Starting and managing a business can seem daunting at first glance for all those who are tempted to walk out and quit their 9 to 5 jobs for good. Even though this decision might feel risky and overwhelming, creating and managing a business can be the best opportunity to achieve personal goals, satisfactory results, and work-life balance.
The good news for aspiring entrepreneurs is that the digital era changed the work environment. Nowadays, everyone can set up a low-cost business that has the potential to bring a high profit. Small-scale opportunities with massive revenue are not just a utopia, they can be a reality. And, rather than needing a lot of money, an aspiring business owner just needs a good and innovative business plan.
How To Start A Low-Cost Business In 5 Steps
- Refining the idea
Refining the business idea is the first step an aspiring entrepreneur needs to start with in order to set up (and manage successfully) a business. A good and well-articulated business idea must be clear enough to answer the following questions: “What is the business name?”, “What does the company sell?”, “Who does the company sell it to?”, “What target audience problem will the company solve/What goal will the company help the target audience achieve?”, and “What makes the company different?”.
- Making a business organisation plan
Having a solid plan for how the business will run is a key step towards setting up a successful business. How many employees will the company have at the beginning? Where will the office be located? A low-cost business can increase profits with a limited number of employees (also two business partners that know how to use their skills can lead a company to success), even the use of a virtual address can offer to any startup significant cost-effective benefits, such as a secure business mailbox, a permanent business address, rentable meeting rooms, and others. The business plan should look at all of these operational expenses and maximise the most benefit from the least expenditure.
- Making a 5 year financial business plan
A freelancer or a business owner can choose to bootstrap a startup (meaning expanding the business with little or no outside investment). The business will typically grow slowly but yet, it will grow. Entrepreneurs however, will typically think about how they can borrow money to grow faster. No matter how a business chooses to fund itself, the financial plan an entrepreneur makes should cover the next 5 years. Some startups fail because they run out of money before turning a profit and this might happen when a business owner makes a financial plan that covers just a short period of time.
- Setting up and structuring the new company
The way an entrepreneur can set up a company depends on individual state laws and countries. In Australia, any future business owner must apply first for an Australian Business Number (ABN), which is an 11-digit unique business number. The ABN allows future entrepreneurs, for example, to register the business and get specific licences and permits (if necessary). The next step should be building the team by hiring a few and indispensable employees (unless a new business owner does not plan to be the only employee of the company, at least at the beginning).
- Launching the new product or service on the market
The last step left is sharing a product (or service) with the world. However, it would be safer at the beginning for a low-cost business to start with a soft launch (in a few words, it would be safer to launch with 10 products to the market instead of launching 1000 products within one month of starting). This approach can also help business owners have a better understanding of how people interact with the new product/service and with the new experience that the company is offering.
To sum up, a low-cost business can generate high profits as long as the new business owners can refine the business idea, create a well-articulated business organisation plan and a 5 years financial plan, set up and structure the company, and avoid a hard launch (meaning that it would be safer to deliver products or services in stages). With just a few tips and key skills, any entrepreneur can turn a small business into a big success.