Want to start a business but don’t have much money and reluctant to take out a loan? Here’s some expert advice from BRAVE.
Startup costs depend on the business idea – some startups cost next to nothing, others cost thousands of pounds.
First work out what you can afford to invest. Can you think of an idea you’re skilled enough to do, where the cost of starting it fits within your budget? If you don’t have enough cash, you may be able to secure a grant, investment or crowdfunding as alternatives to lending.
BRAVE’s Starting in Business workshop on July 18th in Bristol will cover some of the options available.
Regardless of this, review your start up costs carefully. The less you spend, the less sales you have to make to breakeven. Check you are only spending on what you truly need.
The most expensive costs are typically wages and premises. If you can find a business idea you can start without employees, and where you can run it from home, this will reduce costs.
If working from home, ensure you have a dedicated workspace and double check that the landlord, buildings insurer or mortgage company do not object. An alternative method of keeping costs down is to share premises with a more established business.
Be resourceful when sourcing items – in many cases you don’t need new goods to start up. You can sometimes find what you need in charity shops, newspaper classifieds, or on Gumtree or Ebay.
Price however is not everything, and the cheapest possible items may not be good value or may give the wrong impression to customers, so be judicious in where you cut corners.
Do ask for help from others– sometimes people can be generous about donating time and equipment. For example, some firms give away equipment and furniture when they upgrade their own. But be careful about relying on borrowed items– if the lender suddenly asks for the item back, or you break it by accident, then there can be difficulties.
Consider the timings of any purchases – it can help your cashflow if you pay for things on a monthly rather than annual basis, or lease vehicles rather than buying them outright.
Finally, think about how you can keep marketing costs down. Do you really need an expensive fancy website at the start? Or will you be able to make sufficient sales through low cost advertising, such as word of mouth and audience-building on social media?
Following these principles should help you “bootstrap” a startup without external financial help.
BRAVE’s Starting in Business workshop in Bristol on July 18th is aimed at those who have thoroughly researched their business idea and are ready to launch. To book your place click on the workshop link below or call 0117 944 5330.