Starting Up On A Budget

[Henry Osadzinski]

We've seen some brilliant responses to the Starting a business on a shoe string thread and, following on from all of your great advice and comments, the UKBF and BusinessZone team are putting together some resources to help show others the best advice and information from the forums when it comes to the early days of building a new startup. Please do take a second to choose an answer from the poll above . If you have a minute (that's all the time it will take), we've also put together a quick survey to find out more about the challenges and successes that people encounter in their first year. The survey will run until Thursday (Nov 1st) afternoon and we'll publish the results soon after

Edit: The poll is now closed - thanks to everyone who contributed!

Thanks!

 

[Chris Ashdown]

£5000 totally unrealistic for most companies apart from back bedroom boys using Amazon or ebay

 

[Henry Osadzinski]

Good point Chris - we've updated the question to make it a bit clearer & more realistic. If you've already answered and want to change your response, just let us know and we'll make sure it's all right

 

[alanb]

As a business adviser, mentor and trainer helping businesses for 20 years+ I have found that most businesses that I help who have problems have been under financed from day one. It's not lack of sales that kills businesses but lack of cash.

The news that the UK GDP figures are hinting that we are comming out of the recession is a concern. More businesses fail coming out of a recession than at the height. This is because they run out of cash funding the increase in sales. More stock, materials and staff costs/overtime has to be paid for and these underfunded businesses have used up cash reserves surviving.

Alan Briggs

 

[WrightPsychology]

We offer services from my own knowledge in psychology. So >100 really, mainly for a website.

 

[OldWelshGuy]

Mine was desktop published, using existing equipment, and never meant to be a business. so I voted nothing. That said in reality the computer cost a chunk, but it wasn't for business use at the time.

I agree with the 'underfunding ' thing, and whenever I am asked what is the single most important piece of advice I would give to a new business, it is 'keep the monthly outgoings as low as possible' because it is almost always cashflow that kills a business, profitability is meaningless if you can't get the cash through the business on time.

 

[cleaningltd]

£5000 totally unrealistic for most companies apart from back bedroom boys using Amazon or ebay

Even that costs more, as you will need monster servers to run the script on.

 

[anoaonline]

it depends in what kind of business you are involved.
In design and manufacturing £5000 would not make a dent.

My bank manger told me that she has seen a lot of excellent business ideas
and a lot failed through lack of adequate funding.
In ecommerce retail £5000 should be quite adequate

 

[Croftswindon]

I'm just starting up, I ticked upto £500 but so far spent less than £50, domain name etc. Just contemplating business cards against app to attend a networking event. But by spending nothing you achieve nothing, need to promote my business and this will cost in some shape or form, just deciding the most cost effective not necessarily cheapest routes to take. I am a bookkeeper so already have printer, laptop, blackberry etc, will purchase SaaS accounts package pay as you go and register with HMRC (cheek having to pay!), when necessary.

 

[MrsPWN]

I had a start up grant of £1000 and had to match that. As far as cash flow goes all my sales are pro forma so it's not too much of a problem.

 

[businessfunding]

As a business adviser, mentor and trainer helping businesses for 20 years+ I have found that most businesses that I help who have problems have been under financed from day one. It's not lack of sales that kills businesses but lack of cash.

The news that the UK GDP figures are hinting that we are comming out of the recession is a concern. More businesses fail coming out of a recession than at the height. This is because they run out of cash funding the increase in sales. More stock, materials and staff costs/overtime has to be paid for and these underfunded businesses have used up cash reserves surviving.

Alan Briggs

I agree that many are under-funded but this is often surmountable if the business owners lower their expectations and look at stepping stones to the start point rather than expecting to set up running, all guns blazing. (the most extreme example I've seen of this was a recent graduate seeking a loan for a business including freehold premises because he didn't want to rent.)

Many established businesses are now running very lean and juggling cash (sometimes with remarkable efficiency) which is an opportunity for start ups.

 

[Croftswindon]

The other point I meant to make is, it is not necessarily the cost of setting up a business that is the problem but being able to survive in the meantime. How many time do they say on Dragon's Den 'you expect ME to pay your wages?' as if needing to buy food to eat is something bizarre.

I am lucky I have a partner who earns enough to keep both of us; even if the kitchen cupboards are full of 'basics' tins!

 

[Deleted member 138423]

My advice is to get as much as possible to start with then spend as little as possible trying to get the money coming back in!

Stack it high and sell it cheap means lots of money and cashflow. Buy it low and sell it high however gives you far more buffer and profit in the early days of start up.

Amazon and Ebay are great if you have £20k plus worth of stock spread about if you don't mind paying the 15% fees, but to start with, you'll need more than you know to start selling on there and make a decent profit ( I'm talking in excess of 40% ).

Buying and selling is within the realms of this thread upto £5k, but not really for a great deal more - internetty things included btw!

 

[Henry Osadzinski]

Thanks for your input, everyone We've got the results from the poll and survey and are going through everything now. Watch this space for some interesting data based on what you've said!

 

[AlisonPF]

We know that starting a business can be expensive so to help a little we allow our customers to pay for their website monthly and it's only £6. What's more, if the business doesn't work out we do not tie them in to any contract so there's no risk.
If you are starting a business and have a tight budget please look at our website

PageFlavour

 

[Henry Osadzinski]

Update - just wanted to let everyone who took part know that we've put an infographic up detailing all of the answers we received

You can find it here - http://www.ukbusinessforums.co.uk/forums/showthread.php?t=277028