How to Open a Small Business on a Budget

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Originally Posted On: https://thehearup.com/how-to-open-a-small-business-on-a-budget/41906/

The U.S. Small Business Administration believes that most microbusinesses cost around $3,000 to start, and home-based businesses can cost between $2,000 to $5,000 to start.

Every business has different financing needs, so it’s important to estimate fixed costs and possible prices beforehand.

You can open a small business on a limited budget with the right expense plan in place. To help you come up with an accurate number, you need to know what starting a business requires. Keep reading to learn the steps to take.

Write a Business Plan

If you want to open a small business, you should already have an idea of what that business will be. Creating a business plan can help you map out your ideas. A great plan will include these key concepts:

• Business description
• Business model
• Market research
• Products or services offered
• Logistics and operation plans
• Marketing strategy
• Financial plan

To start a business on a budget, you’re going to need some outside help. A detailed business plan can help you secure business funding from banks and investors.

Join a Community

The knowledge and advice you receive from a small business owner community cannot be matched. When starting a business, find a community of self-made individuals to help you through the process.

You can find entrepreneurs like yourself by:

• Signing up for small business conferences
• Attending networking events
• Joining online networking groups

Within the community, look for a business mentor. A lot of seasoned owners are willing to share their knowledge with new entrepreneurs looking for guidance.

Decide on a Business Name

Trademarking a business name is going to require some funding. This is not something you can just gloss over when opening a business, so make sure your budget accounts for these fees.

A great name is recognizable and catchy, but it can be difficult to come up with something that isn’t already taken. Do your research and think hard about a name that offers future scalability.

Trademark your business name by applying through the USPTO. Secure social media handles and domain names that match your business as well.

File Registration Documents

Register your small business with the government to increase your personal liability protection and reap tax benefits. In some states, registration is required.

Registration documents likely ask for:

• Business name
• Name of registered agent
• Location

If you are registering for trademark protection or tax-exempt status, you’ll need to register your business with the federal government.

Create Brand Guidelines

Specific brand guidelines will help your business become recognizable through all marketing mediums. Building a brand involves naming your business and creating a great logo.

Dive further into your brand style guidelines by creating:

• Brand story
• Brand values
• Brand mission statement
• Brand aesthetic (color palettes and fonts)
• Photography style
• Brand voice and tone

Consistency in your branding is essential for customer acquisition and retention.

Since this is the beginning of your business, don’t get too attached to your first set of brand guidelines. You might find that you need to change things up to attract customers and grow in the future.

Build a Website

Although you can create a website yourself, it’s best to allocate some of your budget to hiring a professional. A website acts as the foundation of your business.

Seek help from a digital agency that has experience working with small businesses. These professionals will understand your needs and make a great website based on your budgeting requirements.

Some startups try to run their business solely on social media. While this can work, potential customers are going to do their research to decide if you are a trustworthy company. Without a website, customers won’t feel as great about your brand.

A website acts as a hub to sell products, post content, and attract visitors from marketing efforts. Websites are a great way to increase your online visibility and establish yourself as a high-ranking brand.

You can gain organic traffic on your website by utilizing the best search engine optimization (SEO) tactics.

A full website with professional features can be a low-cost monthly payment depending on your website host.

Source Funding

Applying for small business loans, running crowdfunding campaigns, and finding angel investors are all popular ways to fund your startup. Many small businesses fail because of cash flow problems, so it’s important to budget from the beginning.

If you need extra startup capital, consider the traditional options for funding your business venture, as well as capital investors and small business grants.

Small business grants are more difficult to come by and you may have to meet certain qualifications. Grants are something you’ll want to look into regardless because they don’t need to be paid back.

Make sure you have enough funding to start your business and maintain it. Smart business owners invest in management software to help them streamline their business operations.

For example, if you plan on opening a salon, Salon Biz salon management software can help you succeed.

Choose a Business Structure

Your business structure could impact how your business does taxes. When you are on a budget as a startup business owner, it’s important to get this detail right.

These are the most popular business structures:

• Sole proprietorship
• Partnership
• Limited liability company (LLC)
• Corporation

A sole proprietorship is the most common option for people who own businesses alone. LLCs might be the most beneficial tax-wise and offer operational flexibility.

After registering your business with a business structure, apply for an employer identification number (EIN). The IRS will provide you with this number so you can file business taxes.

Open a Small Business With These Steps

Many small business owners start with little money, and you can too! By following these steps and seeking funding aid, you can open a small business of your own.

Startup costs vary depending on the type of business you want to open. Carefully budget your expenses ahead of time to know how much money to ask for or raise.

For more articles that can help new business owners like you, check out the other posts on our blog.