Starting a business on a shoe string
Starting a business on a shoe string
I recently received an email from a Mum who is very keen to start a business, but found funding is a problem.Question:
I would like to start a business and work from home. Unfortunately my budget is rather tight I have little money left over to start a business. Can you please provide me with any advice on how I can start a business on a shoestring. (Name withheld).
Show Mummy the Money - Our Reply:
This is an extremely common problem, faced by many budding entrepreneurs. Naturally I cannot surpass the opportunity to give Show Mummy the Money a plug, the subject of “How to Fund a Business” is covered in detail in Show Mummy the Money. There are ways around funding a business without directly dipping into your own hip pocket. Often the solution is simply a matter of thinking out side the square. You need to take into account any and all relevant cost effective opportunities to establish a business, such as using Ebay, applying for government grants, securing sponsors with a vested interest… I would like to propose the following suggestions:
Selling on EBay as a intermediary.
It is possible to start a business with very little funding by selling as an intermediary on Ebay. Selling as an intermediary involves acting as the “middleman”, selling products on behalf of a selected supplier through Ebay. You will need to source and create a relationship with an appropriate supplier. Depending on the arrangement you make with the supplier, the supplier will generally stock and distribute the product. The supplier receives your notification of a sale and sends the item directly to the customer on your behalf. In essence the main role you will play in this business model is the master of cash flow. You would be responsible for ensuring customers make payment and the supplier is also paid.
With this business model you won’t need to hold stock, this can be a significant capital expense when first starting a business. This is an appealing feature of this business model. Furthermore you don’t have to worry about packaging and distribution of the product this can be a time consuming task for any business. Finally this business can be set up with relatively very little capital expenses, anyone can set up an online store on Ebay and it has a worldwide reach.
Naturally it will take some time to source and secure a supplier. Ideally you will need to do your own research and develop a sound appreciation for which products sell well on Ebay and those that don’t. To find an appropriate supplier you might like to try Googling “wholesalers” and or the “product name”.
I personally know this business model works, I know of one stay at home Dad who has recently launched his own business using this business model www.estore247.com.au.
Naturally it will take some time to source and secure a supplier. Ideally you will need to do your own research and develop a sound appreciation for which products sell well on Ebay and those that don’t. To find an appropriate supplier you might like to try Googling “wholesalers” and or the “product name”.
I personally know this business model works, I know of one stay at home Dad who has recently launched his own business using this business model www.estore247.com.au.
Other ways to start a business using little funding:
Consider specialising in a service, where manpower is central to the service. If your business relies upon the supply of labour of which you personally can contribute, then overheads and start up costs are lessoned.
Start small and organically grow your business.
Consider starting a business based on selling stock on consignment – some suppliers are willing to provide stock of which you pay for, as you sell the stock. You will need to find suppliers who are happy to enter into such an arrangement. Smaller businesses would be more likely to agree to this relationship.
Consider the business you would like to start in terms of who would provide sponorship, the much needed funding to get started. Many large corporations are quite happy to pay for promotional opportunities, if you can demonstrate your business concept provides a viable promtional opportunity a corporation and or association they may well provide the funds to get you started. I recently spoke with a Mum who indicated she was very interested in business consulting particularly as she had experience in this field. She further explained one main problem with her idea centred on the target market, who were unable to adequately compensate her for her expertise. I suggested, rather than look to the target market for payment, consider who would be interested in sponsoring her to speak to her target market of small businesses. Who would also serve to benefit, from her association with this target market, businesses such as, financial planners, government organizations, businesses servicing the same target market. I too could have implemented this strategy with Show Mummy the Money, I could have approached many major corporations and proposed; I would happily promote their business throughout the book, in exchange for funding to pay for production costs of the book. If you decide to approach a number of corporations for funding, please bare in mind it will take time. Whilst it is certainly possible to secure funding through large corporate businesses I know of a number of businesses who have started out this way, it will take time. This was the main reason I didn’t pursue this avenue to fund Show Mummy the Money.
Finally consider what grants and government subsidies exist. You may well be able to come up with an idea, which would qualify for one of the grants or funding arrangements provided, by your state government or local council. The federal government has established a site listing a range of funding opportunities, www.grantslink.gov.au . I encourage you to visit the site and see whats available, you never know it may well just give you the idea your looking for.
Funding need not come directly from your pocket. Take time to consider other creative possibilities – you will be surprised with what you can come up with, once you remove the constrained thinking funding has to come from within.
Consider the business you would like to start in terms of who would provide sponorship, the much needed funding to get started. Many large corporations are quite happy to pay for promotional opportunities, if you can demonstrate your business concept provides a viable promtional opportunity a corporation and or association they may well provide the funds to get you started. I recently spoke with a Mum who indicated she was very interested in business consulting particularly as she had experience in this field. She further explained one main problem with her idea centred on the target market, who were unable to adequately compensate her for her expertise. I suggested, rather than look to the target market for payment, consider who would be interested in sponsoring her to speak to her target market of small businesses. Who would also serve to benefit, from her association with this target market, businesses such as, financial planners, government organizations, businesses servicing the same target market. I too could have implemented this strategy with Show Mummy the Money, I could have approached many major corporations and proposed; I would happily promote their business throughout the book, in exchange for funding to pay for production costs of the book. If you decide to approach a number of corporations for funding, please bare in mind it will take time. Whilst it is certainly possible to secure funding through large corporate businesses I know of a number of businesses who have started out this way, it will take time. This was the main reason I didn’t pursue this avenue to fund Show Mummy the Money.
Finally consider what grants and government subsidies exist. You may well be able to come up with an idea, which would qualify for one of the grants or funding arrangements provided, by your state government or local council. The federal government has established a site listing a range of funding opportunities, www.grantslink.gov.au . I encourage you to visit the site and see whats available, you never know it may well just give you the idea your looking for.
Funding need not come directly from your pocket. Take time to consider other creative possibilities – you will be surprised with what you can come up with, once you remove the constrained thinking funding has to come from within.
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