Growing a small business is a symbol of success and accomplishment, especially in today’s competitive business climate.
Small businesses are great for the community and the people that they serve, and new ones pop up seemingly every day, born out of a single idea.
There are, however, a few drawbacks to starting a small business, including one that is pretty major: it’s almost impossible to turn a significant profit immediately, and sometimes you won’t see your margins increase until well into the life of your business. However, finding low-cost ways to grow your business is easier than it appears.
For your business to be successful in its early stages, you have to be savvy with your budget. Here is a comprehensive guide to show you how to grow your small business on a less-than-ideal budget.
Why is Bootstrapping Your Business Effective?
Not everyone has the luxury or the credit to take out an enormous small business loan for their marketable idea, but that doesn’t mean they shouldn’t try to run their own business. In this case, a business owner has to try to operate on the smallest budget possible during their growth stage, also referred to as “bootstrapping” growth.
It’s normal for a new business owner to lack room in their budget for much else than the necessities. Making it imperative to find free and low-cost ways to grow a business.
1. Choose a Winning Idea
Without a useful and unique business idea, your small business will have more problems than navigating a modest budget. For inspiration, check out this list of small business ideas that have been successful for people in the past. To be clear, we’re not asking you to reinvent the wheel, but you should always consider the market that you’re entering before making the decision to invest in your own business.
If you happen to have a niche skill, that’s great. You have a leg up on the competition. Just think to yourself, “how can I market this strength in a way that people will want to buy it?” It’s important, as you start to build your business plans, to be brutally honest with yourself. Businesses built on shaky foundations are likely to leave entrepreneurs buried in debt.
2. Don’t Fixate on the Competition
While it’s important to take into consideration the market your business would exist in, you don’t want to fixate too much on the competition.
Once you have your million dollar idea, so to speak, you should start doing your research on the market. What do businesses in the same industry of similar size offer, and what can you offer to be more attractive? Often in a small business, this means being the best at managing the bottom line, which is part of the reason many small businesses struggle to turn a significant profit immediately after launching.
While you should be aware of what your competitors are doing, you shouldn’t fixate on them and try to mimic their business model. Different businesses, even those in the same industry, have different needs and methods of operating, and as Forbes contributor and business management czar Tony Collins says, a business that is unable to differentiate itself from others competing for the same market share will not be able to increase their margins.
3. Consider Every Cost in Your Business Plan
Go through your completed business plan with a fine-tooth comb to tease out hidden costs. For example, if you have a retail store, what sort of location improvement costs and merchandising expenses do you need to account for?
Many times, small business owners are unable to figure out how to grow a small business because they only focus on the core costs of operation, leaving out the added costs that help enhance their business. With that said, in the beginning, it’s imperative to keep costs low and operations lean, but being frugal doesn’t mean running a business on the cheap. If you’re planning to open a storefront on a city street, it would be foolish to skip liability insurance as a cost-saver.
4. Invest in Time and Cost-Saving Small Business Apps
Apps and software can handle the tasks of several employees, in a much more cost-effective way, but many small business owners often don’t consider this. From office communication to inventory management and back of the house tasks like accounting, in today’s ‘app for that’ retail environment, there is a lot that you can automate for a small monthly subscription fee.
With that in mind, here are some great apps and software bundles that will simplify the process of growing your small business with limited staff and a bootstrap budget:
Payroll and Scheduling
You can handle many of your human resource responsibilities with the help of technology, which, in the early days of a new small business, can be a godsend. Here are a few programs to jumpstart your ability to control your business’ employee schedule, payroll and staffing duties without having to pay an in-house human resources rep:
When I Work
This app is ideal for small businesses, because not only do you have the tools to build and change schedules in the palm of your hand, this application also empowers staff to request days off and schedule changes. With an app like When I Work, no longer will you need to manually create staff schedules or rebuild time sheets, saving you hours per week on employee scheduling.
Zenefits is a smart, automated, all-inclusive HR software that allows you to handle payroll and hiring from your computer screen without having to pay a whole HR department. If your small business is, say, a retail store, then having the ability to hire new team members without an HR department is extremely cost-effective and attractive to your bottom line.
The best part? After you initially configure your settings, Zenefits is completely automated, so you get to be hands-off as much as possible. Smart programs like these are key when growing a small business.
Like HR, marketing is a difficult task to handle by yourself. Luckily, there are apps and software designed to make you self-sufficient in increasing your brand’s outreach.
Your email marketing campaigns will never be easier to manage and operate than with the tools given to you by MailChimp. The world’s leading email marketing platform makes it easy to announce sales and special events at your stores, and the best part is, it can seamlessly integrate with your POS system. More on that later on.
One thing that you can do by yourself or with limited staff assistance is manage your small business’ social media presence. So, what’s an app that lets you do this in the easiest way possible? That would be Hootsuite. This app aggregates all of your social media accounts into one platform where you can manage customer interactions and schedule posts and promotions.
Accounting and Expenses
When growing your small business on a small budget, accounting is one of the most important areas to focus on. Since at first, it’s likely that you won’t be able to afford a full-time accountant, it makes sense to invest in a tool that can simplify and automate the process.
Any accounting software that’s easy to learn and use for your daily accounting and payroll recording is a great help to any small business owner, especially when trying to grow a small business on a tight budget. Our personal favorite is Quickbooks.
Another Intuit product, TurboTax, is also a great tool to walk you through the ins and outs of tax accounting for small businesses at the end of the fiscal year.
5. Build Great Supplier Relationships
No matter what your small business sells or what corner of the market you intend to occupy, you’re going to have to depend on suppliers right from the beginning. Very few small businesses are integrated to the point where they can control their manufacturing costs, so part of learning how to grow your small business is maintaining great relationships with the people that make your business tick.
In all aspects of starting a new small business, few things matter more than your business relationships. Customer relationships and interactive marketing can position you as a friendly brand and an asset to your community, which can cause customers to become loyal to your brand, even when you aren’t the cheapest option out there.
Supplier relationships are the same way. Get close with vendors and build a friendly rapport, and they’ll be more likely to offer you your first few months of shipments on low-interest credit so you can use your available funds elsewhere in the beginning.
6. Figure Out Where Else You Can Possibly Cut Costs
The goal when starting a small business is to sell as much as possible while maintaining the lowest possible overhead, so if your margins are unusually low, you may have to sit down with trusted advisers and successful small business owners to learn where they have cut costs to make their business work.
When figuring out how to grow your small business on a tight budget, there is going to be some trial and error. Discretionary spending is often the first to be eliminated. Break your expenses down item by item; does your business really need a new paint job? What about music? Is your monthly Spotify subscription really necessary, or can you just play some old CDs?
7. Leverage Social Media Marketing
Like all marketing initiatives, Social Media does require some investment of time and money. However, social media marketing is one of the most cost-effective ways to increase awareness and drive traffic to your business.
It’s important to note that not all social media networks will make sense for your business. Some sites are better for specific markets and sectors, so depending on the type of small business you’re trying to grow, there are social media channels that you will want to prioritize over others.
8. Use Customer Personas
It isn’t always easy to understand your customers’ desires and need when entering a market. Hopefully, you’ve done your market research and at least have some idea of what types of people make up your customer base, but one low-cost and concrete way to get to know your ideal customer is to come up with customer personas.
These are profiles of the types of people your buyers are. Creating hypothetical customers will help you communicate to them better by giving you the maximum understanding of how to target your marketing. For example: if you have a product that you want to market to soccer moms, you might draw up a persona of a parent who has a lot of responsibility and very little free time. When marketing to them, you can increase your chances of success by positioning your product as a solution for time-pressed moms.
9. Make Time For Public Speaking
Often, conferences and trade shows are looking for panelists and speakers who have experience in a given market or field, and as long as you have an established business, they’ll let you, or even pay you to, speak. Don’t shy away from free speaking engagements, even when it seems like a waste of your time. If colleagues in your field and potential customers see you positioning yourself (and in turn, your brand) into an authority in your market, you’ll increase your reach and authority in the space.
10. Increase Your Search Visibility
When running a growing business, it’s important to focus on improving your rankings in Google’s search results. Google accounts for 70% of all online search traffic, so If you like customers, increasing your visibility in Google search is crucial.
Claim your business on Google, make sure your business information is current, add beautiful photos of your business to grab the attention of searches, and request online reviews to increase visibility. Not sure where to get started? We’ve created this handy-dandy Google guide to walk you through the process.
11. Engage With Charities and Local Organizations
Donations cost money, we get it. But customers notice when you make an effort in the name of your business to help a local cause, and besides, charitable donations are tax deductible.
The same goes for your local chapters such as the Better Business Bureau or the Chamber of Commerce in your city or town. There are membership dues involved, but the backing of an established organization means a lot to customers in your local community.
12. Network with Other Small Businesses
Growing your small business has a lot to do with community engagement, especially if you’re running a local business in a small to medium-sized city. Find other business owners who are more established and partner with them. Often small business owners remember the struggle associated with figuring out how to grow your small business and are open to partnerships that promote both businesses. Think of it as vertical integration without an actual merging of assets.
13. Get Personal With Your Customers
Repeat business is hard to get, especially when your margins don’t allow you to compete on price. This is why it’s important to focus on the quality of your of your customers experience instead of undercutting the competition on price. Customers will return to businesses they have a personal connection with. Remember your customers’ names and follow up with emails thanking them for their purchase. You’ll be surprised once you experience the effect customer appreciation can have on your customers’ loyalty.
14. Negotiate With Your Labor
In the early days of a running a small business, it’s important that your partners and your staff are aware of how tight your margins are going to be moving forward. Sometimes, employees that believe in your business will work for deferred payments or equity in the business. Other times, growing your small business on a bootstrapped budget comes down to creativity and healthy business relationships.
If your business can’t offer equity, don’t fret. Often, offering a flexible and open work environment can be enough to get employees to commit to your business. Especially if they believe it will pay off in the long run. If compensation is another barrier to finding quality staff, get creative with the perks that you can offer employees, such as discounted retail items, Pizza Fridays and other non-traditional perks that can help drive employee satisfaction.
15. Don’t Wait for People to Notice You
If you start a new business and simply wait for the community to take notice of your presence, you’re wasting your time. Make cold calls, send out emails and direct mailing blasts, hand out flyers and utilize innovative sites like HARO (Help A Reporter Out) to increase awareness of your business. The latter is a site where you can alert the press to your business’s entry into the market, and if they feel like your business makes for a newsworthy story, they’ll write a segment about it. So make sure that you are prepared and ready for your closeup!
16. Build a Team of Trusted Advisors
Growing your small business becomes much more simple with the advice of the people who have gone down this road before you. Don’t be afraid to rely on the council of other successful small business owners during those first years in business. They’ll understand, because they’ve been where you are now. Identify businesses and individuals who are successful in your industry or local community and ask them to chat with you over a cup of coffee. You’d be surprised how supportive and helpful small business owners can be, even when their schedules are booked solid.
17. Create an Intern Program
We’ve already discussed negotiating salary in the form of equity with employees, but the presence of interns can also be a huge help early on in your business. Interns have the opportunity to receive valuable experience in a field, while you get leg work that you otherwise might not be able to afford.
Own a clothing boutique? You can hire interns interested in fashion or merchandising. Bakery owners can hire interns from their local culinary institute. The options are endless, you just might have to get creative. If you do go the intern route, make sure to do it both ethically and legally.
18. Learn to Negotiate
Having the ability to make a favorable deal is often overstated when it comes to growing your small business, but when your budget is tight, every little bit makes a difference. This applies to purchasing negotiations with suppliers. If you don’t know how to negotiate prices and deals, you’ll get run over in every agreement, and those slim margins will disappear completely. A good small business owner knows where to push to cut costs, especially in their business’ infancy.
19. Offer Free Seminars
In many cases, there isn’t one single authority on any type of business organization. This applies more if your small business deals with selling supplies to other companies. However, it only takes one speaking engagement or seminar to position you as an authority in your sector. Take advantage of opportunities that allow you to answer other aspiring entrepreneurs questions, and you’ll be surprised how quickly you can build trust in your brand.
20. Make (or sell) Great Products
Many small business owners underestimate the importance a high-quality product can have on creating a loyal customer base. We can’t stress enough how important it is to either take the time to make an incredible product, or take the time to do the legwork and curate them from one (or many) suppliers. It’s worth the extra time it takes to scour message boards and product reviews, look at customer feedback and make sure that the products you carry will stand up to the competition.
21. Utilize Web Resources
There’s no single recipe to starting a successful small business, but there are many places out there that can offer great advice. Sites like SBA and the U.S. Chamber of Commerce provides invaluable resources for both new and seasoned small business owners. Not to mention the plethora of small business blogs available at your disposal.
22. Contribute an Article to a Trade Magazine
As we all know, advertising in magazines is expensive, but guest writing articles for a widely-read publication for your industry is free, and can be great publicity for your business.
If you have writing skills, take a crack at it or hire a content writer for a single authoritative piece that can help promote your business.
23. Attend Local (and Digital) Networking Events
There are tons of events in local communities centered around making connections with other small business owners, and even more opportunities to broaden your professional network on LinkedIn and similar sites. Don’t be afraid to put yourself out there at these free events to extend your community engagement and overall reach with your industry and your audience.
24. Make Eye-Catching Business Cards
Unlike flashy signage for your business, that can be expensive and complicated to install, business cards are cheap and a creative way to build awareness for your brand. Getting quality business cards isn’t expensive, and it’s a great way to leave a first impression. To start, check out Vistaprint and MOO, both good options.
25. Invest in a Reliable POS System
Many small business owners aren’t aware of the variety of choices they have when choosing POS software for their business. Modern POS systems are so much more than the classic cash register with a computer attached, and for a new small business owner trying to stay afloat, consolidating multiple areas of business operation in a simple, user-friendly iPad-based system can be the single change that saves a sinking ship.
What to Expect from Your iPad POS Software
The best POS system for growing small businesses is customizable to fit the unique needs of your business and can help you streamline several different areas of your business.
Inventory reporting is a challenging aspect of a retail store to get a handle on, especially with a skeleton staff. When your human capital is bare bones, so to speak, you need software that will do what you’d otherwise be paying people to do for you. A great POS system can manage inventory and report stock numbers by tracking sales of each product in your catalog.
Transactions and Payment
POS systems can process sales and enable your business to accept multiple forms of payment, quicker than ever thought possible. They also won’t go out of date. Which means as new payments methods emerge, you won’t have to scramble to accommodate your customers’ needs.
Marketing and Customer Relations
Integrations with email marketing platforms and ecommerce platforms like BigCommerce are common in quality POS systems. You can track customer activity, make sure emails are reaching your audience, and manage direct marketing campaigns right from the palm of your hand. How can you say no to that?
In today’s retail environment, analytics are truly what makes your business tick, and despite working behind the scenes, data is vitally important to keeping track of what you’re doing right and wrong with your growing business. POS software tracks data and trends that empower growing businesses to operate at maximum efficiency, increasing your chances of long-term success.
Modern POS software should cater to the small business owner who is always on-the-go. The modern business climate makes it hard to run your business from a desk. As long as you have a WiFi connection, most POS software will allow you to access data from anywhere and at any time.
Another benefit of adopting a mobile POS solution like an iPad cash register is that it can enhance retail operations by allowing you to break free from the cash wrap and make sales right on the shop floor.
When you start a small business, staying afloat in a competitive market can be stressful. We’ve been there before. But perseverance and leveraging low-cost ways to grow your business can steer you in the right direction.