How to Start a Business with Minimum Investments?

Low Investment Business Ideas

The bigger your initial investment is, the further away your break-even point will be. Now, before you reach your break-even point, there can be no talk about profits. So, your main objective will be covering the debt that was created for the business to even launch. Due to the fact that the majority of businesses fail due to their inability to be self-sustainable or start generating profit in time, learning how to do so as quickly as possible may make a difference between success and a failure. With that in mind, here are several tips to help you out.

1. Opt for drop shipping

If your business is in the retail industry, what you could do is adopt a drop shipping model. This means that you’re merely a link between a manufacturer and a buyer and that you’re gathering a fee for every purchase. This also means that you don’t actually have to own a warehouse or even ever get in touch with the physical product. The reason why this is so cost-efficient is due to the fact that you’ll never be in a scenario where you have a full inventory of items that you simply can’t get rid of. Moreover, diversifying your offer becomes a lot easier (from an infrastructural and logistical standpoint).

2. Registering a company online

The next thing you can do is register a company online. This allows you to get through the registration process, without investing too much effort or having to gather too much paperwork. Moreover, this is something that can be done for as little as $500, which is an incredibly low rate when compared to what it would take to do this in a traditional manner. Moreover, registering a company the old-school way would mean that you have to wait for weeks for all the documentation and certificates to arrive. In this way, you can get them in a matter of minutes. If time is money, then this method represents the pinnacle of frugality.

Also Read: Ways to Funds your Small Business

3. Home-based office and telecommuters as a workforce

The reason why so many small entrepreneurs apply for loans in order to start is to get the supply (we already covered the way around this in the first section), register a company (section two) and deal with the infrastructure. When it comes to the infrastructure, it really all comes down to your own ambitions and, once again, there’s no reason for you to go the old-fashioned way about this.

Namely, you can start a home-based business and employ freelancers and telecommuters. Due to the fact that a lease on the office is one of the largest expenses on your list, this could help you cut your costs by quite the margin. Furthermore, if you do some research on home-based business tax deductions, you might even find a way to make this already frugal business model even more cost-effective.

As for freelancers and telecommuters, if you decide to keep them on performance pay, you’ll A) keep them motivated for work and B) ensure that you don’t have to overpay them when the business is low. In fact, this is a similar scenario to the one we’ve discussed in the first section of this post. When there’s work, there’s profit to use for payrolls. When there’s not enough work, you don’t have to lay off anyone due to the fact that your workforce isn’t really affecting the overhead (at least not at the moment). To sum it up, everyone carries their weight and no one gets paid for idling.

4. Outsourcing

Starting your own customer service department, hiring an IT specialist, a seasoned HR representative and making your own digital marketing team are simply too expensive for a small business. Therefore, you might want to outsource these functions. The way in which this works is fairly simple. First, you find a reliable agency to outsource to. Next, you negotiate terms and services that your business needs and ensure that it’s a price that you can actually afford. The reason why this works so well is due to the fact that you can renegotiate these terms later on. This will come in handy once your business expands and starts requiring a more comprehensive service.

Also Read: Why is Business Valuation Important

Conclusion

One last thing that we have to mention is the fact that these four tips aren’t available to all industries and business types. If your business needs specialized or customized premises, you may not be able to work from home. If it’s not in the retail, then drop shipping model is probably off. A similar thing goes for other tips on the list as well. Still, when it comes to starting a business with minimum investments, the above-listed four ideas are definitely the way to go.