Starting a business can come with a lot of upfront costs including equipment, licensing, marketing and potentially even hiring employees. These costs can stop many budding entrepreneurs from chasing their startup dreams. Fortunately, there are lots of different funding options out there and strategies for starting a business on a shoestring. Here are just a few different ways to start business when you’re low on cash.
You may not be able to afford those startup costs now, but with some saving up you could do. This does involve having another job in the meantime so that you can gather the funds. If you’re a recent graduate who was planning on starting a business once you left college, you could try looking into business and commerce graduate jobs – not only could these provide you with an income but they could teach you valuable admin skills needed for the world of business.
When saving up, you’re best opening up a high interest savings account that will help you to build up the required funds more quickly. There are special business savings accounts out there with particularly high interest rates.
Take out a loan
If you don’t have the patience to save up and want to get stuck in as soon as possible, another option could be to take out a loan. You’re best off taking out a specialised business loan, as these tend to have lower interest rates than regular personal loans. Your local bank may be able to offer you one, or you could try peer-to-peer lending.
Having a good credit score will help you to gain access to a greater range of loans and could also allow you to pay less interest. There are credit-builder schemes out there that can help you build credit quickly.
Another option of raising funds could be to encourage investors to offer you the money. You could seek a single investor such as a wealthy individual or a company, or you could try crowdfunding which involves getting funding from lots of different people.
As an incentive to get people to invest, you’ll want to offer shares in future profits and possibly even other perks. Having a strong business plan will also help to build investors’ trust – you could consider getting the help of financial advisor to outline all the costs and help calculate future projections.
Take it slow
A lot of people overestimate what is needed to start a business. If you’re prepared to scale things back, you may be able to save money in the beginning and eventually build your way up. For example, rather than taking the decision to open a physical store with employees and POS systems, why not start with an online store run by yourself from home – you’ll save huge cost on the premises and staffing in the beginning. Similarly, if you’ve got plans for a restaurant, why not start first with a market stall selling food or you could rent a food truck. You can always get to the original starting point you wanted in the future and it will save you having to look into extra funding.