The BizFilings blog covering business tips and trends.
How to Start a Business with $20,000
Published on Jul 25, 2013
Learn how any entrepreneur can start a business on a budget of no more than $20,000.
Following our recent Facebook poll on the one issue entrepreneurs wished they could permanently solve for their business, we pointed to five ways to start a business with only $1,000.
While most entrepreneurs are strapped for cash, if entrepreneurs have at least $20,000, they are absolutely ready to start a business and register a company. Regardless of the starting capital, the core questions every entrepreneur should ask themselves before incorporating a business remain the same:
What are the start-up costs – Determine what is absolutely necessary in order to get the business up and running such as permits, licenses, incorporation costs and basic infrastructure like computers, software and other services.
What are the operating costs – Confirm what’s needed to keep the business running such as supplies, employee salaries and rent. Keep in mind that the costs for starting an online business are drastically different than those to start a cupcake shop.
What are my personal expenses – No matter what the industry is, $20,000 results in a tight budget for anyone. Identify what is absolutely needed to open a business and accrue the right customers and cut any spending that doesn’t lend itself to these goals.
In addition to these core questions, $20,000 doesn’t necessarily limit the type of business an entrepreneur pursues either. Although it will require some self-control, below are a few options for those looking to remain within their budget, but form a corporation:
Turn your hobby into a business – Passion and conviction in a specific product, service and or business idea will keep any entrepreneur committed to achieving success. By turning a hobby into a business, the items to start the business and maintain consistent business operations are likely already owned, which can significantly costs. For any entrepreneur turning a hobby into a business, be sure to check off a list of requirements and be ready to prove a motive for profit.
Start an online business – Without the need to pay for office space and utilities, starting an online business can quickly reduce the start-up and operating costs. Additionally, with the explosion of online storefronts such as Etsy as well as thriving public or niche social media communities, entrepreneurs have the opportunities available to quickly develop, build and grow their brand and customer base.
Open a franchise – While opening a franchise may limit an entrepreneur’s full creative freedom, it nonetheless is a fantastic opportunity to grow a business. Research what franchise opportunities are best and keep in mind that franchisors offer different investment tiers, with the lowest investments being home-based or a weak support network.
No matter the budget, starting a business takes a large amount of courage and conviction and staying in business requires a unique mix of perseverance, creativity, hard work and even luck. If every entrepreneur is honest about their goals, costs and passion, many will be ready to take the plunge.