You’ve identified a gap in the market, you have an idea, but investors aren’t interested. Question: What is a cash-constrained entrepreneur to do? Answer: Shoestring.
Starting a business on a shoestring budget is becoming one of the most popular ways for entrepreneurs to launch their dream ventures. Shoestring Startups, also known as Lean or Bootstrap Startups, are based around the concept of cutting costs and eliminating waste while maximising their existing resources.
We’ve outlined some of the key considerations to take into account when starting on a shoestring below.
Managing Several Hats
When your resources are tight, you have to be willing and prepared to wear a number of different ‘hats’ and take on a variety of job roles within the business. One morning you’ll wake up as the Sales Director and by the afternoon you’ll have changed hats to the Recruitment Officer – if that sales meeting went well!
Of course time is a largely limiting factor to this, so looking for alternative and affordable options to resource your business needs and also free up the founder’s time is extremely valuable. The internet and globalisation is opening a lot of doors in this space, with websites like fiverr and airtasker providing shoestring startups with access to freelancers all over the world and a new means of managing their day to day tasks. Handing over the hat to someone else can be daunting, but if communication is clear and flows both ways you’ll likely be surprised at what you can achieve.
Get Creative with your Marketing
Marketing the business is not about throwing bucket loads of money into broad-scale advertising tactics. It’s about having a can-do attitude and creatively looking at what your objectives are before researching and leveraging the variety of new methods available to achieve them.
One of the most popular startup objectives we hear is the need for brand awareness and audience building. This is a valuable objective to achieve as having your name on more lips equates to more traffic to your site/store/office and hopefully more sales.
This objective fits well with the shoestring approach as we now have 24 hour access to a global audience via digital means. As long as you know or are willing to learn how to leverage non-traditional means of marketing and get really targeted with your approach, you’ll be able to build your brand on social media, nurture your contacts via email marketing and direct them to take an action on a website you built for free, on a platform such as WordPress – all for little or no cost! And that’s just the start! There’s a plethora of tools, information and resources available to the budget conscious entrepreneur. You just need to start looking.
Set Clear Goals, Plan and Track
With any project, it’s always critical to ensure you know why it is you started out and what you want to get out of the process. This is especially true for Shoestring Startups as the more limited the resources, the more planning needs to go into the allocation of their use. This planning needs to have your business goals front of mind to ensure every investment decision, big or small, is moving you closer to delivering on a sales promise, promoting your brand, improving your product or whatever it is that contributes to why you are in business.
The other side to this coin is tracking performance. It’s great to plan for things to work and research the chances of success, but only once you’ve commenced that activity can you truly evaluate how that translates within your unique situation and market. Tracking the success of different initiatives or investments and the return on investment will ensure you are armed with the information to abandon the activities that didn’t work and adjust your budget for those that did.
In the end, having the dexterity to focus on what you can do in and outside of your business, getting creative in your resourcing and marketing techniques and keeping your goals front of mind, will all help towards getting your startup off the ground – on a shoestring budget.