How to Start a Business on a Budget in the UK
Starting your business on a budget isn’t easy, but it can be done.
Having started my first business at age 14, I have always been forced to find free/super cheap options…
Today, I’d like to share these with you, and give you my best tips and advice on starting a business on a budget (relevant mostly to the UK).
1 – Business idea and plan
Every business starts with an idea, which will branch into a business plan. Don’t worry, you don’t need a 50 page business plan to get started! (In fact, in the vast majority of cases I believe it is completely unnecessary to do this).
Developing your business idea
If you’re thinking of starting a business, you most likely have an idea. However, it is very important that you develop this idea into a business plan before you get started.
Most of the time, when thinking of a business idea, we think of a problem we have, and a specific solution to that problem we would like to see. However, there is a problem with this – other people may not have the same problem, may not prefer the same solution as you, and may not be willing to pay as much for it as you would…
This is why it is crucial to develop a business plan and conducting market research, to make sure that there is a large enough need for your solution, and that your proposed price and specific solution is appealing to your target audience.
The lean business canvas
A great way of building a business plan is by filling out a lean business canvas.
If you have a whiteboard, draw these boxes and headings there, and use sticky notes. Alternatively, you can build this using Google Docs for example, or another piece of software.
As with the whiteboard example, make sure that the initial points you brainstorm are bullet points (as they would be on a sticky note), and refine these as you go along.
Start by identifying the top 3 problems that your company solves. Next, think about who your target customers are, and complete the customer segments section. From here, you can start filling out the rest of the boxes, including the features of your solution, what your unfair advantage is (over competitors), channels of customer acquisition (e.g. Facebook Ads), etc.
Completing the lean business canvas will make any potential problems with your idea stand out, which you can then address and adjust the canvas accordingly.
Testing your ideas
After completing a business plan, you’ll need to test your assumptions. The best way of doing this is by having conversations with potential customers directly.
To talk to potential customers, think about where you could reach them most effectively. Rather than asking random people on the street or friends/family, think about where your exact target customer would spend time. For example, if you are starting a dog walking business, a great way of reaching potential customers could be a local Facebook group for dog owners.
NEVER post links/promotional material in Facebook groups without first asking the administrators. If you ask nicely, they are far more likely to allow you to post, and may even help promote your post in some other way.
Start by creating a survey (many free online tools for this) asking people quick and concise questions about your business idea.
Always be ready to adjust your business plan based on this feedback! Remember, you’re trying to build a business that solves the needs of these people, so it is better to make changes than stubbornly stick to your original idea.
As you’re talking to people and getting feedback, adjust your business plan/canvas accordingly with these new ideas, until you’re satisfied that your business is ready.
Make sure that it is solving specific problems that enough people have, who also like your solution and would be willing to pay your price for it. Its also vital to think about your unique selling points (USP) or unfair advantages, as proper planning here will make it harder for competitors to compete with your solution.
At the start, your main unfair advantage will likely be you – your unique insight, experiences, and vision.
2 – Setting up your business
Once you have a business idea and plan in place, you’ll need to register your company.
Luckily, this can be done on a budget. However, saving money here also means you need to educate and inform yourself carefully about the laws and responsibilities related to starting and operating a company.
Fortunately, there are many free resources available for this, that I will direct you to throughout this next section.
Deciding on company type
It’s important to decide which legal structure you wish to use for your company. If you plan on being the sole owner of your business, registering as a sole trader may be your best option. However, if you’re looking to set up a company as a separate legal entity to you, then a limited liability (LTD) company may be your best option.
I would strongly advise you to look at the different options available, and find the one that best suits your situation and needs. The good thing is that detailed documentation and guidance is available online (including the gov.uk website).
Registering your business
Registering your business can be done for a very low price (around £12 for a Limited company) on Companies House.
There are many company formation services out there, but if you’re on a budget, I would strongly recommend doing it yourself at Companies House. Their registration process walks you through the different steps to make sure you have the right information to get started.
Company directors have ongoing responsibilities, including but not limited to submitting corporation tax returns and completing an annual confirmation statement. Before setting up your company, it is very important that you are aware of the responsibilities involved.
3 – Getting started on a budget
Once you have your business plan in place and registered up your company, you’ll need some branding, digital assets, marketing, and more.
In this section, I’ll walk you through the different digital assets you may need, and how to source them on a budget.
Great businesses are built on strong brands.
It may not seem important to you at this stage, but taking branding seriously early on will help your business stand out.
A great resource for generating nice colour schemes is coolors. I would also suggest reading more about the psychology of colours, and selecting a brand colour palette that is appropriate for your business.
Choosing a different colour scheme than your competitors can also help you stand out.
Canva offers a free version which you can use to design a logo and basic brand assets (e.g. social media banners) with your chosen colour scheme.
However, if you’re willing to pay money for a logo I would suggest hiring a freelancer directly.
There are many free tools available for building websites, however unless your website is very basic (i.e. information only with no user interaction), I would suggest hiring a web design agency or working with an experienced web developer instead.
I have great personal experience with InstantPrint, who offer great value and service, and excellent bulk discounts.
As for design of print materials, Canva offers templates, however working with a freelancer is always my preferred option unless I am unwilling to spend any money.
Print materials may not be as important at the moment, however having business cards at hand is always a good idea. You never know who you’ll bump into!
For most businesses, the best free marketing channel is social media.
If you’re willing to spend time creating a good looking profile, creating high quality content and following the right people, you’ll be able to build a solid marketing asset over time.
There are many great tools out there for scheduling social media posts, however if you’re trying to save money you can do this process manually for free.
As an entrepreneur, your most valuable asset is your time.
Therefore, the more you outsource, the more time you’ll have for big-picture planning, and running your business.
In my opinion, the best option for startups is to work directly with freelancers – this is exactly why I started Revolancer.