Following the recent surge in self-employment, small businesses have been popping up like wildflowers around the globe.
Did you know small businesses create 64 percent of new job openings annually?
So, what if your business lacks unlimited capital? That doesn’t mean you can’t plan for ongoing and future financial growth. Limited funds do not have to be the death knell of your business. Many before you have successfully tackled the same issue. Remember that corporate-scale businesses are a post-industrial revolution concept. Before that, countless people throughout history started and maintained their small businesses without access to unlimited funds.
According to a 2015 study, many small businesses consider limited capital their biggest challenge. The study also shows that 27 percent of business operators could not access the funds needed to run their businesses. At the same time, 29 percent of small businesses failed because they ran out of cash. Data also shows that 82 percent of small businesses fail because of cash flow issues.
Seems daunting, doesn’t it?
Don’t fret! You can make your dream business a reality, even with limited capital! You read that right. All you must do is read on to learn how to manage your finances effectively to make your small business a success, even with seemingly inadequate funds.
Embrace the Lean Business Model
The lean business model will help you survive on a low budget in the entrepreneurial world. Cut costs wherever you can and stay laser-focused on essential aspects of your business. Master the art of bootstrapping.
Always maintain a successful image in every customer-facing area of your business. The back office does not require the same protocol.
Keep your setup as low maintenance as possible. One efficient solution is to work from a dynamic co-working space such as The Executive Center – Asia’s third largest co-working facility. You can project a polished image to clients without the hefty price tag by operating from a prestigious address.
Co-working spaces allow small businesses access to well-equipped offices, meeting rooms, and all the cutting-edge technology they may need. They also foster a collaborative environment for like-minded individuals to share ideas and expertise and grow their network. After all, nothing benefits a small business more than a strong network.
By working from a co-working space, your business doesn’t just open doors to new opportunities, a growing network, potential partnerships, and clients; but also eliminates the burden of expensive leases, infrastructure, and maintenance costs. All this is a perfect package for small business owners starting with limited capital.
Stick to Your Core Business
You will often find big companies trying to expand and grow through acquisition. The aim behind these expansions is to diversify their product line, innovate and bring in new customers. However, this doesn’t always work out, especially for unestablished businesses.
Big businesses also often sell assets to return to their core business. Hence, the risk factors associated with expanding the product line are a red light for small businesses. Therefore, please don’t try your luck at this since you can’t afford to lose crucial capital. By venturing into unrelated or peripheral territories, you will deviate from your primary strengths and objectives. Simply put, you don’t have the money to support these expansions. So, remember to stick to your core business. Commit to delivering your core products and services most effectively and efficiently as possible.
By concentrating on core strengths, you can build and maintain a competitive edge in the market. Become experts in your primary field rather than having a little of everything. This will allow for more efficient resource management, give you clarity of purpose, build a brand identity, save resources, and provide long-term sustainability, as companies that consistently deliver value in their primary areas are more likely to withstand in the long run. Figure out the right balance between staying focused and finding innovation.
Leverage the Power of Digital Marketing
Marketing done the right way allows you to save significant money.
Plunge into today’s ever-growing online presence, which is no longer just an option but mandatory for substantial growth. With the appropriate skill set, you won’t have to shell out a truckload of cash to develop an effective online marketing campaign.
A strong social media presence, search engine optimization, email marketing, and content marketing are great ways to organically reach your target audience. Regular engagement with your audience and followers, responding to feedback and queries, and creating authentic content can build lasting customer relations.
You don’t need to hire actual staff to meet all your human resource requirements. In fact, for a lean setup like this, hiring full-time staff for all your business activities will cost you a limb and is, quite frankly, not necessary.
Outsource as much as you can. Build a strong network for good offers. This is where your strong social media presence and a reputable co-working space come in handy. According to FreshBooks, 66 percent of small businesses are willing to outsource services to other small businesses.
Hiring full-time will incur unnecessary expenses such as tax costs, healthcare costs, employee payroll, and other legally mandatory benefits.
Strategical Collaborations and Smart Negotiations
In the small business world, every penny counts. Learn to negotiate favorable terms with suppliers, vendors, and service providers. Look for bulk discounts or extended payment plans, and don’t hesitate to haggle.
You’ll be surprised to find the number of complementary businesses offering collaborations. Good partnerships and collaborations will increase your reach and credibility and lead to mutually beneficial projects.
Despite everything discussed above, don’t forget to indulge in a culture of continuous learning and creativity. Empower your employees to contribute their ideas for innovation that does not make you break your budget. As your team grows and matures, your business will become more equipped to tackle challenges and setbacks head-on.
Making your small business thrive on a low budget is undoubtedly a grueling task – but not impossible. The right skillset and sound decisions can go a long way.
Success doesn’t happen overnight. Consistency is key. So learn to be patient and dedicated. Use your resources wisely and learn the art of adapting to whatever life throws at you.