Nowadays, many people would love to become entrepreneurs and have an opportunity to start their own business. The promise of a lucrative career is enough to draw anyone towards an entrepreneurial profession. However, starting a business isn’t cheap and running one requires even more funds. That’s why many people give up on this endeavor, mainly because they lack the initial capital to start things off.
Still, with a bit of careful planning and extensive amount of research, you can turn your idea into a working business with minimal investment. It’s important to understand that starting a business always requires some kind of capital. But, the amount of funds you’ll require highly depends on the nature of the business you want to start. Here are a few ways to start a business with minimal investment.
Conduct Market Research
The first thing you want to do is research the market. The main reason is that it will give you a clear picture of how your business idea might perform on that market. The main aspect you’re looking for with market research is who your target audience is and will they have any interest in your products or services.
Moreover, you must assess your competition and determine how they operate on the market. Last but not least, you need to find a product/market fit. That means that you won’t simply try to outrun your competitors with a fool-proof strategy. Instead, you’ll be able to create a product that will satisfy the needs of your customers and create enough buzz around it that your customers will deem it as essential to have. That way, you can create a business that won’t require too much investment.
Take Care of Legal Expenses
There are some expenses you simply can’t avoid, especially if you’re trying to keep your business investment to a minimum. Every business requires licenses, permits, legal fees and insurances to operate legally. If you skip this step, you’ll need a hefty investment to take care of legal issues and claims made against you. You must also choose a proper business structure that will determine which licenses and permits you’ll need, as well as the amount of taxes you’ll have to pay.
For instance, sole proprietorship requires the least amount of fees and paperwork, but it’s a structure with the highest amount of liability. That’s why many businesses choose to establish a Limited Liability Company (LLC) or some other structure instead. Furthermore, once you’ve chosen the right business structure, you can easily set up a company online, which is also an important step towards ensuring your business is legal.
Seek Outside Investments
There are many ways you can get proper funding to develop and grow your business, as long as you have a solid business idea. Angel investors and venture capitalists will require you to present them with extensive research about your business idea before they even consider funding it. You’ll require social proof that there’s enough interest in your products or services. You’ll also need to have at least a minimum viable product (MVP) ready.
What’s more, you’ll need to convince them that you can handle your business on the market in both good conditions and bad. The only differences are that angel investors look to fund someone who is passionate about their business idea, while venture capitalists look for ideas that have the potential to become profitable fast. Also, angel investors will ask for 25% ROI, while venture capitalist will ask for shares of your company in return for funding your business.
In today’s business climate, crowdfunding has become one of the most popular means of financing business ideas that lack the capital to become a business on their own. Simply put, you’re avoiding investors and loans, and going straight to your target audience for support. If your audience likes your idea, they’ll donate funds to help you get started.
Platforms, such as Kickstarter, GoFundMe and Indiegogo allow you to set a limit on how much money you need and a time limit by which the funds need to be collected. After that, it’s up to the crowd to donate as much as they can and help you finance your business idea. In exchange for their support, presuming you’ve managed to raise enough money, you can offer your supporters small shares of your future company, premium benefits, discounts and so on.
Starting a business with minimal investment isn’t easy. There are always some expenses you simply cannot avoid. Nevertheless, if you do your research right and carefully plan ahead, you can keep your business investment to a minimum and still manage to successfully launch your new venture.
About the Author