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How My Business Cost Only $1,428 To Start And I Kept First Year Expenses To $1,165

How My Business Cost Only $1,428 To Start And I Kept First Year Expenses To $1,165On June 14th, 2010 I started my own business. At that point I did not even have a name for my company. I was really starting from scratch. My goal was to launch a low capital investment business so that I could fund it myself. My start-up costs included $551 for a computer, $613 for a laptop and $264 on incorporation fees for a total of $1,428.

I really wanted to start my own business because it has been a dream and passion of mine since being a teenager. I don’t know why but I just love running businesses. I think it is something about the challenge of it. Growing up I started and ran numerous small businesses. Because of this passion I was determined to make it succeed and therefore I wanted to give my self a financial buffer to allow for any set backs. I wanted a war chest of cash to carry me through any unforeseen events or to compensate for my mistakes if I was over optimistic on how quickly I could achieve my goals. To create this financial buffer I worked hard to find ways to cut costs where ever I could.

I found numerous ways to keep my costs down and maintain a nice financial buffer. One way was not buying an accounting program. In stead I got a free accounting program my friend developed in excel. You can find it at http://www.profitworks.ca/easy-to-use-accounting-software if you are interested in using it. In addition I developed my own customer relationship management (CRM) system in google docs. An additional benefit of taking this approach was that it allowed me to access my CRM system anywhere I am connected to the internet. In addition it also allows other users to access the system at the same time for when I hire additional employees.

Another major expense when starting a business is usually having someone design your logo. I saved costs here by developing my own brand logo using a free program called paint.net, which you can download free online. As you can see from the picture of my logo it is very simple but it conveys what I want it to. Most often complex logos are less effective then simple ones. I also chose to do my own accounting as accountant fees can be hefty.

As a result my only expenses in year one have been $101 in web hosting fees, $371 on marketing and networking, $291 on a video camera, $75 dollars on a microphone, $77 on supplies and $250 in wages to student help.

I was able to keep my marketing and networking costs so low by only choosing to go to low cost networking events, avoiding any event over $10, and choosing mostly free marketing activities like social media and blogging. I utilized all of the major social media sites (Twitter, Facebook, Linkedin and Youtube) as they are all free. I also did a lot of door to door sales pitches in the first few months of starting up to land my first few clients. The one marketing expense I choose to invest in was business cards. Having good business cards are so important because they impact a person’s first impression of you. Therefore I wanted to have great looking business cards. I have on occasion got cheap and/or unprofessional business cards from other people starting their business and this gave me the impression they either were not serious about their business or that they were not professional. I did not want this to happen when I gave my businesses cards to people so I made mine look as good or better than a large corporation’s business cards.

Another expense I thought was worth spending on was incorporating. I incorporated July 1st, 2011, which I felt was important to protect me personally and to also bring legitimacy to my business. For anyone starting out I would highly recommend it. When people found out I was incorporated they immediately started to take me more seriously. In my particular case I did the paperwork to incorporate myself because in Canada it is easy to do and the government provides documentation to help small business owners do the paperwork themselves. If you are located in the US I would suggest you use one of the low cost online services like CorpNet.

Many business fail within a year of starting up. I think this often happens not because they don’t have a good idea but instead they run out of cash. If these businesses would have been able to stay afloat for 4 years I think many of them would have been successful in the long run. If you spend less when starting a company and give yourself a financial buffer that will sustain your business for 2 to 4 years, you will have a much greater chance for success. At least that is my strategy. By keeping my start up and annual expenses low I have been able to maintain a financial buffer that can fund my business for multiple years until it is well established. Despite having revenue come in at 50% of what I projected in year one, my business is healthy and at no risk of having cash flow problems. I am confident I will eventually get to my projected revenue levels. I am actually thinking I will surpass them later in the future. It might just take a little longer than I planned.

I hope you have found reading the experience I had starting my own business helpful for keeping costs low when starting your own business. My name is Chris R. Keller. I perform small businesses services helping business to business small businesses attract new customers. My company is Profitworks Small Business Services Inc. Check out my blog online at www.profitworks.ca/blog to learn more about marketing your new business.

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