Start small: In today’s challenging economy, you might be better off deciding to start small but be prepared to grow. By starting small you are able to test your product or service. For example, instead of opening a retail store, consider as an alternative opening an online retail shop. Most brick-and-mortar startups require serious cash outlays to get going. Service businesses generally cost less to start than retail enterprises. If you are prepared for growth when you start small you can easily adapt if your venture is successful.
Borrowing: Capital can be very difficult to obtain for startup entrepreneurs to get from banks and other lending institutions. You may need to find the money on your own. Often times banks have some minimal start-up loan programs offered and the government also occasionally will have grants for certain industries or start-ups. You will need to research and use connections you have to identify all possible sources of capital. Other suggestions are friends, family members or using a small portion of some savings that you have.
Start on a part-time basis: Unfortunately, starting smart often means not paying yourself much of a salary — at least initially. Consider keeping your day job and starting your business part-time. This will help keep money flowing to pay your bills.
Shop around: Aim to spend as little as possible when you start your business, but be smart about it. Buying cheap often means buying often. Do you need a dedicated office, or can you work out of your home at first? If you will be seeing clients in your office, you’ll want to make a good impression. You can buy good quality second-hand furniture; your clients won’t know the difference. You can also consider renting executive style offices (on an hourly/daily basis) for your client meetings.
Take advantage of technology: User-friendly software programs like QuickBooks can help you manage your finances and track your cash flow. QuickBooks is very user friendly and easy to use. You can educate yourself through on-line tutorials or through inexpensive one-day courses. Banking online can also save you time and money.
Be vigilant: The economy has caused many businesses to stretch out their pay cycles. For many, net 30 days is a thing of the past. Starting smart means staying on top of your invoices and, if you don’t get paid on time, following up to see why. Depending on your business, you can try offering discounts to those customers who pay early. Collecting your receivables is critical to the continued success of your business and your business reputation. If you don’t get paid, you can’t pay your employees or suppliers.
Barter: Bartering your products or services can save a startup business owner hundreds or even thousands of dollars. You can visit barter exchange sites online or just strike deals with other business owners. Ensure you create a formal agreement explaining what each side acquires within the barter agreement. Also, be sure to keep meticulous records since for tax purposes bartering is considered “income.”
Start close to home: You’ll earn money faster if you focus your efforts on landing easier clients first. Look for projects that won’t cost you a fortune to complete. This enables you to establish your reputation and build your brand, which is an important factor when going after larger, long-term projects.
Although these tips are aimed at startup businesses, most established business owners would do well these days to adopt a starting smart mentality. Thinking like a startup keeps the focus on cash flow, productivity and practical innovation — things all entrepreneurs can benefit from, regardless of the stage of their businesses.