One of the first things I discovered upon starting Latest Free Stuff, was that no matter how much money I had, it was never quite enough. I’d started out with these – I was going to say grand ideas, but actually, they were really pretty modest – about doing it all myself. I was a student, with more free time than my lecturers would have approved of. I had a laptop. And I had a bedroom to work from. The only other thing I really needed was a genius idea and my own innate abilities. What more could be wanted? Money, as it turned out.
The Cash Requirements of an SME
It’s obvious when you think about it, but everything costs money. Even if you’re intending to only work online. It’s not just a case of buying a cheap domain name and building from there. You need to actually create the website. And that involves copywriting skills as well as coding.
Then you need to hone your product. Spend cash on marketing. Enhance your web presence. Build your reputation. Handle all of the seemingly endless red tape. Finance recruitment and payroll. And even find a way of financing your finances: are you capable of doing your own tax return? Bookkeeping? Payroll?
So yeah, starting a new business is really exciting. But no one ever said it was cheap. There are, however, a few things you can do to stretch your budget as far as possible.
Only pay for what you need
It can feel like you’re swimming through an endless sea of red tape when you’re first starting out with a new business. The temptation is to offload the lot of it. You’ll Google the phrase ‘how to register a business’, for example, and find streams of companies offering to do it for you for ‘a minimal fee’. It sounds appealing until you realize that all you actually have to do to officially launch your business is registered with Companies House. And you can do that yourself. For nothing. You don’t need an accountant or an agent. That’s just throwing money away. And you’ll find countless other examples of this as you move through the process.
Take control of bookkeeping
When you get to the stage of being a big multinational, there’s little doubt that you’ll need a dedicated bookkeeper or two. But when you’re starting out, there’s very little that you can’t do yourself. For most people, a straightforward spreadsheet will do. If you lack the confidence, then online packages such as Xero and QuickBooks are easy-to-use and cost-effective.
Stay on top of your cash flow
Leading on from the last point, it makes good sense to review your cash flow daily. Or, at the very least, weekly. If your bookkeeping is in order this shouldn’t take long, and it can protect you against unnecessary fees or client disappointment when the kitty unexpectedly runs dry.
Use a freelance workforce
Even if you do actually possess all the mad skills I once thought were at my fingertips, there comes a time in every business where you have to seek help. You can’t do everything yourself. At least, not if you want to do it well. But hiring permanent staff is expensive and comes with a whole host of unexpected overheads. Especially if you really only need help on an ad hoc basis, or with a niche set of short-term issues. Working with sites such as Freelancer, PeoplePerHour, and UpWork can give you access to the help you need, when you need it, without holiday pay, sick pay, pensions, equipment, or even biscuits for the staff room.
Create an appropriate web presence
It doesn’t really matter what type of business you’re running, it will benefit from an online presence. A dedicated website will broaden your potential audience a thousand-fold. More. But unless your business is tech-based and you’re trying to sell coding or web design services, there’s no need to spend big money on a developer. At least not to start with. It takes seconds to register a web name with companies like 123 Reg. And platforms like Weebly have simplified the site creation process so much that practically anyone can now create a smart-looking website with little more than a few hours work.
Explore free marketing opportunities
If you want to maximize the potential of your business, you will have to invest in marketing. In fact, marketing is usually one of the biggest drains on a company’s finances. And there’s no getting away from that. However, you can reduce that drain and supplement your coverage with the help of forums and social media. Creating strong content for your website is important anyway; it will help generate the
Keep track of what’s working – and what’s not
It’s very easy at the beginning of a business to think that if you keep throwing money at the project some of it is bound to stick. But unless you measure your performance against specific objectives, you’re never going to be able to maximize the potential of your investment. Follow your money. Check out your ROI. See what every penny has got you. And if something isn’t working, stop doing it. If it is working, do it again, only better.
You can’t help but sound pretentious when talking about networking, but attending events and meeting people is the absolute best way to build the contacts you need. What has this got to do with budgeting? Because once people know you and like you, they’re more willing to do business with you. Whether that’s buying your services, offering services you need, or offering to mentor you. All of these things are priceless.
Look after your customers
It doesn’t matter how good your products are. Or how clever your marketing. If you provide a shoddy service and fail to put your customers first, your business will fail. There is no better form of marketing than a positive word-of-mouth recommendation. There is no worse than an aggrieved customer shouting their issues from every rooftop – virtual or physical.
It’s not easy starting a business. That’s why 96 of every 100 SMEs fail to make it beyond the first 10 years. It’s a startling statistic, but one any small business person will understand. The trick to beating those odds and becoming one of the lucky four percent is to take control of your finances from the very start.