How to Start Up a Small Business With Limited Capital
To make money, you need to spend money -- so goes the old adage. However, not all entrepreneurs have access to a lot of capital. The key to success is to do more with less. In entrepreneurship circles, this is known as "bootstrapping." Be creative with your business financing, maximize your assets and minimize the liabilities that you need to pay out. Doing these can allow you to create a successful new business with minimal capital.
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Instructions
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Focus on maintaining a healthy cash flow. Your cash flow is more important than profits because being profitable is not enough if the cash is tied up. Provide incentives for your customers to pay their bills early, such as offering discounts, and negotiate with your creditors to delay paying your bills as long as possible.
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Pay with stocks rather than cash. Offer your contractors and employees stock options in your company instead of cash payments. This strategy was successfully employed by Priceline.com when the company hired William Shatner as a spokesperson in 1997, paying him entirely in stock options.
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Use low-budget marketing tactics. Focus on building a reputation through word of mouth by encouraging your customers to befriend your company on social networking sites. Rather than paying for print or television commercials, develop online videos that are creative and entertaining so that people share them with their friends.
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Use cheap labor. Offer internships for students and recent graduates looking to gain some experience. While you will need to invest time in teaching these people, you save on the expensive salaries commanded by professionals while still getting enthusiastic and capable staff members.
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Minimize your own salary. Until you manage to generate regular, sizable profits, pay yourself only the minimum salary that you need to survive. This may mean making adjustments to the lifestyle you are used to in the short run, but in the long term, it will help your company to become profitable.
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References
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