Starting a business venture can be a risky undertaking. The costs associated with setting up your organization and winning your first clients can be crippling, and if things don’t quite go to plan, the financial impact can be devastating. Or at least that’s how things used to be.
Thanks largely to the Internet, the cost of setting up a business today need not present such a risk. In fact, your initial investment could be limited to a really good idea (and they typically come for free).
New Business Strategy
If I was considering testing a new business idea today — I would start with an idea, followed by a blog, an email marketing platform (iContact has a free 30-day trial to get you started) and a couple of social media channels. Any other investment could wait until I had won my first clients.
Things to Forget
There are a number of things I wouldn’t look to invest in until my business model had proved itself. These include:
- Office Space: When you work from a laptop or, increasingly, from a smartphone, why would you need office space? Your kitchen table, local coffee shop or anywhere else with a Wi-Fi connection is a good enough place to start.
- Warehousing: If you sell physical products, you’d think owning your own warehouse would be a priority. There are a number of problems with this assumption. Warehouses are expensive, require staff and are notoriously inflexible — they are either too big or too small. The process of picking and packing is also time-consuming and expensive. You don’t make money from stuffing envelopes — so, if you really need a warehouse, I would always consider outsourcing to a specialist like Amazon (who will ship for you regardless of where sales are generated).
- Stock: The fact is, if you have the right relationships with suppliers, you don’t need to take an item into stock until you sell it. While this might not be the most profitable way of selling things (you won’t get the bulk discounts), it will enable you to test the market.
- Staff: Probably the most expensive outlay a business can make and certainly one of the more problematic. If you initially need any extra help, consider hiring “virtual” team members via freelance work exchanges before taking the plunge and adding to your payroll.
- eCommerce Platform: The problem with eCommerce platforms is, they require a hell of a lot of effort and money to drive sales through and can take a lot of time to set up. While you will undoubtedly want to run your own eCommerce channel in the long run, it is perfectly possible to test your market via ready-made online marketplaces such as eBay, Etsy or Amazon for physical products, Udemy or Skillshare for training products, Eventbrite for events or UpWork or PeoplePerHour for virtually any other service.
The great thing about approaching business like this is that the solutions are 100% flexible and you can scale up and down easily and without too much financial risk. You may even be able to start your business while in full-time employment, mitigating the risk further.
So instead of focusing on what you need to start your business, why not flip it around and think about what you don’t need?
Have you started a business on little more than a great idea? Share your comments below:
This post first appeared on the iContact Email Marketing blog.