Looking for low-risk, low-cost ways to start a small business? We’ve compiled some tips to help you launch your new endeavor! If you’re interested in venturing into business ownership but aren’t looking to risk it all, check out the advice and inspiration in our guide below.
Research Businesses with Low Startup Costs
What’s the best small business to start? There are a lot of options depending on your background and interests, which is why it’s good to do some research beforehand. As a general rule, the lower the cost to start, the better. Not only does putting in less money lower the risk, but it also gives you the freedom to experiment and see what works. Whether you dream of running a business in your home, working online, or starting an on-the-go service, there are plenty of ways you can start a business—even some you can start for less than $100!
Take Inventory of Your Skills & Passions
If you’re looking to start a low-risk business, you’ll obviously want to take stock of where there’s a need or opportunity in terms of goods or services that people want but don’t have. At the same time, you’ll also want to do something you love or that excites you! Before jumping into a new endeavor, take some time to reflect on what you’re good at and what you enjoy doing.
Test It Out as a Side Hustle
Don’t give up your day job just yet! Spending some time getting things going on the side is a great small business idea because it gives you some financial freedom and peace of mind. It also give you time to see just how passionate you really are and do any extra research before giving up a regular paycheck.
Write a Business Plan
After determining the direction you want to go, put your ideas down on paper! This is an important step in starting your own business, as it will give you direction and a general timeframe. Answer important questions like what you hope to achieve, actionable steps to make it happen, and how you plan to grow, in addition to outlining these points:
- Choose a name
- Determine a solo ownership vs. investors/partners
- Analyze competition
- Detail your competitive advantage
- Include potential revenue streams & funding opportunities
- Highlight key dates
Get Started at Home
While your dream may be to have an office with a view, working from home is a helpful small business tip for those just starting out. Again, this lowers risk and startup costs since you won’t be locked into paying for an office space. Some home business ideas with low startup costs include:
- Virtual assistant
- Home daycare
- Data entry
- Artisan maker
Launch a Website
When starting a small business, you need as much visibility as possible, which means getting your website up and running quickly should be a priority. Finding a website builder with active support, choosing a good content management system, and making design engaging are just few important tips for building a small business website.
Sell Goods on Etsy First
While you’ll want to have your own website up to build awareness, developing your own e-commerce platform is a different story. If you’re a crafter, designer, or running a business that sells retail items, test your new business idea on Etsy and similar sites first. Not only will this save on upfront expenses, but it will also help you get better idea of demand, trends in sales, and help you work out inventory and shipping needs.
Make the Most of Storage
Is your home overflowing with inventory and paperwork, thanks to your new business? Even if you’re starting to feel like you’ve outgrown your home office, it still might not be time to invest in a brick-and-mortar storefront. Finding a convenient self storage option in your area is one way to buy yourself some time before investing in an office or warehouse. Need inspiration? See how using self storage gave Stacie Lucas more space for life and her sustainable clothing business.
Build Your Team Slowly
Whether you’re starting a business with no money or have a team of investors behind you, be sure to only add people to your team when they’re absolutely necessary. This will help you keep more funds liquid, make decisions quickly, and ensure that people aren’t relying on a salary that might be there one month and gone the next. As your endeavor expands, consider hiring freelancers, bartering or trading with friends, or taking on hourly or part-time employees first.
Get Paid Upfront
Though it won’t always be an option for certain business models, some of the best businesses to start will allow you to get paid upfront. If you’re working a lump-sum job or one where you’re being paid for a service you’re providing, protect your time and resources by getting paid upfront—even if it’s just a partial payment. Obviously, this isn’t an option for everyone, but if it’s appropriate, and you have the chance to ask for payment upfront, get a leg up on your small business by increasing cash flow.
Don’t Spend Unnecessarily
One thing the most successful small businesses have in common is not spending money on things they don’t really need. Buying new equipment and furniture for your office, paying an agency a premium rate to design your logo, ordering high-end business cards, and getting top-of-the-line software are all things that are unnecessary in the early phases of business development. Avoid the common mistake of overspending and keep startup costs low by only investing in things that are crucial or that can help you see a large return on investment.
Build Your Brand
Focusing on name recognition with your small business is helpful in building a base of loyal customers who can help your launch efforts. One way to do this is by getting involved in your local community. Another way to build recognition and awareness on a budget is by making the most of social media platforms. If you’re not sure where to get started, check out these ten social tips for small businesses.
Need somewhere to store small business items while getting started? Extra Space Storage has convenient storage locations across the U.S. that can help. Find self storage near you!