Is it really possible to start a business on a shoestring?
Before we try to answer that question let’s consider some important things about starting a business or whatever size today.
One thing is that you need seed capital no matter how small. It would be very difficult, almost impossible, to start with no money. There could be exceptions such as someone getting hold of scrap metal for free and starting his or her first trade with nothing down.
The small business advisor gooroos whether talk-show hosts or self-styled business start-up evangelists would like you to believe that it takes very little to start a business from scratch. But it isn’t so.
Any form of start-up will require funding. And it often costs twice as much as you have planned. This is something that we will come to in a moment — how to go about planning for your start up whether it is a home-made product for a local food market, an internet retailer or a small manufacturing business. But at this stage it is important to have a cash kitty — seed capital — to start your business from scratch. Buying a business is a different story — you will need to have capital to hand or at least know where you are going to raise capital.
Money is a crucial element but time is also important. What you thought will take a few weeks or months can become many months or even more than a year. Entrepreneurs starting out need to budget for at least three times more time to complete the various phases of starting a new business. We’ll come to the different phases of a startup later. For now realise that when you break down all the projects and tasks required to start your business you will find that what you thought how long things will take will be far different once you get going. Time is money and it’s important to think how much it will cost you while you start building your business.
Starting your business on a shoestring means starting with minimal capital and using whatever resources you have, can borrow or obtain or barter for free. For many people forced into circumstances where they have to make an alternative livelihood it’s not a dream but a reality. Many people are starting new enterprises on a shoestring as we look at this article.
Before starting out take time to jot down the main elements of your plan — use whatever you like — get it down in electronic form or on a scrap piece of paper. It’s not advisable to carry it all in your head. Map out what it will cost and how much time it will take to develop your product, test it in the market, create the marketing materials and to start selling. Production planning is also required if you will be manufacturing a product whether doing it yourself or outsourcing it.
If you require assistance with your planning, please let us know.