How to Start a Microbusiness on a Micro-Budget

Americans are starting microbusinesses at record rates. Brookings reports that “17% of the 20 million microbusinesses tracked in the U.S. were started after the onset of the pandemic” and the number of self-employed Americans reached a high not seen since the 2008 financial crisis.

A variety of factors are behind the microbusiness boom, but one big reason is surprisingly simple: It’s a lot easier to start a business nowadays.

Between the growing e-commerce marketplace and a plethora of digital tools for starting and running a business, today’s entrepreneurs face fewer barriers than in the past. In fact, many self-employed business owners start with no outside financing whatsoever.

How do they do it? Kimberly J. Howard, CFP presents some must-have tips and tools for starting a business on a micro-budget.

Start simple

In addition to their smaller size, microbusinesses have simpler operations and requirements than other small businesses.

  • Microbusinesses specialize in small markets. By focusing on a niche or hyperlocal market, microbusinesses avoid direct competition with larger brands.
  • Likewise, microbusinesses stick to a limited product mix or launch with a minimum viable product. An MVP gets startups to market with less time and money and generates vital feedback to inform growth.
  • Unless a microbusiness is seeking outside funding, a one-page business plan that covers finances, marketing, and other basics is adequate for most startups.
  • Most microbusinesses operate as pass-through entities. While sole proprietorships are most common, some microbusiness owners choose a single-member LLC for the liability protection and branding advantages.

Take advantage of affordable resources

Running an efficient business doesn’t have to cost a lot. These are the must-have resources for starting and running a business on a tight budget.

  • The Small Business Administration, SCORE, Small Business Development Centers, and other organizations offer a wealth of free educational resources for entrepreneurs.
  • Microbusiness owners can take advantage of free and low-cost tools for running a business such as accounting, project management, and point-of-sale software.
  • Can’t afford a professional? There are lots of online tools to build your brand for cheap, including website builders, logo generators, and brand style tools.
  • You can also find an online Facebook ad template that can help you put together customized ads for the popular social media platform featuring your business’s logo, photos, choice of fonts, colors, and a library of other graphic assets.

Keep overhead costs low

Microbusinesses also save money on the everyday costs of running a business like office space and payroll.

You don’t need heaps of startup capital to make your self-employment goals a reality. Microbusinesses are lowering the barrier to business ownership for millions of entrepreneurs through lower costs and a streamlined path to startup. If you’ve been looking for your path to business ownership, consider starting a microbusiness of your own — it’s closer than you think!

Kimberly J. Howard, CFP is your go-to source for financial planning advice and financial services. Connect with Kimberly today for more info!

5 Tips for Starting a Business After Financial Setbacks

Financial setbacks are never pleasant, but they don’t have to be fatal when you’re an entrepreneur. It’s true, financial setbacks are part of becoming a successful entrepreneur. The trick is learning how to navigate those setbacks so that you can position yourself for success in the future. Kimberly J. Howard, CFP explains how you can bounce back.

1. Learn From Your Mistakes 

Most founders who’ve experienced significant financial setbacks, or even lost their business, made substantial mistakes along the way. Mistakes are part and partial of growing as an entrepreneur. Bill Gates’s first company failed, executives removed Steve Jobs from his own company, and Walt Disney lost $15,000 on a company that failed before starting Disney. Look at your mistakes, ask others for advice, and learn from them. 

2. Create a Detailed Business Plan

Having a business plan is essential before starting a business. Using other people’s money, such as angel investors, can increase your chances of success. However, angel investors often require a solid business plan before investing their money. Your business plan should include the following: 

  • Marketing strategy. How will you advertise your company to potential customers?
  • Competitor analysis. Be honest about your competition, but detail how you’ll beat them. 
  • Financial projections. Have some precise economic forecasts for the first three years.
  • Details about your business. Detail your product and service and how it’ll serve your potential customers.
  • A section on HR. Discuss employee requirements and how you’ll meet those requirements. 

3. Use Free Tools to Keep Costs Low

You’ll need to utilize free tools during the startup phase to keep costs down. Fortunately, there are many free tools to choose from, including:

  • Website builders. If you’re looking to keep costs minimal, look for free website builders that offer easy design with a clean look.
  • Accounting software. Free accounting software is helpful, and ProfitBooks offers precisely that. 
  • Word processing. If you need to edit documents for your business, you can use Google Docs
  • Invoicing. A free online invoice generator makes it easy to create and customize invoices that you can quickly send via PDF.

4. Find Mentors

Everyone faces financial setbacks when they start a business. Some people overcome their setbacks, yet others never start a company again. Finding mentors is the best way to learn from your mistakes. 

Look for various business networking events throughout the year where you can meet business leaders. Use these events to find mentors with advice on how to overcome financial setbacks. 

5. Don’t Fear Failure

You shouldn’t be scared to fail when you start a business. Although failure is somewhat likely depending on your risk levels, fearing failure will achieve nothing. In the future, use disappointment to motivate you to succeed and switch failure from a negative into a positive. 

From Setback to Success

Financial setbacks will always be part of an entrepreneur’s journey, but these tips can help you recover quickly. Use your mistakes to grow and learn, stick to a detailed business plan, use free tools to keep costs low, find a mentor and don’t let fear of failure consume you. In no time, your new venture will be up and running!