The 8 Key Rules of Starting the Business of Your Dreams on a Shoestring Budget
A few years ago, before the Internet was pervasive, before everyone carried a smartphone and before do-it-yourself software tools were available for free, it was difficult to reach a critical mass of new customers without spending a million dollars on a website, custom software and television advertising. Now you can match a big company with worldwide reach for a few thousand dollars.
It’s a new age for aspiring entrepreneurs, where anyone with a dream or a hobby should be turning it into a business. The bad news is that many are already doing it, with competition growing, so the longer you wait, the less chance you have of getting there first. The good news is that most haven’t learned the new rules, so there is still room to surge ahead of the crowd.
Here are some of the key new rules I have learned by starting my own company, investing as an angel in other startups and mentoring many more new entrepreneurs over the last few years:
1. Do incorporate a company, but keep it simple.
A limited liability corporation (LLC) can be formed in most states for less than $100 directly through the Internet without legal assistance. This will keep financial and legal liabilities away from your personal assets, but won’t cost you the big initial cost and ongoing time and fees of a C-corporation.
2. Create a business plan online, but don’t wait for funding.
Too many entrepreneurs still think plans are for investors, and investors are required to build a startup. Both are wrong. You need a simple plan to set real milestones, and you don’t need investors. Finding them takes too much time and effort, and takes away control and ownership.
3. Work out of your spare room, and keep your own records.
Don’t assume that you need to rent an office to start a business or hire an accountant to track expenses and assets. There are several easy-to-use accounting packages available, such as QuickBooks, which run nicely on your existing small desktop or laptop.
4. Find do-it-yourself facilities for hardware prototypes.
You no longer need to travel to China or hire an expensive prototyping expert to mock up your new design. Look for free help at a local university or find one of the new maker spaces, such as TechShop, where you can rent time and equipment to do the job yourself. Building the prototype can be fun.
5. Create and register intellectual property online.
In a new startup, there is tremendous competitive value in registering intellectual property early, but you don’t need to contract these tasks to expensive experts any longer. Trademarks, copyrights and even patents can be completed online by anyone through the U.S. Patent and Trademark Office site for a few hundred dollars.
6. Use virtual assistants online to supplement your efforts.
Skip the costs of payroll, office equipment and employee benefits by using remote contract services and low-cost freelancers available online. They provide the targeted expertise that you may need, with the flexibility to increase or decrease resources as you learn what has to be done to scale.
7. Use low-cost subscription software and cloud computing.
With Google or Amazon, you can get all the application storage and computing power you need without even thinking about an IT staff and big up-front costs for computer servers and applications. All costs are month to month, with scaling options to match the size of your business.
8. Take advantage of social media and free websites for marketing.
Many entrepreneurs today build and maintain their own websites, with powerful tools such as Shopify. Site marketing is easily extended through blogs, Twitter, Facebook and social media. Don’t sign up for outside search-engine optimization, public relations or other experts until your business is generating revenue.
Of course, not all new startup ideas can be developed this way, so pick an idea that fits. At worst, it will be a low-cost learning experience that will prepare you for the ultimate project you envision to change the world. In the meantime, I am convinced that are many good business opportunities now within the financial reach of almost anyone willing to do some homework.
But don’t wait too long to get started. I believe we are in the midst of a fundamental shift towards the entrepreneurial lifestyle, and away from the unsatisfying, highly specialized and highly focused hourly and salaried jobs. Now you can do what you love to do at a cost you can afford. The control is yours to keep. What is keeping you from getting started today?