Start up a business on a budget

Digital tools have made it possible to start some businesses with relatively little upfront investment. But keeping initial costs low still requires careful decisions about what you actually need.

You also have to be wise about your spending. One mistake new business owners can make is investing in the trappings of business without considering what return they are likely to get on that investment (ROI).

Do you really need compliment slips and fancy stationery? Or maybe you are thinking of paying a designer thousands for a new website? While planning your new enterprise, start with the following three tips, and you may save yourself and your venture enough money to fall back on in difficult times (and tough times come for everyone).

First, write down the bare minimum you need to operate your business

I mean the absolute bare minimum, without compromising professionalism, safety or any legal requirements.

Forget about embarrassment: “I could never go see a client with this old laptop.”

Forget about pride or image: “I can’t answer my own phones.”

Forget about the glamour of being a CEO and concentrate on your product or service.

Do you need a shop or can you test your product on a market stall?

Do you need an office or can you meet clients at theirs, or at a café?

Second, once you have your list finished, shop around

Don’t let a sales pitch make the decision for you.

A salesperson’s job is to sell you something, and yet often people forget and get caught up in listening to all the very good reasons “why your business really needs…”

Shopping around, for me, means first finding out how you can get it for free. It is a matter of thinking creatively.

Can you swap someone's services instead of buying outright? What do you have of value, even if it is not related to your business? There may be local or online communities where people exchange skills or services.

You could also look at reuse, recycling or local community groups for second-hand equipment and furniture. Don’t get caught up in thinking that because someone is giving things away, it must be rubbish.

“Pride goeth before a fall.” So don’t be embarrassed to ask friends for help or another business for a discount.

Shopping around can also mean getting several quotes and comparing what is actually included, or going to another area of town where everything is cheaper.

Cheaper does not always mean lower quality, but sometimes it does. Being a clever entrepreneur means figuring out the difference.

Third, don't assume you need to spend heavily on advertising

Before spending money on advertising, think about where your potential customers are and how you can reach them effectively.

If your business is online, look for relevant, reputable places where your potential customers are genuinely likely to find you. Depending on your business, this might include an appropriate business profile, industry directories, social media or local community platforms.

Consider where your potential customers already spend their time and whether you can genuinely contribute to those communities rather than simply advertising to them.

Network at free or inexpensive events and trade shows where your customer or client will attend.

Never say never

With some businesses you may need to advertise straight away or buy something new. After all, going to meet a client with a hole in your trousers is never smart.

There may be times when paid advertising, professional design or new equipment is absolutely worth the investment. The point isn't to spend money – it's to understand why you're spending it and what you expect it to achieve.

That is why, if you're struggling to decide where to invest limited time or money, a business coach can provide an outside perspective and help you think through your options.

Now go and make your dreams come true!