Running a business on a shoestring budget isn’t easy, but it can be done. In this post, we look at what goes into forming a shoestring business budget, and offer some tips for starting a business that doesn’t need a lot of money to succeed.
Money may be the root of all evil, but it also makes the world go round, and there are some things that are particularly tough to accomplish without a hefty budget on your side. Case in point: starting a business. It’s easy to start listing all the tasks ahead of you and see the ever-escalating costs loom ominously in your mind’s eye.
But while it’s definitely tough to start a business without significant funding, it’s far from impossible — particularly if you’re viewing it as a side hustle. If you’re not giving up your regular working routine, then you’ll still have money coming in, and you won’t need to commit enough resources to shape it into your primary source of income.
So if you have great aspirations for an engaging and profitable side business, but you don’t have the funding to just throw money at the project, then you’ll need to get creative. Let’s get into some tips for running a small business with an even smaller budget.
Some say that knowledge is power, and if that’s the case, then the internet is the closest humanity has come to achieving nuclear fusion. Social media has only added to this: having become accepted by the mainstream, it’s amazingly become perfectly normal for influential entrepreneurs, academics and experts to spend significant amounts of time on social media.
Here’s what this means for you: there’s a huge chance that you can not only learn from the teachings of your business inspirations but also speak to them. Getting that type of correspondence for free is something that would have seemed ludicrous even a decade ago, but has now become commonplace in the online world.
You don’t even have to put a lot of time or even effort into it — it might be as simple as finding someone’s Twitter account and sending them a message, or just emailing them. If you’re polite, respectful, and inquisitive, there’s every chance that they’ll get back to you with some invaluable tips, and possibly even relevant connections.
As well as connecting you to experts, the internet supplies a near-inexhaustible variety of free (or cheap) tools and resources, and you can make good use of them to keep your costs down. Just about any task you can think of will have some suitable type of utility or mobile app. To handle your finances, for example, you can use free software such as ZipBooks.
And as you make your way through the numerous parts that go into starting a business, such as choosing a product or service to focus on, figuring out legal requirements, choosing a company name, and launching your first website, you’ll benefit massively from looking around for relevant guides (and free services).
Most of the time, you only need to type “free guide to [your topic]” and you’ll find a good selection of useful guides. Marketing, creating digital media, pricing services… If it’s a common part of the business process, you’ll have plenty of pieces to choose from. You can even check social media for links to the most popular recommendations.
Additionally, don’t overlook the value of forms and sites like Reddit for getting some community assistance. Got an idea for your business and want a wide range of comments? Why not post about it on the r/smallbusiness subreddit? Say that you want to start a business but could use some advice. Take each reply with a grain of salt, by all means, but remember how much free consultation assistance you’re getting.
Having a shoestring budget is entirely different from having no budget at all, and you will need to spend it to get your business going. What will make all the difference is how you spend it. To be maximally successful, you must think very carefully about where your money will make the most difference (something that can be tricky to determine).
Here’s why it’s harder than you might realize to distribute your shoestring budget: while there are plenty of tasks that you can handle manually (ostensibly at no cost), running a business takes up a lot of time (and that’s after starting a business, which is also a big time-sink).
Furthermore, you’re actually building a side business, so you have plenty of obligations already on your plate. What’s the use in working on something for 10 hours to save $20 when 10 hours of your limited time is worth far more than that?
Consider a classic example from the ecommerce world: setting up a website for doing some part-time sales work. You want your website to feel yours, so you work on the setup for hours, days, even weeks until it feels good enough to go live. It’s satisfying to put that much work into something — but could that time be more valuable spent elsewhere?
Probably, yes. Diversifying merchants often sell their online businesses, and might not even charge that much. If you’re done with a website, keeping it doesn’t help you, so offloading it for even a small sum is worthwhile. There are vast online marketplaces of ecommerce stores that are largely ready to use, and it’s much easier than you’d expect to find one cheap enough to support a business on a shoestring budget.
Which is more cost-effective? Creating your own site, or finding something from an existing site market? Again, we return to the cost of your time. Even if you judge an hour of your attention to be worth $30 (you should be valuing it at a much higher rate, but let’s start low), does that compare favorably to spending $50 on a site that already works perfectly?
Spend an 8-hour day designing a website from scratch, and that’s a $240 cost by your estimation. Sometimes, spending money is the only way to save money. Use your expertise to build your business, but don’t get stuck on trying to do everything yourself.
If you just can’t see a way to make things work on your shoestring budget, then perhaps the answer is to bring two modest budgets together to make something viable. Pooling resources for a side hustle can work extremely well if you choose the partner sensibly and you’re extremely clear about the terms of the agreement.
Maybe you work with someone who might be interested, or you have a friend with budding entrepreneurial inclinations. Most people can see the appeal of running a small business, so there’s an excellent chance that you’ll know someone who’d give it a shot.
You might even find that your boss is open to pursuing a joint venture — an option that could make it a lot easier to balance your regular workload with your side hustle (but could also make the office a more complicated place, so tread carefully).
If you have long-term goals for your side hustle that require it to be a solo operation, you can agree on some type of bowing-out point for your partner: once you reach a point at which the returns have given you a sufficiently solid footing to work alone, your partner can take a decent payout and leave everything to you. It could be the solution you need.
Making the best of a business on a shoestring budget is extremely challenging, but you mustn’t let this hold you back from pursuing your ambitions. Follow some or all of these tips as you start a business, and you’ll have a greater shot at success.