Starting your own business is a major undertaking and not something to be taken lightly. One of the main problems budding business owners face when looking to get their business idea off the ground is the sheer cost of setting up even a modest-sized operation. Many entrepreneurs choose to look for start-up capital from wealthy investors, and that’s certainly one possibility. Another is to take out a business loan, or perhaps pursue the relatively new option of crowd-funding. All these are viable choices, but they do come with a high degree of responsibility because you are beholden to other people and institutions until the loans are paid off.
Can you downsize your idea?
If the costs of setting up the business you’ve set your heart on seem prohibitive, consider whether there is a cheaper way of achieving a similar outcome. For example, if your dream is to operate a dog grooming parlor, you’ll need premises, facilities, and staff, plus there will be overheads and running costs that could be quite substantial. Presumably, you want to open a grooming parlor because you love dogs, so is there a way you could work for yourself, in close contact with your canine friends, without incurring all the expenses of having your own premises? One possibility would be to try freelancing, visiting people in their own homes and carrying out all the grooming, trimming, clipping and shampooing services you planned for your grooming parlor without needing to raise the hefty start-up costs.
Have you done your research properly?
If you’ve costed out your business plan and the figures make for grim reading, go over them again and see if you can find ways to save money without compromising the productivity of the business. For instance, if you’ve listed accountancy expenses, would you be better off completing your own accounts and just having them certified at the end of the financial year? There are several software packages on the market aimed at small business owners to enable them to take control of their accounts, plus other handy tools like a check stub maker that can supply you with genuine printed payslips for your employees for a reasonable fee.
Could you use freelancers instead of employing staff?
Staff expenses are one of the main costs in many businesses, but without high-quality staff, your business may struggle to turn a profit. If you would need to call on other people to make your business work, rather than spending money on recruiting, training, supporting and paying staff of your own, could the work you need to have done be equally well completed by a freelance worker? There’s a considerable body of highly talented freelancers on which you can call, so this could be an advantageous arrangement.
In your efforts to reduce start-up costs, don’t fall into the trap of adjusting your budget figures to make the budget balance. You need to be honest about your expenses, your likely revenue, and your predicted profits if you hope to become a successful business owner.