So many people put off starting a small business because they think they need a healthy injection of capital to do it. That’s simply not true. So, how to start a small business? Simon Paine, co-founder and CEO of the PopUp Business School, said, Bootstrapping is a great way to build a business. According to Paine, So once you’ve ironed out everything you need to get started—permits, licenses, registering your business name, opening a business account, creating a basic website, business cards, etc.—bootstrap what you can and outsource the rest. Here are my eight top tips for starting a self-funded small business.
1. Start with You
If you’re wondering, What would be a good small business to start? You might want to take a closer look at what you have to offer.
What are your skills? What are you most experienced in? What knowledge or insight could you share that someone would pay good money for? Who needs your help?
There is no right or wrong small business, just like there’s no guarantee that some will succeed more than others. I’ve watched startups with incredible products fail because they didn’t know how to market themselves.[1] I’ve also seen pretty average products do exceptionally well simply because the founders knew how to connect with their prospects and deliver a one-of-a-kind experience. Dmytro Okunyev, founder of Chanty, said, So, grab a pen and paper and jot down your skills, your experience, what you really enjoy working on, and who your ideal customer is. Use this as a starting point for figuring out what business you want to be in.
2. Now Talk to Your Potential Clients
Marie Farmer, the founder of Mini MealTimes, said, Conversations lead to conversions. They allow you to get inside your prospects’ heads, to discover what they’re struggling with, and to devise a solution tailored to their needs. So often, as business owners, we think we know our target market. We think we know what they want, where they consume media, what message would drive them to buy your product or service, and we couldn’t be more wrong. I’ve met many entrepreneurs and small business owners who’ve invested thousands of dollars into getting their company off the ground, only to realize six months down the line that it’s all wrong. The business name, their offerings, pricing—all that money and time wasted, simply because they didn’t do their homework. By talking to people, you build relationships and you get valuable feedback. Listen to what they’re saying and how they’re saying it; they’re gift wrapping your content strategy. You already know what they’re googling so you can create a video or article that talks directly to them. This on-the-ground market research will also show you:
Whom you enjoy dealing with. Where they’re based. What their daily routines look like. What their pain points are. If they have an appetite for what you’re selling. What they’re prepared to pay for it.
Then you need to figure out:
Who your competitors are. What they’re doing that you can do better. How you’re going to differentiate yourself.
The experience you deliver is your unique differentiator. Do it right, and not only will you win your first customer, but you’ll give them an experience that will keep them coming back for a lifetime.
3. Leverage Relationships
Networking is a lifesaver for small business owners. Building a circle of people who have experience in starting and growing a company is essential to your success. They can be three or four steps ahead of you, but these are people that you can learn from and bounce ideas off of. They’ve been where you are, and they know what it takes to start a small business. Their experiences won’t all be the same, but that’s a good thing. Richard Michie, CEO of The Marketing Optimist, shared his startup’s story: The benefits of leveraging your entrepreneurial network include:
Finding new leads to pursue. Re-engineering your mindset. Building your confidence and alleviating your fears. Easy access to free advice and support. Help with goal setting and holding yourself accountable.
Take a moment to scroll through your phone contacts and email database. Note whom you can reach out to. These are the people you can leverage to grow your network and find new business opportunities.
4. Make a List of Everything You Need to Get Going
Now that you know what you’re good at, whom you want to work with, what their pain points are, and what you’re going to be selling, you need to make a list. This is a checklist of everything you need to do to start your small business. Yes, you can google it. Or, and this is a better idea, you can reach out to your business network for advice on what to include on this list and whom to contact to assist you in getting things done. I’m talking about lawyers, accountants, creatives, you name it. They’ll have these people on speed dial, and you’ll know they come highly recommended. Once you’ve completed your list, Simon Paine suggests,
5. Be Ruthless with Your Spend
Whether you’re starting your small business as a side hustle or you’re investing your life savings into launching it, you need to be very careful about what you spend your money on.
Keep It Lean
Santiago Navarro, CEO and co-founder of Garçon Wines, advises to keep it lean in the early stage of launching your startup.
Don’t Pull a Salary
Danny Scott, CEO and co-founder of the CoinCorner, suggests not taking a salary. If you don’t need to pull a salary, don’t.
Work from Home
You don’t need a fancy office. Duncan Collins, the founder of RunaGood.com, says, Plus, you can write off a percentage of your costs when tax season rolls around.
Barter Your Services
Do you have any skills, extra time, products, or services you could swap? Maybe you’re a copywriter and you need a designer to create your logo and business cards. Barter your skills for their assistance. You could offer to proofread their content or recommend their services to any clients you get. Maybe you’re opening a coffee shop and you need help with licensing. You could swap unlimited free cappuccinos for their assistance in acquiring and handling the matter. Bartering is a great way to achieve a lot without spending a cent. How can you cut costs? Who can you barter services with? Go back to your list and add this information to it.
6. Think About How You Want to Position Yourself
Don’t be afraid to go after a premium client. In business, profit comes from the way you market yourself and positioning determines how much you earn. It allows you to attract a higher quality customer. I’ll give you an example: If you’re a professional musician and you position yourself as a subway busker, your “customers” will treat you as such and pay you accordingly. You’ll work long, hard hours to earn a small amount of money. Conversely, if you position yourself as a professional concert performer, you’ll attract a very different customer and get paid accordingly. Position yourself as a commodity and you’ll always compete on price.
7. Focus Your Energy Strategically
While business owners wear many hats, at some point, you have to be realistic about where you should be investing your time and energy. In the early days of starting a company, it’s normal to do everything on your own, to work crazy hours, and never get out, but this isn’t healthy for you or your business. A study by Small Business Trends found 78% of small business owners report experiencing burnout in the first two years of running their company.[2] And if you’re too tired, stressed, and sick to work, you’re not going to make any money. That’s why I always tell my clients to master one thing before moving on to the next. That could be one niche, one social media platform, or the first three modules of your online course, whatever. But when you try to do too much, nothing gets done. Just ask Dani Mancini, founder and owner of Scribly.io: Knowing where to focus your energy is so important. Ask yourself, What is critical to my success? What do I need to do now to guarantee growth over the next six months? Once you’ve got this up-and-running then move on to the next project.
8. Outsource Whatever You Don’t Need to Be Doing
This leads me to my final point, outsource whatever you have limited knowledge in or isn’t a good use of your time. Melissa Sinclaire, founder of Big Hair Beauty, said, If you’re clueless about accounting, outsource it. If you know nothing about web development, Google AdWords, Facebook Ads, SEO, SEM, CRMs, or creating your standard operating procedures, outsource it to someone who does. There are countless freelance websites where you can find talented professionals willing to take a fixed price for a fixed outcome. Here’s a guide to help you delegate effectively: How to Delegate Tasks Effectively (Step-By-Step Guide)
The Bottom Line
Some of the most successful small businesses started as bootstrapped businesses at home, from coffee shops, and even college dorms. They launched with a product or service that was good enough. They spent $100 on a website template, a domain name, and an opt-in form. They regularly engaged with their market to uncover where improvements could be made, what worked, and what needed to go. They set goals, called in favors, lived lean, borrowed equipment, bartered services, outsourced where necessary, and reinvested profits back into their companies—this is how you build a small business with little to no money.
More About Entrepreneurship
20 All-Time Best Entrepreneur Books to Make Your Business Successful How to Succeed in Business: 10 Skills Every Entrepreneur Needs How to Start a Small Business That Thrives (From the Ground Up)
Featured photo credit: NeONBRAND via unsplash.com
