By Nick Harley
Starting a business can be a daunting task, especially if you have given up your main source of income to start your new venture.
Data from Statistics New Zealand indicates that 53 percent of small to medium-sized enterprises (SMEs) fail within the first three years. Research suggests that two-thirds of business collapse is due to financial difficulties associated with poor financial management.
Nobody starts a new business believing their business will fail, but it can soon become apparent that the dedication and amount of work involved is more than you bargained for, as well as the increasing costs of actually running the business.
Even if you have an outstanding idea and a killer product, it is almost impossible for you to become a market leader without spending any money. You’ll need advertising and marketing costs, expansion costs, branding, everyday running costs. The list goes on and can quickly spiral out of control.
Here are five cost effective ways to get your business idea off the ground:
1 Don’t quit your day job until you’re ready
Many people fall into this trap. They believe that if they quit their job on Friday, they can start their new business the following Monday. Unfortunatly new businesses take a long time to generate enough income to stay alive, never mind enough for you to also take a wage out of the business.
Make sure you plan your new venture carefully and don’t quit the day job until the business is off the ground. Don’t forget that by starting your new business your everyday costs will actually increase, because you’ll be supporting not only yourself, but the business growth too.
2 Don’t hire staff
If you are looking for a graphic designer to help with branding, a website designer to give you a great website and a marketing company to help get your name out there, it’s unlikely you’ll be able to afford to take on these people for significant amounts of time. Instead, outsource the work in seperate projects to get the jobs by the right people with the right skills. Don’t try and cover every area yourself, focus on what you are good at and hire the experts to give you a quality business image and save you time and effort and without the hassle of employment red tape.
3 Exploit social media
Everyone has heard of Facebook and Twitter, but do you realise how effective they can be to get your business name out there? Even though Facebook seems to be losing its edge these days, there is a huge potential audience there that just cannot be ignored. Twitter is essential for finding people who may have an interest in your business or are in a similar market sector. Maximising the use of these will ramp up awareness of your business venture in no time at all and best of all it won’t cost you a cent.
4 Networking
Nobody will use your business or service if they don’t know you exist. Join business start up groups in your area and show your face at local networking events. They are ususally well organised and free to attend. If this really isn’t your thing, start by inviting potential clients for an informal coffee.
5 Create a business plan and budget
Would you go on holiday without planning how you will get there, where you will stay, what you will do and how much you will spend? No? Well, don’t run your business that way. Create a business plan using any of the free templates available online and include as much detail as possible. It should include a financial plan detailing your costs.
Nick Harley is a web enthusiast, entrepreneur and industry commentator.
He specialises in start-ups, first stage growth, social media marketing and more. For more information visit www.zealance.co.nz
