently making changes to our social media strategy and member engagement. We are also launching a market penetration strategy targeting Houston, Texas.”
If you're not sure how to find someone who's a good fit for your company, check out our article "The Role of an Intern in a Small Business: How to Find the Right Fit" where you'll discover the secrets to finding the right fit for both the employer and intern.
Find ways to save money on marketing.
The best way to market your business is by getting the word out about it, whether that means advertising or simply telling everyone you know about what you're selling. However, if your budget is limited and you're looking for ways to cut back on marketing costs, there are several things you can do.
Creating a social media page for your new business will not only ensure that people know who you are and what services or products they offer—but it'll also allow them to interact with others who may be interested in purchasing those items as well. Just make sure that the platform(s) you choose aligns well with the type of service/product being offered.
Faculty-supervised in-class projects through the Riipen platform are another cost-saving way for entrepreneurs to collaborate with multiple groups of learners enrolled in various marketing courses, among others, and help them tackle multiple projects simultaneously at no-cost.
"Riipen has been very helpful in us being able to build as a business through the many connections we have with students through various projects," shared Chip Lange, CEO and Founder of Practical POCUS, an ultrasound education company based in Cuba, Missouri. Chip worked with students in a Florida International University Senior Capstone Seminar on a digital advertising and social media campaign project among others.
Now that you've read this article, you should have a better idea of how to start a small business on a small budget. The most important thing is to make sure that whatever business you start is something you're passionate about. And remember: no matter how much money you have available, there are always ways to get things done, so don't let a lack of funds hold you back from following your dreams. With a little bit of creativity and hard work, you can create a profitable business that makes a difference in your life and the lives of others.
Whether you’re a startup, a solopreneur with ambitious plans, or a small business owner with a desire for growth, sign in or create your free Riipen employer account and access student talent from 430+ universities and colleges in Canada, US, UK, and Australia.
Already have a Riipen account? Publish a project!
About the author:
Jennifer Lussier is a bilingual Content Marketing Specialist based in Montreal, QC. With a multidisciplinary background and a desire to accomplish more for the betterment of society, she joined Riipen in 2019 as an Academic Account Manager and has since migrated to the marketing team as it is more closely aligned with her interests and expertise.