How to start a business on a shoestring budget
- Validate your idea
- Before you start spending time and money speak to people in the relevant industry or potential customers about your idea.
- Understand what your competitors are missing out on so you can really define your Unique Selling Point that will give you an advantage.
- Allocate 60% of your budget to marketing and sales
- Also, do not underestimate the time it takes to get results. It can take months.
- Only spend where you clients/customers hang out
- The more creative you are the less you have to spend.
- When you sell a product and service, understand the mark-ups and margins in your industry.
Starting out, you may need to make offers to attract customers but Aim at selling your product at 2-3x the cost of making it. That will leave you enough money for overheads and a profit.
- Be resourceful with the cost of website, branding and office. You can always change later.
- You can build a website for free and pay £1 a month for hosting by using 1&1 Ionos, Wix or any other similar sites.
- There are logo builders like TaylorBrands where you can make a logo with endless iterations for £30. It will be ok for a start, you can always change later when you have more customers and cash.
- Working from home is a great money saver, to hide your home address, Get virtual addresses which can give you London company address for £70 a year. If you need a meeting room, these are usually available for £60-70 for few hours.
- Budget for registering with data protection, certificates, membership with relevant institutes, licences and insurance.
- For example if you open a food preparation business you need to comply with Health and Safety regulations and have relevant licences.
- If you collect peoples’ personal data you will need to register with ICO and pay data protection fee.
- Soletrader or limited company?
- The key difference is that company will be limited by shares, so if someone sues you, the company will be liable and your personal assets are protected.
- As a soletrader or partnership, you will be responsible with all assets you own incl your house.
- There are tax consequences, but they are small after recent changes.
- Accountant or DIY?
Start off with Excel or Xero (c.£20pm.). It’s important to keep on top of your expenses, as this is how pay less tax.
When you get too busy, give us a call. We have super reasonable rates to help you out.
If you would like to discuss any of the above, go to our website to find out more and book a free consultation.
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Best of luck!!
Linked In: https://www.linkedin.com/in/riina-trkulja-53462b14/
Riina qualified as ACA accountant when working with KPMG, then moved on to PwC due diligence practice. Her most recent job was with James Caan, the Dragons’ Den investor. She worked in his private equity business as Investment Director and also Finance Director.
She is a founder and Managing Director of AccountsAssistants.co.uk that supports small businesses by providing finance team outsourcing, bookkeeping, accounting and Finance Director services at reasonable rates. She also supports her clients with all the COVID related queries. She is a Fellow member of ICAEW.