Business is the buzzword nowadays, especially because the pandemic has led to jobs becoming scarce and workers getting laid off or terminated. With a business, displaced workers have an alternative source of income, acting as a cushion for the uncertainty that the pandemic has brought to the job market.
However, starting a business is easier said than done, what with the growth and decline in economic conditions, fluctuating social factors, political and legal changes, and rising competition. Furthermore, starting a business requires starting capital and adequate motivation to see things through.
It also takes years of effort to sustain a business. Out of the multitude of businesses founded each year, only a small number get to stick around for the long run. If you decide to take the entrepreneurial path despite the odds, you may find inspiration and tips in this article.
7 Tips for Starting a Business with a Small Capital in 2022:
1. Ask Yourself What You Can Do or Get for Free
It’s simple to generate a list of impediments to you and your business’s success. It’s often more difficult to generate a list of opportunities that are right in front of you. If the thought of starting a business with no money makes you nervous, take a step back and consider what your business can live without for now. Suppose you’re into e-commerce, which makes a business page critical to your company’s success.
Here are things to look into:
- Do you really need a slick, custom-designed website when you’ve only perfected a couple of products for your new store?
- Could you instead create a Facebook page to promote your local business?
- Would it be more practical for you to create your marketing materials in Canva?
- Could you get into an exchange deal with someone by paying for their skills with your products?
2. Start with an Idea
Business ideas don’t always have to be new, as they could evolve from what already exists in the market. Look for gaps that your business can fill – whether that’s in terms of offering cheaper pricing, more luxurious quality, better service, or simpler and faster process.
3. Start Planning
At this stage, you need to create a brief and specific description of your company. The requirement is that anyone who reads it should understand your product or service right away.
Then develop a straightforward budget. Determine how much money you can set aside to get your business off the ground, as well as other resources like time, knowledge, and experience, Any budget constraints should be addressed at the outset.
See Also: How Do I Create a Startup Business Plan?
4. Build Six Months’ Worth of Savings
When creating your business plan, be honest with yourself about how much money you’re going to spend and how much money you’re going to make. Then, be honest with yourself about how long it will take before you see a profit.
Typically, it takes at least six months before you begin to see the cash coming in. That means you should have enough savings to cover your living expenses while focusing on your new venture.
5. Look for Sources of Financing
Friends and family: Here, the rule is simple. Avoid ruining relationships over money.
- Crowdfunding platforms: If you think your idea is not appealing enough, someone from crowdfunding sites might. You might be surprised how several crazy projects have seen the light of day thanks to crowdfunding.
- Government assistance: This typically applies to startups, with the government offering financing opportunities with very flexible terms.
- Banks, finance companies, or lenders: They provide private financing as long as you can demonstrate that your business can generate enough profits to repay the borrowed funds. Compare interest rates before signing on the dotted line.
- Angel investment: There are networks of high-risk investors who invest in promising companies or projects with seed capital. Create a compelling sales pitch to increase your chances of obtaining these funds.
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6. Hire a Virtual Assistant
Hiring a VA can be valuable for your up-and-coming company. For one, working with a VA is cost-efficient since you don’t have to hire them for the long term. VAs are independent contractors who can accept projects on a retainer basis.
Unlike your in-house staff, VAs are not included in your monthly payroll. VAs also don’t add to your company’s overhead costs since they provide their own equipment, pay their utilities, and have a workspace of their own. Most importantly, you’re not expected to shoulder the costs of health insurance and other employment benefits when you hire a VA.
A virtual assistant is also an all-rounder who can handle a variety of tasks, from administrative to marketing and creatives. VAs take pride in being multiskilled professionals who have extensive experience across industries. They can be valuable as you search and generate leads for your business, converting them into paying customers to increase your sales and revenue.
7. Explore Sales Opportunities
Begin with your natural market, which includes everyone you know, including family, friends, former coworkers, and so on. Send a direct message to every contact in your network to offer your product or service and make your first sale. Then don’t forget to ask for feedback on the quality of your offerings while being open to suggestions for improvement.
Allocating funds for your business may seem overwhelming at first, especially if you’re getting started with limited resources. That’s in terms of finances, manpower, and logistics. Fortunately, you’re not left without a recourse.
You could still make your dream business a reality as long as you have the basics covered: a game-changing business idea in mind, a solid business and marketing plan, a network of like-minded professionals, and excellent financial management skills. When you have these things taken care of, you’ll feel empowered because your vision becomes clear.
Yes, you’ll need more than just extra cash flow to start and scale your business. And yes, you’ll be making several errors along the way. You’ll need to learn the ropes. But, don’t worry, as they’re all part of your business development journey. You only need to be adaptable and resourceful and have the grit required to sustain what you started.