How To Start A Business With Little Capital
Starting a business may seem like a great idea to pursue a passion, but it has its share of problems. It is easy to worry about from where to bring in the investment for it, what kind of business should it be, whether it will give a return on investment and whether it will become sustainable and provide a stable source of income. While these questions and the uncertainty can act as deterrents to begin a business, you can still start a business with a little bit of planning.
Let us look at some tips about how to begin a business with little or no investment.
1. Keep working at your present job
If an individual who wishes to begin a business already has a stable job, it is a little easier to begin investing resources into a business or an idea. Having a job acts as a cushion on which you can fall back if things don’t go as planned. The job also acts as a source for initial startup capital by creating savings on which you can bank. You will, however, have to put in those extra hours to work on the business. Mailchimp is a popular email marketing platform which was created by founder Ben Chestnut when he was running a design consulting business.
2. Create a business plan
Once sufficient savings are pooled up, it is important to work on your business plan. Creating a list of variable and dynamic parameters which may affect the business, analysing the market for a demand, creating a business plan with minimal investment and operational costs and creating value for the product is important.
3. Start simple and build a revenue stream
One of the easiest ways to begin a business with little capital is most often by creating a service based model. Service based models are easy to implement as revenue can be generated after providing a service. There are many service based industries like washing and cleaning, housekeeping and delivery services, to name a few. If a product based model is your passion, consider starting off with services and use the revenue to build a product. For example, cooking or baking is the easiest way to generate revenue. Food will always see sales and the initial market demographic can be acquaintances, family and colleagues.
4. Consider a small loan or an incubator
Once a working model is established with revenue forecasts, consider taking a small business loan which will provide a capital pool that can be used to invest in scaling up and building infrastructure. Incubators are a great way to grow as well. An incubator acts as a source of funding for businesses if they have good business models. Many well known business schools act as incubators. The famous startup WeWork also began as an incubator platform for startups and they have branches all over the world now.
5. Crowdfunding
Crowdfunding is a very powerful tool to generate capital for your product or business idea. A lot of businesses kicked off using crowdfunding and it is not just limited to businesses. Crowdfunding can be used for any number of reasons like making a movie, starting a restaurant or funding travel. Oculus Rift is a virtual reality headset which was crowdfunded by multiple backers on Kickstarter, a crowdfunding platform. Oculus was later acquired by Facebook for over $ 2 billion.
Starting a business does not have to be a complicated exercise and it can begin by following these tips if there is the problem of initial capital . There is no shortcut to success, but these simple steps can help in achieving the goal of starting a business.
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