Without Going Broke
A recent Goldman Sachs survey found that the number of new business startups has risen sharply during the last three months. Additionally, despite the dramatic impact COVID-19 has had on the small business community, the number of American entrepreneurs did not decline from what it was before the pandemic.
It’s a chaotic time, and the economic future is uncertain, but there are opportunities. And you can grab one.
So, what’s holding you back? Money?
It helps to have a financial cushion, but there are ways to startup your business with little money and without going broke.
Here are four tips to get you started.
Keep your tax obligation as low as possible.
Before launching your business, consult with a qualified tax accountant or attorney to understand the ramifications of taxes on the type of company you set up. Many entrepreneurs skip this critical step because the paperwork involved in opening a business is easy to navigate.
Sole proprietorships, S corporations, limited liability companies, and partnerships come with different tax obligations.
Select a tax year that works in your favor. Be sure you understand the types of business taxes you’ll need to pay depending on your legal structure: estimated taxes, employment taxes, self-employment taxes, and municipal taxes.
Structure your company to have more money in your cash flow and less going to the IRS.
Startup your business in a niche that doesn’t require a large space or production equipment.
If you launch your business in the service industry, you’ll save money on overhead. The landscape of startups is covered with failed businesses that went broke because the cash flow was not sufficient to cover operating expenses.
Service industry startups are on fire right now. By maintaining low overhead, you can stockpile revenues to help you scale up when the time is right. Consider these service industry niches:
- app development
- translation services
- content creation
- social media management
Research the market.
If you’re going to duplicate something that’s already out there, be sure you have a convincing argument of why your product or service is better.
Check out the competition.
- What are they doing, how and where?
- Where is the lack?
- What can you do that the competition can’t?
If you’re starting something new, why does the world need it?
If you have a good business idea and have done your research, you’ll succeed even if you don’t have a lot of money in the bank. You’ll attract investors, build up your working capital, and before long, your startup will be ready to go global.
Be prepared for setbacks.
It can take time to build a client base. If you’re developing a product, there can be manufacturing delays, bugs in the system, disputes with suppliers, delivery problems, and so forth. You need enough cash to get you through these bumpy periods. Be flexible and let each setback serve as a guide to help your business grow and succeed.
Do your own marketing and focus on the essentials.
Everyone will tell you that you need a website, but when you don’t have a lot of money, it’s important to focus on the priorities—selling your product or service. It’s not necessary to hire a webmaster or expend limited resources for website hosting. Platforms like WordPress offer thousands of website themes that you can easily adapt to your business model. A small investment in the domain name and SEO apps is all you need to get started.
Create a Facebook Company page and interact with relevant groups. You might want to invest in one other social media platform such as LinkedIn, Twitter, or Instagram, depending on your business vertical.
There are lots of free platforms out there for you to use, in addition to Google and Facebook. Open a blog on Medium and establish yourself as a thought leader in your industry.
You can successfully start up your business without going broke by concentrating on the essentials and minimizing overhead. Focus on delivering an excellent product or service. Build brand loyalty. Once you have a healthy cash flow, you can scale up and add components to take you to the next level.