If you’ve had financial issues in the past, you might be wary about going ahead with a new business plan. Starting a new business can be difficult, but it has its own challenges for anyone who is short on funds. In order to be a successful business owner, you’ll need to have a good plan, find financing, and pay your employees regularly. Here are a few tips for starting a business while you’re on a budget.
Keep your personal finances in order
If you haven’t already, you should make sure that you don’t have any financial stress eating away at you. Woodson Wealth Management recommends reviewing your spending habits to help relieve some of the stress. Know all the debts you have (eg. car payments or credit card debt). Avoid spending money excessively on things you don’t need. Try to stay away from impulse buys. If you get the urge to buy something, wait a day and see if you still think it’s necessary for you to have.
Create a personal budget by listing your monthly expenses. Make sure your income sources can cover everything, and stay on top of things with automatic payments. Ditech notes that this will help you avoid late fees. Just make sure you have enough money in your account, so it doesn’t cause more problems.
Make a plan
Before you do anything, you need to create an effective budget for your business. Consider all the expenses that your business will face. Be realistic. How much will it cost to pay employees? How many employees do you need? Will you need to rent a building? What equipment or supplies do you need? If you’re planning on starting with a small amount of capital, you’ll need to keep your overhead expenses low, so you won’t be able to splurge on anything.
Instead of renting a building, you could use your home space to start. For example, if you have an extra room, you could turn this into an office. This way, you don’t have to pay rent at first. You could also take advantage of coworking spaces that don’t cost as much.
While you’re putting together a healthy budget and plan for your business, keep in mind that you’ll need to find ways to strategically advertise without breaking the bank. Know who your customer base is so you can specifically target them. And, don’t overspend on advertising that isn’t effective. If your business is local, you can get free advertising through word of mouth, so building a good reputation is one of the most important things you can do to be successful.
If you don’t have enough startup capital in savings, you’ll need to find a way to finance your business. There are several loans that you can apply for. Small Business Administration loans can reach up to $5 million. Generally, the process is slow, but the SBA Express loan program offers smaller loans and can help speed up the process. Another thing to keep in mind is that you will likely need to have good credit to qualify for a loan. If you’ve had financial issues in the past, this might be difficult for you. You can try to raise your credit score or find a different way to fund your business.
Besides loans, you can also consider crowdfunding. Crowdfunding doesn’t require that you have good credit, but you’ll need to be able to share your dream of starting a business in a way that stands out to people. You will have to do a lot of marketing to get the funding that you need, but it can be a great way to get financing for your business if you have a vision in mind.
Pay Employees Regularly
Your employees will be the powerhouse of your business. You should hire employees carefully, but before you bring anyone on board, make sure you have a payroll system in place. To keep employees happy and working hard, you should pay them on time, every time.
The easiest way to manage payroll is to invest in an affordable payroll service that offers time and project tracking from mobile devices. A payroll service makes it so you don’t have to calculate how much time your employees have worked and how much they need to be paid. You’ll also be able to check your employees’ timesheets at any time, even from your phone.
While you might be worried about starting a business if you have had financial issues in the past, you can work through by making sure you have a good plan.
This blog post was provided courtesy of Derek Goodman. Visit inbizability.com for more information about his services.