Opening your own company is one of the most rewarding and exciting experiences that you can ever have. However, if you do not have the passion and consistency needed, it won’t be exciting for long. Moreover, there are a lot of things that you need to consider other than just having a great idea to start a low-cost business. This includes how much time you have, how much time the company will need, and the amount of money you will have to spend on it. Low-cost business ideas are primarily businesses that start from a person’s home. With this said, let us remove the guesswork on how to start a small business from home and go over what needs to be done. Keep reading!
Starting a Low-Cost Business
With the proper steps and motivation, it is easy to start your business focused on a low budget. Before we talk about the steps required to start a low-cost business, you need to have a perfect low-cost business idea ready based on your specific skillset. Here are some ideas to help you:
- Digital Marketing
- Create an app
- Self-improvement coaching
- Start a lending library of your own books
- Cloud kitchen or bakery
- Grow an audience you can monetize in many ways
- Sell homemade and handcrafted goods
- Start your own curated fashion boutique
- Turn your skill or expertise into a service. For instance, if you are a writer, you can offer content-writing services
- Sell webinars or courses
- Sell your digital creations online, such as your digital art, photography, music, and so on
- Start a customized gifting shop
- Design and sell print-on-demand items
These are just a few low-cost business ideas. You can pick up or find the one that suits you the best. If you have a much better idea, that is great too. Just be sure you have a good idea that you are passionate about.
Once you are ready, follow these steps:
#1 Do your research
The very first step to starting a low-cost business is to know what you are getting into and the process it involves. Many business advisers suggest that you should monetize what you love. What they don’t say is that you need to know if your idea is or is not a profitable one. For instance, if you love music but are not a good songwriter, producer, or singer, it is not a good business idea. Maybe you love making candles and want to sell them to people in your locality, but there are already 4 successful candle-selling shops in your locality. This is, again, not a great business idea.
Pick up an idea that you specialize in. Your idea needs to be profitable. You can also pick up an existing product and improve it. Although, if you do this, make sure that it is a product that people will want to buy.
To do this, you need to know your competitors and the market. Knowing your competition is crucial to your success. If you plan to get outside funding in the future, you will have to share the market analysis data with investors as well to get a great deal. This is the first and basic step towards a successful business. Find out what your competition is offering and create something better to intrigue the market.
Along with this, find out what the market wants and what your customers want. Take surveys and even ask your family and friends to share their suggestions on what you are working on. This will give you a better insight into what the market is looking for and how you can be successful in delivering it. From there, you can then plan your strategy and prepare your business plan.
#2 Create a business plan
Creating a business plan is the next step if you want to start a small business. It serves as the roadmap to show the step-by-step growth of your business. This document will be used in many situations, including opening a bank account, getting funding, planning your strategies for the future, etc. It will help you stay on track and make certain that you are covering all your bases. A proper business plan also helps you to determine a potential problem and find a solution. It should include the following sections:
- Executive summary: describes the business idea, its highlights, the goals, and the methods that will be used to achieve these goals.
- Company description: describes your service or product, how it solves the market problems and why this idea is the best.
- Market analysis: describes the competitors, the target market, growth rate, market size, segmentation analysis, trends, and a competitive environment assessment.
- Organization and structure: describes the organization type, the risk management strategies to follow, staff management, team, everyone’s roles, etc.
- Goals and missions: describes the mission statement and goals that the business wishes to achieve. It also shares the steps that the business will take to get there.
- Services/products: describes how the business will operate, which includes the services and products you are offering, the costs, comparison with the competitors, who will handle the creation of the product, the materials needed and where to get them, and how much will be spent on creating the product or offering the service.
- Background summary: describes all the trends that can positively and negatively affect your business or industry.
- Marketing plan: identifies the characteristics of your service or product and shares how you will promote it. It also includes the amount of money you will need for marketing and how long the campaign will last.
- Financial plan: describes the proposed budget with projected financial statements. It should include the balance sheet, income statement, and cash flow statements for the next 5 years. This section is very important if you are hoping to get outside funding. Use a free invoice generator to ensure that you have proof that you are recording any payments made by you or your clients to you.
Other than this, it is a great idea to also come up with an exit strategy, just in case. It helps you get the most value out of your company in case you decide to sell it.
#3 Register your business
With the first two steps done, the next step to start a low-cost business is to register it. Begin by selecting the business structure for the company. There are many structures that you can choose from based on your business goals. Some of the most common business structures include LLC, Sole Proprietorship, and Corporation. Choose the one that best fits your needs. Once selected, choose a business name that has not been used and that follows the rules of the state in which you are about to register your business.
When choosing your company’s name, keep in mind that there are words that you cannot use in it. Moreover, you will also have to include the business structure type in its name. For instance, you can select a business name ABC, and if you are planning to open it as an LLC, you need to keep its name as ABC LLC. Once you have the business name ready, file the registration to form the company. To register for a business, you will need a registered agent who lives in that state, and it cannot be you. The best way to go about this is by hiring a professional service to handle it for you.
IncParadise offers registration and registered agent services. Our team will manage everything for you while you focus on other things to start your low-cost business. Once you have registered your business, you will get the Business Registration certificate from the government agency. The next step is to apply for any required licenses with the district, state, and federal government. For instance, if you are about to sell liquor, you might need to get a liquor license and the sale license. Along with this, you will also have to get a tax identification number (TIN) and open a business bank account to keep it separate from your personal account.
In short, you will need to get the following things done:
- Choose an unused business name
- Register your business – after getting a registered agent
- Apply for permits and licenses to run the business
- Apply for an EIN (employer identification number) or TIN (tax identification number). An EIN is needed if you are going to hire employees; otherwise, you can use a TIN.
- Open a business bank account.
- Choose the proper bookkeeping and accounting software, or hire a professional. It is always better to hire a professional to avoid any mistakes.
#4 Keep your overhead low to start
With the business plan, you know how much you will need to start running your business. In the initial stages, after you start a small business, it is always a good idea to keep the expenses low. If possible, try to use a home office and start with contractors instead of employees. For instance, you can hire IncParadise for the bookkeeping and accounting tasks instead of spending a lot and hiring an employee to do it for you. Keep everything in check until and unless the business doesn’t start making profits. Once your company starts to make profits, you can then use it to grow the business. But before that, keep your hand tight in spending on things that are not initially necessary for the business.
#5 Use mail forwarding
While you try to save money in the initial stages after you start your small business, you might choose to open your office at your home. Having a business at home means that all your mail will be forwarded there. This means that your house can get flooded with unwanted mail. It can also be distracting as you have to manage everything for your business. It is better to hire a mail forwarding service to avoid these situations and make the best out of your business.
The company that offers this service will add their address for all your mail to be sent to. The address you get from the mail forwarding service is usually an address in a high-profile area. This gives your business an excellent professional look. All your business mail, including legal mail, will be forwarded to this address, and the team will keep them for you. You can ask the team to scan the mail and send them to your email. You also have the option to choose which mail you want to receive and which you would like to have disposed of. With this said, IncParadise offers a mail forwarding service at a great rate. Contact us to learn more!
#6 Market yourself effectively
While you effectively try to save in the initial stages of starting your small business, remember to keep a bit of capital for marketing. Without marketing, you will be less likely to gain customers. Create a website where people can reach out to you and learn more about your product/services easily. Optimize the website for SEO because it will help customers find you on search engines.
Create and continuously share relevant content to bring in more customers and let them know what you are offering. Set up social media profiles and be consistent in posting relevant daily content. All this will help you reach out to your audience and will help your business sales grow. So, spend plenty of time and money on your marketing strategy as well.
#7 Set realistic goals and track your progress
One thing people forget after they start their small business is setting the right type of goals. There are two kinds of goals you need to have – short-term goals and long-term goals. Both of these should be realistic and not something that is unachievable or something that will need magic to achieve. For example, you cannot set a goal to earn $1 billion within a year by just selling t-shirts. It is just not possible, especially if you just started and don’t have a team yet. Be certain that your goals are reachable and real. Moreover, keep track of every step you take. It is crucial to track your process as it helps you in planning your next step.
#8 Don’t give up
It is common for people to give up after a while if things do not work out as they planned. This is one of the reasons why many businesses end up failing. If things are not working out for you, do not give up. Adjust your strategy and keep going. The stories of overnight success are not true; they only make for a good headline. No company has ever become successful overnight. It takes a lot of effort and consistency to reach that point. Focus on the journey, if something doesn’t work for you, change it, but do not quit.
Need expert assistance in starting your small business?
If you want to start a small business, it will take time, perseverance, and effort. If you are ready to put in all the work needed to achieve your goals and dreams, then you’re on the right track. No business idea is successful without these things, even if it costs almost nothing to set up. Make sure that you do all the research needed, have a solid business plan, and go with the flow. With all this, do not forget to register your business as well. IncParadise can help you with this. Our services include company registration, incorporation, mail forwarding services, registered agent services, and every other service to help you start your company and run it. Contact us to know more today!