Question: I am planning to start a small business on Cape Cod. I have little to no start-up capital. What are some of the musts I should keep in mind?
Answer: Jonathan Long, Founder, and CEO of Market Domination Media suggests the following:
Create a comprehensive business plan. No matter how great your business idea is if you don’t create a well thought out comprehensive business plan, no amount of capital will matter. If you have a great idea and little capital, don’t let that stop you. Sweat equity and creativeness will help to overcome the lack of funds, but you need a plan that will act as a compass, a guide, a measurement tool and keep you focused. BTW, comprehensive doesn’t mean long. It means well thought out and having enough detail to get you through the startup mode and into the growth stage.
Know what you know and find others who contribute what you don’t know. There is a saying that businesses succeed when they “stick to their knitting.” Don’t venture far from your individual expertise. The less you have to rely on outside resources at the beginning, the better chances for getting through the start-up stage. You can always find outside resources after you get the cash flowing. However, before you even enter start-up, get a good accountant who can guide you.
WOM is the most powerful startup marketing. Tell everyone you know about your enterprise. Network with anyone and everyone who can drive traffic to your business. Use emails, social media, and your website to communicate your message that your doors are open for business. Don’t forget to include your network from your past life. Let them help you get the word out.
Be frugal. If you don’t have to spend on whatever it is, don’t do it. You need six months of operating cash to protect for the downside. If you don’t have it, then every dollar you can save by not spending, is a dollar you will have to become your safety net when the situation arises. And, it will arise.
Plan your receivables to generate the needed cash flow. Make sure it is clear with customers what the terms of payment are before you begin the work. If you are painting a house and want 50% up front and 50% upon completion, put it in your bid. If your business is residential window washing and you want payment upon completion of each job to avoid invoicing, state so before beginning. Have invoices available in your truck so you can write out an invoice and accept a check upon completion. If you are giving credit, make sure they understand net 30 days is not net 45 or 60 days.
Take advantage of anything that is FREE. Your goal is to generate brand buzz with the minimal amount of financial investment. Social media requires sweat equity, but not as much financial investment. Use it if it fits your target market. Local media are always interested in a story. Get them to write a story about your business. The email also can be inexpensive if you manage your own list and email content creation.
It doesn’t take a lot of capital to get going, but you need a plan for how to use your capital, where it will come from and where it will go to survive the start-up