Think you need thousands of dollars to start your own business? Think again. You could be launching your own company for less than it costs to eat dinner out.
TV shows like Shark Tank would have you believe every growing business needs big-ticket benefactors with bottomless checkbooks to succeed. But in The $100 Startup, author Chris Guillebeau upends that belief, profiling successful entrepreneurs who have followed their dreams on a shoestring budget. One businessman featured in the book started his media production company after spending just $2500 on a camera; today, his clients are Nobel Prize winners, making him enough to cover that initial investment many times over. Another couple launched their consulting firm for just $125; now, they’re netting more than $75,000 a year. Of the 1,500 startup stories Guillebeau collected for the book, the average cost to launch each business was only $610.60 — not an insignificant amount, but hardly a fortune.
That doesn’t mean borrowing money is always a bad idea, Guillebeau explains. “It just means that borrowing is no longer essential. Don’t think of it as a necessary evil; think of it as an undesirable option to be pursued only if you have a way to limit risk or are sure you know what you’re doing.”
Here are some other tried and true tips Guillebeau has learned for turning a profit:
Websites like Kickstarter and Indiegogo make it easy for entrepreneurs to crowdfund their business, soliciting small investments to complete projects or launch new services. Folks who donate their funds usually expect to receive some sort of compensation, typically in the form of small trinkets or another form of acknowledgement, but it’s a small price for what you’re getting. Guillebeau also points out an important benefit to crowdfunding that often gets overlooked: the process generates interest in what you’re about to offer, and an impressive opt-in could impress potential investors.
“What your time is worth is a complete subjective matter,” Guillebeau writes, so don’t look to the actual cost of an item or a service when deciding how to price it. Instead, determine your price based on the benefit that consumers are getting from your product. Don’t let customers haggle you down so low that your profits dwindle.
Cold-calling investors and asking them to donate millions of dollars to your latest enterprise can be intimidating, and for entrepreneurs just starting out, it’s also unnecessary. You might only need $50 or $100 for a new computer program or a website. And we all have access to friends (and friends of friends) with unique skills who are willing to help us out. See if you can ferret out an acquaintance to help you launch that website or a friend to borrow a camera from. Not only will it be cheaper than turning to an outside professional, you’ll be building a connection that could blossom into something bigger in the future.