When you work for an employer, your hard work benefits the company’s bottom line, not your own. If you work long hours to pull off a project on an impossibly tight deadline, there’s no guarantee you’ll get a raise or even get recognized for your contribution. That is why becoming an entrepreneur and starting your own business is so important; your dedication and persistence can give you financial independence, security and greater creativity than you could ever have working for someone else.
However, starting a business has always been cost prohibitive, making would-be entrepreneurs reconsider their ventures. But from changes in the loan industry to new forms of marketing, it is possible to launch a successful venture on a shoestring budget.
Alternative Sources of Funding
As a young entrepreneur, there are obstacles you will have to overcome professionally and personally. Gaining funds for your business, particularly if you do not have good credit or are carrying hefty student loan debt, is one of the toughest challenges you’ll face in launching your enterprise. You might have the greatest idea for a product or service and great customer demand, but without startup funds, you are stuck.
Traditional bank loans can be hard to secure just starting, and loans through the Small Business Administration (SBA) are increasingly competitive. In 2015, the SBA’s (7) a program, it is largest funding initiative, actually ran out of funds halfway through the year due to the deluge of applicants. The growing number of strong candidates means it is difficult to get SBA loans even when they are available.
Thankfully for young professionals, technology, and the internet has made old school banking unnecessary. It is possible to launch a new business without significant cash flow, even if you do not have great credit or a lengthy credit history. Entrepreneurs have access to options now that previous generations did not. Here are the top ways to get the funds you need to launch your business:
Online services like Kabbage and Lendr are a quick alternative to traditional loans; rather than months for your application to be processed, online lenders review your application and transfer funds in just days. They also tend to be more flexible in the types of applications they approve.
Peer to Peer Lending
Peer to peer lending is a growing industry, where entrepreneurs can secure loans from individuals on sites like LendingTree or Prosper. Investors review your goals and business idea and give you a loan, with interest rates varying depending on your determined credit risk. Even people with bad credit can usually get the loan they need to build their business if they are willing to take on stricter terms.
When you have an exciting idea, people are eager to bring it to market quickly so they can start enjoying your product or service. Individuals can contribute small amounts to help you launch your business; some platforms like Kickstarter allow you to give investors rewards or samples, while others require you to give up a share of your business. This process can be an excellent way to build the funds you need and grow your audience.
New Forms of Marketing
Previously, you needed a serious marketing budget to get your products or services in front of potential customers. From billboards to the newspaper, advertising was an expensive venture.
But with the growth of social media and easy-to-use platforms, marketing can be done cheaply. You can create a professional-looking website for as little $20 with a custom domain and launch Twitter, Facebook or SnapChat channels to promote your services and engage with customers.
Social media advertising and Google AdWords allows you to target your marketing efforts to a very specific niche demographic, down to the exact location and age group you want to reach. You can run campaigns for as little as $5 and stop and start them whenever you want. This approach allows you to try out different strategies until you find what works for you.
Social media influencers can be invaluable tools as well. Giving bloggers or social media personalities free samples or trials can get you incredible exposure if they use and review your products. With some writers, you can ask them to do a sponsored post on their sites, reaching their loyal and extensive audience base. Because they have built so much credibility and trust with their followers, a sponsored post on their site can get your significant traction.
Inexpensive Legal Help
Forget hiring a lawyer or bringing on a legal consultant; online legal services make it possible to handle the legal side of your business cheaply and efficiently. For instance, with LegalZoom, you can incorporate your business, reserve a “Doing Business As” name and even get your business license online; most services cost are one-time fees starting around $79.
Gone are the days when you needed to rent office space or a storefront to get customers. As long as you have a laptop and decent internet, you can run your business, sell products and engage with consumers. With virtual meetings software, you can hold video teleconferences and get face time with clients and freelancers, no matter where they are in the country. Without the overhead cost of physical office space, you need less money to make your business success.
Even for those who need an office, you do not need to rent a whole building. Co-working spaces are increasingly popular, with common work areas available for employees to share popping up all over the country. They can be a budget-friendly way to have a designated work area outside of your home.
As the economy continues to shift towards technology and mobility-based approaches, it is easier than ever to launch a business without much money. Companies are created and are selling products with as little as $100 invested; cost is no longer a barrier to being an entrepreneur. With so many options available to you to make running a business more straightforward and less expensive, you can turn your good idea into a profitable enterprise without waiting around for a big business loan.