Have you ever thought about starting your own business? Of course you have. Millions of Americans dream of starting their own business, and most of the rest of us have at least considered it. Entrepreneurship is glamorized in this country, since it offers the possibility to accumulate wealth and simultaneously bring value to the world.
Hypothetically, anyone can start a business, but the logistics are restrictive enough to dissuade the bulk of people who make initial attempts to gain momentum. One of the biggest hurdles is securing capital; since the average cost to start a business is $30,000, unless you have a stash of pre-existing capital, it seems like your two best options are to go fishing with venture capitalists and angel investors or abandon ship altogether.
However, there’s a worthwhile third option: you could build a business frugally, limiting your initial startup costs to several hundred rather than several thousand dollars.
Starting With a Feasible Idea
The first step in the process is developing a business idea that can be started frugally. Some businesses, like original bars and restaurants, require massive investments before they can start to make money, but there are a few angles you can take to create something unique that doesn’t require much initial capital:
- Adopt models that already exist. You could get frugal business ideas from the people who have already succeed at them; a quick Google search for cheap business ideas will point you in the right direction. Do your research to find out as many details about those businesses as possible, and consider emulating it—with your own unique twist to stand out as an original.
- Recycle or resell goods. One of the biggest costs for a startup is creating your own goods. Instead of pouring money into that area, consider recycling or reselling goods. For example, you could make art out of scrap material, or simply sell some of the products that a partnering business is currently selling.
- Sell intangible services. You can also forgo many expenses by selling intangible services. Going into business as a consultant, for example, allows you to sell a conversation with your expertise, which requires no formal upfront investment on your part.
Tips for Starting the Business
Once you have an idea in place, you can follow these tips to make your business even more cost-effective:
- Centralize operations on a free website. There are many free or inexpensive website builders available for prospective business owners. Even if you don’t have much design or development expertise, you can easily put together a professional-looking website in a matter of hours. Make this investment, and make that site your center of operations; that should prevent the need for additional platform investments (at least for the time being).
- Work from home when you can. Working from home will save you significant money since you won’t be paying for an ongoing lease or utility bills. You also won’t pay for fuel or spend time commuting. If you need to meet with a client face-to-face, you can always enlist the help of a shared workspace, or meet at a café.
- Minimize unnecessary expenditures. When you’re starting a business, it’s tempting to take on more than you need, hiring additional people, investing in flashy signage, and buying new equipment. Some of these investments may help you, but while you’re getting your bearings, it’s a better idea to avoid unnecessary expenditures. Focus on what you need first, and what you want second.
- Rely on free methods of promotion. Marketing and advertising can be significant expenses, but you might be surprised to learn how easy it is to promote your business for free. Relying on local listing services, taking advantage of social media, and leveraging press releases can help you build initial momentum—and as long as you’re willing to put in the time, almost no monetary investment is necessary.
- Don’t invest too heavily in unknowns. This is the “look before you leap” tip. As a new business owner, you won’t have much information about which marketing strategies are effective, or how your target audience is going to behave. Before you invest too heavily in anything, whether it’s a new product or a new marketing campaign, do your research; this will spare you thousands of dollars in wasted investment.
With these tips and a foundational idea that lends itself to frugal entrepreneurship, it’s entirely possible to start a business of your own for a few thousand dollars or less—which most people can swing with their personal savings and/or a business loan. Do your research thoroughly at every step of the process, and you won’t end up over your head; anybody can become a successful entrepreneur.