They said the sky is the limit but the moon and stars are a thing. Starting a business with very little capital is very challenging, but it can be done. Entrepreneurs are often restless and it’s always tempting to “get going” with a business idea even when you don’t have everything you need.
1. Start with a LLC
When you incorporate your company, a step that is very important, then it is best to go with an LLC. Usually, depending on the state, this will cost less than $100, and you don’t even have to have legal assistance to get going. For a shoestring budget, this is the best option because jumping into a C-corporation gets pricey.
2. Create a Free Business Plan
Creating a business plan is one of the most important steps you will take because the plan serves as your road map for the early years of your business. The business plan generally projects 3-5 years ahead and outlines the route a company intends to take to reach its yearly milestones, including revenue projections. A well thought out plan also helps you to step-back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis.
3. Take advantage of social media and free websites for marketing
There’s no reason why you have to spend that much money for marketing when you have social media like Facebook and Twitter at your disposal. Instead of spending a great deal of your funds to market your business, use the power of the web to its fullest advantage.
4. Work out of your spare room, and keep your own records.
A shoestring budget means that you don’t have the funds to jump right into an office or store. Getting a place like that started costs big bucks and you can expect to spend thousands of dollars before you can even open the doors. Stick with a home based business for a while if you can.
5. Your Business Is Not Your Personal Piggy Bank
Be prepared to take little or no salary for the first year of your business, even while paying employees. For the first few years of your business, you may be the lowest paid employee. Get your personal expenses down to as close to zero as you can.
If you follow these five rules, then you really can start a business on a shoestring budget just as I did.