There has been a significant upturn in the number of start-up business ventures since pandemic restrictions set in across the UK last year.
A recent study from The University of Law Business School 1 found that 854,948 independent businesses have been set up since 23rd March 2020, a significant 43% increase compared to the same period a year before (594,957).
Although some budding entrepreneurs are fortunate enough to be able to fund their projects with their own savings, some have no option but to start completely from scratch. With this in mind, experts at ULaw Business School have put together a guide to starting a business with no savings whatsoever.
- Start small and simple
There are a number of potential upfront costs when starting a business which can put you in the red before you even get going. Paying for things such as designs, premises and services are nice to have but not always necessary at the start, so simplifying your operation from the get-go is important.
By conducting your business predominantly online, using services such as the Cloud to store your information, free tools such as Canva to build your brand identity, and free conferencing tools such as Skype or Zoom for any meetings and networking, you’ll be able to build a support base for your company at virtually no cost. This will allow you to scale up and put more complex structures in place moving forward.
- Build around what you already have
If you have a set of skills or can provide a service people want, you can start to monetise with little to no financial investment. If you’re willing to put in your own time and effort, you can adapt an idea to work around the resources you already have.
There are many services you can provide as a business that might align with your current hobbies, such as photography or writing and editing. There is always demand and you can use the equipment you already have to expand these into paid services. Promoting your service or products on social media is a useful and free way to get your name out there, build a reputation and start building a loyal customer base.
- Calculate your costs and stick to a budget
If you’re starting a new business project with no savings to fall back on, it’s important to properly plan and outline your expected costs before you do anything else.
Having a breakdown of your potential outgoings from day one will help you set a clear budget to ensure you don’t spend beyond initially modest means. Forecasting any potential spend each month will allow you to set a target of sales you’ll need as a minimum. Doing this weekly will ensure you can keep track of your progress, which you can start to build on, and increase your spend as your product or service starts to gain traction.
- Run it as a side project (initially)
There is an element of risk when starting a new business, particularly if your base level of finance is zero. One way to easily minimise this risk is to keep hold of any full or part time job you have as a means of slowly funding the project. This will likely mean more working hours to balance both projects but could pay off in the long run.
If you can keep any non-essential costs to a minimum to begin with, any money you do put into any project will help you expand and grow once that becomes necessary. Finally, be sure to seek advice or speak to an accountant to manage any tax implications that come with self-employment alongside full-time work.
- Explore government support
You don’t always have to take a leap of faith financially when starting a business. If you have no notable funds to launch your venture, there’s an array of government support schemes to help you get things off the ground.
The government’s Business Finance Support Finder can offer entrepreneurs different methods of financial aid, whether that’s a business grant or a flexible loan you can pay back in your own time. The options can be tailored to your own circumstances to ensure you get the right amount of support to help you. Make sure you have a solid business plan in place if this is something you choose to apply for, as it will most likely be an integral part of the application.
Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School, commented: “There is no doubt that more and more people are gaining the confidence to start out on their own, with the additional time at home due to pandemic restrictions inspiring Brits to get creative and try to monetise their skills.
“However, whilst there are plenty of success stories of businesses born in lockdown, the challenges facing new start-ups are significant, particularly for those starting out on a modest or non-existent financial foundation.
“In an increasingly digitised world, running a business remotely at very low cost is now more common than ever and we are confident these tips will help inspire entrepreneurs that may have been apprehensive about starting a business venture with no savings to fund it.”
To find out more about The University of Law Business School, please visit: https://www.law.ac.uk/study/undergraduate/business/