Starting a business from scratch with an unforgiving budget is a reality that many entrepreneurs face. It’s not easy – in fact, sometimes it feels almost impossible. When budgets are tight, an entrepreneur is tested to the max and must hustle to make ends meet. Here are some things that you can do to help you along your online startup journey.
Forecast Well and Plan Diligently
With a tight budget, forecasting will be your friend. You are going to have to plan things out in minute detail to ensure that you aren’t overspending anywhere.
First, you need to be aware of the monthly payment trap. Online businesses rely on tools paid on a monthly or quarterly basis under the SaaS model. These individual payments add up quickly, and it can be easy to think that something is “only” $20 a month, forgetting how much that actually amounts to over a year. Obviously some of these are unavoidable – but make sure you have an idea of the actual total cost before you sign up. Monthly bills like these can add up and cripple a young business.
Second, factor in delays and don’t be too optimistic with margins. Don’t get ahead of yourself and become overly ambitious in those early days. “All web projects finish on time and on budget” – said no one ever.
Try doing things for yourself. This will help you cut back on initial costs. But at the same time, be realistic about how much you can take on. If someone else (or a software) can complete the same task in an hour that would take you up to two days, then your time might be best spent elsewhere.
Lastly, write your budget plans down and get other people to sanity check them. Everything is subject to human error. Illogical assumptions and inconsistencies can easily creep in, so it’s worth flagging any possible issues early on.
Don’t Grow Too Soon
Everyone is obsessed with growth and growth hacking (and quite rightly so), but growth at the wrong time can be crippling.
In the beginning, think about scaling, not necessarily growing. Find ways to work better and more productively, immediately hiring loads of people. It’s well known that online income fluctuates and online work can be very project-led and seasonal. Therefore, it’s important to be realistic about future funds, and not hire permanent staff for a temporary project.
Become a Jack-of-All-Trades
Learning about copywriting, content management, SEO, HTML, ecommerce and other core skills will help you save money. Being able to do more things for yourself in your business is empowering.
Even if you can’t actually do everything yourself, just by learning new skills you will be able to find better deals with vendors and vet their work more effectively. By opening your eyes to the different fields of the online industry, you’ll be able to decipher jargon-filled sales pitches and reports. Many online entrepreneurs actually find a new niche or product during their journey – so embrace the learning experience as part of your quest to becoming a better business owner.
The ultimate entrepreneur’s dream, crowdfunding, is an exciting way to get members of the public to invest in your business and your idea. Successful crowdfunded projects tend to either add user value with a new innovative product, or they showcase an exceptional level of creativity. You won’t get people to just hand their money over on these sites. (See Kickstarter for some ideas of successful crowdfunded projects). But If your idea hits the brief, this is a free financing method you’d be crazy not to try.
Hire a Virtual Team
Hiring a virtual team is a great option for a microbusiness leader who wants to scale, not spend. Before you start, it’s important to explore which tasks are the most effective ones to outsource. If you’re managing websites, you can outsource some of the content management and data analysis quite easily. Some online marketing tasks can also be done virtually, and virtual PAs and admins can take some of the weight off your shoulders when it comes to business administration tasks.
However, do be careful about sharing all your personal details, business details and IP with someone you’ve actually never met. Learn how to safeguard your business by sharing details in increments.
It’s also worth bearing in mind that managing people online can be tricky. You should aim to create processes for your online team, and don’t ever pay someone upfront. Here are some tips on how to effectively manage a virtual team.
Become a Dropshipper
Probably one of the best ways to do ecommerce on a budget right now is to become a dropshipping ecommerce merchant. Dropshipping means that you handle the sale, whereas someone else handles the fulfillment. It’s easy to set up and a great way to make money with few startup costs. Just make sure you find the right supplier who fits in with your business plans.
Before you buy, be sure to take advantage of free trials and the digital “try before you buy” mentality when choosing an ecommerce platform for your dropshipping venture (build your first online store for free here). You can use the professional themes that you get with the platform, then customize with a logo and your own imagery.
Don’t forget that you will be dealing with all the sales and customer service side of things, so don’t underestimate the effort that goes into ecommerce management as a whole.
Build Marketing into Everything
Reap the potential promotional benefits of all the relationships, connections and stories that come out of starting your own online business.
Your personal brand can carry a lot weight in the beginning, so make sure you’ve got your story straight. Start a blog documenting your startup struggles or share business tips with the local online community. Remember, you don’t always have to be sharing success story after success story – sometimes being vulnerable and honest about struggles you’ve had and the lessons you’ve learned is actually a much more effective content strategy.
Also, don’t be afraid to ask for what you want – whether it’s for a guest blog, an endorsement or just a bit of somebody’s time. You’ve got to be brave because if you don’t ask, then you definitely won’t get.
Embrace the Power of Content
Content marketing is a great business growth strategy (if done right). Learn how to manage content production so that it doesn’t take over and eat into strategic business time. You can outsource some of the writing and research work on sites like Upwork to help you manage your time better.
It’s important to understand how your content fits into your customer journey and how it helps them answer their key questions. There is no point in creating content just for the sake of it. A great place to get help with creating compelling startup content is HubSpot’s free Inbound Certification.
We hope you’ve got some good ideas on how to manage budgets smarter when starting your next online business. What online business tips have you got to share? Let us know!