Starting a business on a shoe string

[Team Leith Training]

How easy is it to start a business up these days on a shoe string budget? For some people they have merely a laptop, bit of webspace, and an internet connection to start.
Many moons ago this was me. One thing you learn fast is how to get creative and make what you have stretch. Learning many skills as you go.
What experiences do people have from doing this, and what tips and suggestions can you offer other people doing the same thing? Especially for those unemployed trying to make a success.

One lesson i learned FAST was network fast. Skills barter. Offering something to someone in return for a little of their skills or service (even a testimonial) in return was one of the things i often did. And it WORKED!

 

[Paul_Rosser]

I think if you are selling professional services then it's fairly easy as you don't need much to start with other than a laptop, email and a printer.

If however you are planning on selling products then you need a lot more to buy stock in the first place.

Personally for me as Team Leith said networking was the most important thing and once I had a few clients ensuring I did everything I could to make them happy as you can't beat referrals from existing clients to boost business.

 

[ITsoldUK]

As above, when offering a service I started out with a PC, notepad and a telephone...

That was 8 years ago and my lifestyle business suits me fine AND I still have my own house and food in the cupboard.

One key ingredient is motivation.

Without that....forget it. Go work for someone else

Over the years you can add new strings to your bow and get relevant qualifications to enhance your knowledge but in answer to your question, with motivation you can start up with nowt.

Oh, and I don't network, breakfast lunch or other types...but that's just me.

 

[businessfunding]

Many businesses can be started on a shoestring, whether by scrimping and saving or by starting along-side a salaried job

It depresses me that so many new start feel that there is some inherent right to funding - often for nothing more than a 'just in case' fund.

 

[ITsoldUK]

Many businesses can be started on a shoestring, whether by scrimping and saving or by starting along-side a salaried job

It depresses me that so many new start feel that there is some inherent right to funding - often for nothing more than a 'just in case' fund.

Or the flip side when a new business goes down the pan and you speak to the owner and they say, I only took £15k out of it to live

But the business was losing money.................

 

Knowledge is the key to starting a business on a shoestring.

There are many avenues to selling goods or making money without having to buy stock.e.t.c

Motivation and passion will always come a poor second to knowledge.IMHO.

 

[Philip Hoyle]

It's surprising what you can achieve on a shoe string.

Two of my clients are cases in point.

One was a guy who started out making specialist electrical connectors in his garage - just a few old bits of metalworking machinery. 10 years later, he had three factories, 300 staff, £10m turnover and he sold out to one of the international oil companies for around £20m.

Another was a woman who started out selling household goods on ebay after buying £200 of stock and just constantly reinvested the sales proceeds, buying more stock every time, then created her own website and ended up after 5 years with a turnover of £1.5m and net profit of £500k p.a.

Neither of these had any investment whatsoever - the latter never even had a bank loan nor overdraft. Really shows what can be achieved just by ratcheting up a business bit by bit. The question is how you survive personally - if you need to draw profits out in the early days or fall into the trap of borrowing just to pay yourself, then it's a different story!

 

[Shaz2369]

Hi
Yes things can be achieved on a (very short) shoestring ..

My daughter & I started by selling a vehicle, buying a small amount of stock & then selling on local markets... To this end - 5 months on - we are opening our first retail outlet on 1st Nov!!
all the takings went straight back into stock...no drawings at all...
Exciting times ahead methinks.....

 

[Team Leith Training]

I think it depends on what you're startup costs are.

If your going to work in retail, these are going to be higher, what with costs of stock, storage, and logistics.
Comparing to say a web based e commerce site where the cost might be little more than the laptop, internet connect, and mobile phone. Perhaps cost of a domain and website.

The motivation and discipline factor are a most though, agreed there.

 

[S-Marketing]

As Earl said, knowledge is far more important than motivation, in my opinion. You can be the most motivated person in the world, but without knowledge you are going to need money to allow you to get things wrong.

 

[businessfunding]

As Earl said, knowledge is far more important than motivation, in my opinion. You can be the most motivated person in the world, but without knowledge you are going to need money to allow you to get things wrong.

To expand on this, knowledge is more than product and market knowledge it is a comprehension of the business environment and o the legailities surrounding your business - there is no point running a busy cafe only to be shut don by EHO..

 

[Mr Tel]

I knew a guy who started of with a van and a couple of lights serving the film & Television industry for sparks equipment. He then started up his empire called AFM lighting & 20 years later he sold the company to a Billionaire who owns Panavision Camera company.... I don't know how much for but he certainly ended up a multi multi multi millionaire in his early 50's........

It's amazing how people start from nothing and become successful and very very wealthy. You of course need abit of luck along the way tho aswell.

 

[Matt121]

As what many have already said, yes it is very much possible. You just need to know how to do it, who to target, motivation to achieve goals, and maybe a bit of luck as well.

 

[SMIB]

I agree and would say that it's really down to good research and careful budgeting. I've seen many startups begin with a few hundred pounds, and with free platforms to engage new audiences on e.g social media, you can really test a market before a full business launch for very little whatsoever.
Of course, a little bit of good luck goes a long way too

 

[teutonic]

Some inspiring replies ! I am going around in circles trying to decide where to start. Having been made redundant in my mid fifties I have a few k to start up but dont know how or where to start up, or what product or sector to venture in.

Sole trader is a given. I'd like to sell my practical skills as a service to business, rather than sell goods. Beyond that I cannot think how to do such a thing, and any good advice would be appreciated.

 

[S-Marketing]

Some inspiring replies ! I am going around in circles trying to decide where to start. Having been made redundant in my mid fifties I have a few k to start up but dont know how or where to start up, or what product or sector to venture in.

Sole trader is a given. I'd like to sell my practical skills as a service to business, rather than sell goods. Beyond that I cannot think how to do such a thing, and any good advice would be appreciated.

What practical skills are you thinking of selling?

 

[MissHanifaD]

I agree. We started our e-commerce business selling personalised gifts on a small budget and we used our home as the storage facility, in fact we kept it that way for quite a while until we had the funds to expand. Our initial outlay was for an engraving machine - but we were able to lease this and building the website. If you've got good friends and family who are willing to help you get started, then that is always a bonus - we were lucky in that sense

I think it depends on what you're startup costs are.

If your going to work in retail, these are going to be higher, what with costs of stock, storage, and logistics.
Comparing to say a web based e commerce site where the cost might be little more than the laptop, internet connect, and mobile phone. Perhaps cost of a domain and website.

The motivation and discipline factor are a most though, agreed there.

 

[Philip Hoyle]

Even in retail, you can start on a shoestring.

Nothing to stop you buying minimal stock and starting out on a market stall and then building it up by re-investing profits into more stock and eventually moving into a small shop on a side street, then again trading up to a larger shop in a better location.

There are also other options, such as renting space in other retail premises. In Chorley there's an old converted mill (Botany Bay) where you can rent space and you can leave your stock there without being there yourself. Customers can take your goods to the mill's own checkouts and they just take a small commission for handling and credit card costs etc. If you are there yourself, then you take the money yourself and don't pay the commission for their checkout.

It's quite common, for say, jewelry makers, artists, etc., to put their stock in shops and give the shop owner a commission for anything sold.

Barriers to entry are only there if you let them!

 

[teutonic]

What practical skills are you thinking of selling?

Hi Stretchy. I was a medical electronics engineer for 14 years. Before that an instrument technician in the semiconductor industry. It's all a bit specialised which does'nt help going solo and seeking self employment. Even so, on my practice flyer, well the first one, I thought of offering the following:

Computer services:
Data Recovery
Operating System Repair
Hardware replacement/upgrade
Network solutions
PAT testing

I then prepared a second flyer offering these further services...

Medical grade safety testing to IEC 60101-1
Legacy equipment repairs
Medical equipment movements and relocations / setup.

because I would love to find work within the medical industry.

So thats what I'm going around in circles with. Which, if any, would secure enough paid income to keep the mortgage paid ? Is there a way to offer all the services ? Should I plod around distributing my own flyers. ? Should I pay to advertise ? Should I keep hunting for a paid job instead ? I would approach personally every good contact I've made over the years.

The decisions will become more urgent as the redundacy cash slides slowly downwards over the coming months.

I am ready for my solo career. The right age, wisdom, bitter experience and qualifications, and even my own test equipment. But I cannot bring myself to take the plunge.

Looking for someone to hold my hand in truth. The proverbial safety net. But there is'nt one really in existence so ....

 

[teutonic]

Even in retail, you can start on a shoestring.

Nothing to stop you buying minimal stock and starting out on a market stall and then building it up by re-investing profits into more stock and eventually moving into a small shop on a side street, then again trading up to a larger shop in a better location.

There are also other options, such as renting space in other retail premises. In Chorley there's an old converted mill (Botany Bay) where you can rent space and you can leave your stock there without being there yourself. Customers can take your goods to the mill's own checkouts and they just take a small commission for handling and credit card costs etc. If you are there yourself, then you take the money yourself and don't pay the commission for their checkout.

It's quite common, for say, jewelry makers, artists, etc., to put their stock in shops and give the shop owner a commission for anything sold.

Barriers to entry are only there if you let them!

Most interesting info. I used to drive past the Botany Bay building on the M6 to Preston, wondered what it was all about !

 

[DarrenMcCabe]

I started this business with my business partner on a kind of shoe string. We both put in £1000 each and both left jobs with £40k/year salaries.

We used the budget purely for marketing activities and networking.

Spent a few months wondering what the hell to do to bring in business, but what we did have the confidence of knowledge of business sector, the right applications, systems and how to save companies money.

18 months later, with many a wrong turn, but more right, we now have a large selection of contract support customers and a healthy turnover too.

So yes in short, businesses can be set up on a shoe string.

 

[cjd]

Computer services:
Data Recovery
Operating System Repair
Hardware replacement/upgrade
Network solutions
PAT testing

A million people can and do do this work. Super competitive and therefore hard to get into.

I then prepared a second flyer offering these further services...

Medical grade safety testing to IEC 60101-1
Legacy equipment repairs
Medical equipment movements and relocations / setup.

because I would love to find work within the medical industry.

Much better idea; specialised and focused on an industry, so easier to target. Presumably you also have contacts that might get you started? The first few jobs are the hardest.

My concerns here would be your ability as a new sole trader to get into these places. How do they get this work done now? Who do they use? Are you up against maintenence contracts from megacorps? Are their regulatory issues?

 

[a.mart]

I'm going to be a chiche and quote Steve Jobs here:

You need a lot of passion for what you're doing because its so hard. Without passion, any rational person would give up.
So if youre not having fun doing it, if you dont absolutely love it, youre going to give up.
And thats what happens to most people, actually.
If you look at the ones that ended up being successful in the eyes of society, often times its the ones who love what they do, so they could persevere when it got really tough.
And the ones that didnt love it, quit. Because theyre sane, right?
Who would put up with this stuff if you dont love it?
So its a lot of hard work and its a lot of worrying constantly.
If you dont love it, youre going to fail.

 

[Deleted member 138423]

Mmm....., start ups with minimal investment; window cleaning, car valeting, pet walking/sitting are minimal investment but won't earn you a fortune....or will they!

Luck, timing, knowledge, foresight and the combination of many a thing would be in the mix......plenty of people have seen success in the past this way, so let's hope it still rings true for us in the future.

 

[teutonic]

A million people can and do do this work. Super competitive and therefore hard to get into.



Much better idea; specialised and focused on an industry, so easier to target. Presumably you also have contacts that might get you started? The first few jobs are the hardest.

My concerns here would be your ability as a new sole trader to get into these places. How do they get this work done now? Who do they use? Are you up against maintenence contracts from megacorps? Are their regulatory issues?

cheers cjd. Yes, everyone is a computer expert these days. And yes, the work I would be chasing in the medical industry is well catered for already.

My only chance would be scraping up the 'crumbs' of 'nuisance' work the big guys get lumbered with from time to time, usually during busy periods when its most inconvenient. I have been in touch with my old bosses
thanks to linkedin. Hopefully they might be able to help / advise.

Meanwhile the jobhunt goes on. I've signed on this week and will discuss
the extending of the enterprise allowance scheme with them and see if they think it's worth pursuing.

 

[sarahjohs]

Sure there are many business today that can start with very little money. Providing services online is one of the best businesses that could be started this way. For example- Accounting, web development,consultancy services, astrology and such.

 

[YesYouCanChange]

If you're providing a service, then it's fairly straightfowrd to setup your business, the basics are literally a laptop, phone and a place to conduct your business. You don't even have to rent premises, I know a lot of people who use Starbucks as their office!

Even if you do rent premises, there are plenty of affordable options, such as renting a desk in an existing office, virtual offices or renting a room as and when you need it. Also take full advantage of technology, it's now a lot easier to appear bigger and more credible than what you actually are through the use of clever mobile and inernet technology.

The best way to start your business, is to think of something that you love doing. If you love doing something then it won't seem like work and you'll naturally harness your powers of motivation that'll drive you business forward as helping you to keep going when the inevitbale tough times happen.

 

[Flavius Agrippa]

All the feelgood motivation stuff aside, what you need to succeed is a sustainable strategic advantage.

This is something that lets you set yourself apart from the competitors and substitutes in the market. Something that's difficult for them to replicate easily.

It could be an IP asset, like something you have patented.
It could be a great location that provides access to a ready market.
It could be a great contract with a supplier that gives you better quality materials for less than the competition can get.

Or it could be less tangible, like a quality improvement process and how you manage your client base. Keep communicating with your clients so they let you know what is important to them aside from price, and find ways to build your service to them around these aspects. Adopt a Predict - Modify - Test - Evaluate cycle to keep service improving and keep you ahead of the alternatives. This way you give clients better service and increase the risk and cost to them of switching to an alternative that does not focus on their needs.

 

[Team Leith Training]

Many moons ago, when i was under another username here, easyasIT. Some of you might remember me!

I started business wiith little more than a second hand e-machine, internet connection, a micro phone, and a DVD burner.
I proceeded to create training courses for the home PC user.

There was a little investment in the DVD's etc however by and large it did not cost much.
The reason the business failed (although i am still in training) was because i did not move swiftly enough or quick enough into marketing to sell what i had created.
I also ran out of money and needed to get back out to work.

I believe looking back it would have been smarter to have spent money more money on marketing.
Although it was not exactly a success story, that venture taught me more about business than any other. That of course plus my account and the UKBF.
I learned one other thing from the business, being self employed was what i wanted to be.

Other than that, i used to use an old pc repair kit i had from another job, invested in business cards and an advert in the local paper. I then worked freelance as a PC engineer. Made a fair bit from that too. Not enough to live on but it kept me going when the coffers were short.

There is my story to date

 

[Team Leith Training]

In addition to the above (i did not want to edit my previous post).

As i see it, provided you don't have to invest in commities, it should be possible to start up a business for peanuts. If its a service your offering, this is one such business. A few i can think of are

Copywriting (just need an internet and laptop for that)
PC Repair (to a point)
Consultancy services (where the product your selling is your knowledge)

I am sure there are more i can think of. Asides the obvious cost of marketing these businesses should cost hardly anything to setup.
I believe retail might be the costlier of business startups, unless your planning to resell on a white label basis.
However getting back to the above, with wordpress which allows you to put a decent business site up in a day along with cheap hosting. Its easy to setup.
Its getting the customers thats the hardest thing.