How to start a business on a shoestring
amp.theguardian.com/small-business-network/2013/nov/28/start-business-shoestring-budget
Guardian staff reporter
The growth of the internet has changed everything in business, creating opportunities for shoestring entrepreneurs. Photograph: Alamy
How to ...
Self-made millionaire entrepreneur Vince Stanzione proves you don't need to spend a fortune to start a profitable business
Vince Stanzione
In a survey released this month by YouGov, two thirds of the 1,960 small business managers or owners quizzed cited debt and the state of the economy as the main reasons for not borrowing from banks. These figures are perhaps a sign of the times. However, the fact is that you don't necessarily need to borrow money in order to set up a business. I've set up three multi-million dollar businesses on shoestring budgets. One of them, which I still own today, was set up with a small classified advert costing the equivalent of £70 and an answering machine in my spare room.
The types of businesses I favour are those that you can get involved with in your spare time without giving up the day job. Shoestring entrepreneurs don't want to go into competition with Tesco or Walmart. By finding an unusual product that you can deliver via mail order or creating an information resource that satisfies a niche need, you can create a profitable business. And don't feel like you have to stop at one – if they are not eating into your time you can run any number of businesses on a shoestring.
My main businesses have been in carphones, premium-rate telephony and financial publishing, and all of them were started with tiny budgets. I started my mobile phone business with one advert in a national Sunday newspaper, and subsequently built that up to
sell it for more than £1m. I had no money for a shop, so in the pre-internet days I sold via the phone and post. It was my own business but I simply acted as a middleman to start with, collecting orders and passing them onto the telecoms company Martin Dawes. I got paid a commission on every sale without the overheads of expensive premises and stock. It was a simple, low-risk business model based on a market opportunity that I spotted.
The growth of the internet has changed everything in business, but it has also created fantastic opportunities for shoestring entrepreneurs. Thanks to tools like Twitter, Facebook, WordPress, pay-per-click advertising and YouTube anyone can access a worldwide audience for little or no cost. You can now speak to the world without a book publisher, a record company or access to TV or radio studios.
Rather than get caught up in knowing how to do everything, the internet provides opportunities for shoestring entrepreneurs to outsource some tasks to specialists and leave themselves free to focus on marketing the product or service. For example, a friend of mine made a lot of money selling a book on how to teach your parrot to talk. Did he own a parrot or know anything about parrots? No. He outsourced the writing and put his efforts into marketing it.
While I don't want to crush innovation, the idea that you have to have a new big idea to make money is simply false. Often you're much better off looking for a business that is already doing well, then take that idea but do something differently and better. If you search Google for a term and see no pay-per-click adverts then that is normally a worrying sign. You don't have the time or the money to develop a market, you're not Proctor & Gamble, instead you need to find a "hungry" crowd and give them what they want.
I believe that everyone can find something that they are sufficiently passionate and informed about to make money from. YouTube lets you own your own TV station, and if you're good at it and you find a subject people will be interested in, you can build up a niche following and it won't take long for advertisers to come knocking on your door.
Don't be afraid to stand on the shoulders of giants. Platforms like Amazon and eBay have done the hard work to build up an audience for you to sell to, while the book publishing industry has been revolutionised so anyone can write and produce a professional book and get it on Amazon within days and be paid 70% royalties.
One final thought – nothing happens unless you do something. There is never a perfect time to start a business and if you rehearse and rehearse, the curtain will never get up. Good ideas are two-a-penny, but it is the execution and the drive to do something that will make the difference.
Vince Stanzione is a self-made millionaire entrepreneur, investor and author of The Millionaire Dropout: Fire your boss, Do what you love, Reclaim your life.
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