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5 Tips For Starting A New Business On A Shoestring Budget

5 Tips For Starting A New Business On A Shoestring Budget

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Starting a new business is difficult, regardless of how much financial backing you have. When you’ve only got a shoestring budget, it’s imperative that you take extra precautions to ensure you don’t bleed yourself dry.

Related: 5 Things You Need To Do Before Opening A New Business

With today’s technology, you don’t have to rent a conventional office space or shop floor. Most businesses nowadays are progressing in a digital direction and relying less and less on “standard conventions.” So, if you don’t think you have the capital to get started, these tips could help.

1. Rent A Serviced Office

In this day and age, traditional office spaces aren’t a necessity. Most leasing agreements are long-term and you’ll have to commit to at least one year. If you’re starting a new business, this is a risk that’s probably not worth taking. Serviced offices are almost same as traditional spaces; however, they provide much greater flexibility in terms of contract length.

At a glance, a serviced office may seem expensive. While their rental fees are often higher, you won’t be tied down for the long haul because contracts are flexible and can range from anywhere between one month and one year. In addition, you’ll be free to change the terms and size of your office as and when you choose.

One of the main things people tend to forget is that traditional office spaces also come with huge overheads and everything from office equipment to line rental must be covered just to get operational. With a serviced office, everything is included and ready-to-use, which can make them far more financially viable for new businesses. For a detailed breakdown on what serviced offices provide, visit the Skyline Offices’ Definitive Guide.

2. Consider Dropshipping

With an increasing number of consumers using the Internet for their online shopping, it hardly seems worth having your own store on the high street. Not only will you have to pay rent and bills for the agreed leasing period, but you’ll also have to think about décor and hiring staff, etc. Dropshipping allows you to run a shop online without any significant overheads.

Dropshipping involves hosting a website and selling products, just like any other online store; however, there’s one difference – you don’t need to purchase stock upfront. With dropshipping you buy your stock as it gets sold, and then the supplier posts it to the buyer. You are essentially the “middle-man” who processes transactions. While dropshipping probably won’t provide a significant markup on products, it can be a great way to get your new business up and running if you don’t have a budget. Some dropshipping companies may also provide a pre-built website with all of their products automatically stored on the system.

3. Use Existing E-commerce Platforms

Plenty of people manage to run entire online stores through existing e-commerce platforms such as eBay and Amazon. Using these platforms allows you to bypass renting a store or hiring a website designer. In addition, they can save you costs on promotion and marketing because they are already established.

One of the downsides to using existing e-commerce platforms is their level of customization. Many people won’t know that they’re even buying from an outside seller, which makes it more difficult to build your brand. However, they can get you on the e-commerce ladder if you already have stock, but are yet to build a website. Many businesses will also use them as an additional income stream. While they won’t provide the same profit margins that you’d get if you sell independently, they can provide sales that would have otherwise gone amiss.

4. Outsource Specific Tasks

Having an employee on the payroll is probably not a good idea if you have tight budget. In addition to salary, you may also have to pay for office equipment, training costs, and recruitment fees, and so on. Outsourcing tasks you can’t do or don’t have the time to do yourself can be more financially viable.

When you outsource you will only pay the contractor for the work they produce. There are no long-term commitments, so if you aren’t happy with their performance or don’t have the money to continue using their services, you can simply stop. Most contractors will also be specialists in their field, which can lead to faster and higher quality results.

5. Use Hosted Software

You don’t always have to buy expensive software. Most software solutions will have a freeware equivalent that could suffice until you have the money to buy something industry standard. For example, instead of investing hundreds of pounds in a Microsoft Office package, you could download OpenOffice for free.

If freeware isn’t an option, look for subscription equivalents. When software is hosted online you may only need to pay a few pounds per month. Best of all, you’ll have access to the most up-to-date versions without having to pay excessive costs. Using software online also means you won’t have to worry about technical errors if you encounter a problem with your computer.

According to BusinessCaseStudies.co.uk, one in three businesses fail within the first three years of trading. One of the main reasons for this is because of poor cash flow management – they borrow too quickly and have interest repayments that they can’t handle. Don’t make the same mistake. There are plenty of successful businesses that started on a shoestring budget; and with a solid business plan and decent management, there’s no reason why you can’t mimic their success.

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Helen Wallis Helen, a new mum to a beautiful little boy of nine months, spends her days as a full-time mum and part-time blogger. Her career up to last year was in business and marketing.