People often say they want to start a business, but they don’t have the money. Students will ask, what do I need to spend to start a business? How much money? You can spend a fortune starting a business, but you know, it’s not necessary, nor is it an indication of future success. Yeah, you read that right. The amount you spend to start a business does not determine the likelihood of success. According to the Small Business Administration, the average micro-business (home-based, single person) costs around $3,000 to start. Many start for less than that. You can realistically start a business with $500 or less.
When you’re first starting a business, you need to know what your business idea is. You need to identify your ideal customer, develop a business plan, outline your products or services, determine your pricing, and ultimately build a website. More things go into your business, but that’s about the minimum that you need to start. And none of those items have to cost money. You can do all of that yourself, or you can pay. Work within your budget.
Many small business owners try to DIY as much as possible, which can be an excellent strategy for further stretching a small budget. Thanks to Google, YouTube, blogs like this, you can learn a lot about building a business without spending anything. You can watch YouTube videos on how to create a business plan and download templates from Google. You can outline your products or determine your pricing on your own. You can even build a website yourself using WordPress, Squarespace, or another website builder. You may need to pay for website hosting or a template or something, but the out of pocket costs can be very small.
The truth is, not much. I started Etched with a $1,000 investment to open my business bank account. I spent a few hundred dollars getting the legal entity set up and registered, create my brand, and building my first website. I had a friend who was a graphic designer create my first brand. I built the website myself using Wordpress. I bought business cards in time for my first business meeting. Stay lean. It helps.
I’m pretty cautious and want to grow at a sustainable level. I’ve been through bad mergers and failed acquisitions in the corporate world. I’ve been laid off from a 6 figure position after a company sold to an investment group. I’ve struggled through years of not having enough staff to fulfill the contracts because the company couldn’t afford to hire the people we needed because of other financial insecurities (not that they tell you that at the time, trust me ;) ). Some of these experiences in the corporate world shaped me as a business owner, and I take a conservative approach to Etched’s growth. We grow year-over-year, I invest in training for myself and marketing & advertising for the business, but I do it on a scalable level. To me, the longevity and stability of the company are vital.
When I wanted to begin offering online training courses, I knew that I needed to continue to serve my 1:1 clients while building the training side of the business. I took a percentage of my 1:1 revenue and invested in the tools that I’d need to start the online course business. I took a training course, bought video & audio equipment, and video editing software. Yes, there are DIY tools for some of these, but the paid tools work better and faster, and you know what sometimes it pays to invest. I could have probably learned how to build a course on my own, heck; I’ve offered training courses in person for years. I knew what to include in the course, but I didn’t know how to sell it online. I’ve sold all sorts of things over the years, but I’d never sold online training programs like this, so I invested in myself because I knew that it would save me time, and in the end, let me make more money.
When it was time to run Facebook Ads to grow my audience, the money was there because I’d saved a percentage of the profit from my 1:1 work to cover the expense. I follow the Profit First model for my business, and it’s worked great. Check out this blog post to learn more about why Profit First is such a great resource for entrepreneurs. I recommend the book to all of my students and my clients who are struggling with business finances.
Invest in training in areas that you need help. Yes, you can learn most of it on YouTube or Google, but unless you have unlimited free time, which I know most of us don’t have, you can get to where you want to be faster by paying for training. It’s likely you went to college or took courses for your corporate career, why wouldn’t you invest in your entrepreneurial career too?
Ask questions. Check out the credentials for your trainer. Are they on LinkedIn? Do they have much background or experience in what they’re teaching? Do they have student testimonials or business testimonials? They may not have a lot at first. Ask questions. Verify the information they share if you’re concerned. If you feel uncomfortable with the information, class, price, etc. don’t invest yet. You want to feel certain that what you’re doing will work for you.
Don’t become a course collector. Buying courses and not doing the work will NOT help you succeed. I like to focus on one course at a time. Buy it, do the work, implement it in your business, and start to see the results. Buying all of the courses you see will not make you more successful. Investing in all of the tools people try to sell you will not make you succeed faster. Stay focused on what you need to know right now to do the task in front of you. You’ll figure out the rest as you grow.
The bottom line is you can start your business without a big investment. Start small, do what you can yourself, use the free information on the internet, supplement with paid courses or coaching where you need specific help. If you have thousands to start a business, super, but it’s not necessary. You can do this on a few hundred. Get out there and get started. The sooner you begin to make money in your business, the sooner you can expand, grow, and start doing even more. Good Luck!
If you’re not sure where you want to start, request your copy of my free Business Builder’s Guide. It will help you narrow down your business idea and get started today for free.