The following guest post by Kimberly Palmer is based on her new book, “The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life.”
When you’re launching a new online business, it’s tempting to spend a lot of money getting it going. You might want to pay for a professionally-built website, the perfect logo, public relations services and maybe a lawyer’s time to help you get your paperwork in place.
Here’s my advice: Don’t do any of that. At least, not until you launch your shop and have a steady stream of revenue coming in.
There are some exceptions, of course. Certain types of businesses require some hefty start-up costs. A custom cake baker needs an oven and a fridge (and the required licenses); anyone selling products that could potentially lead to injuries needs to make sure they are protected legally.
But for most of us launching online businesses, we can do it on the cheap. Here are five tips to help you keep your own costs down as you build and launch your online business on a budget:
1. Use existing e-commerce sites.
E-commerce websites like Etsy, Fiverr, Elance and Freelancer make it easy and virtually free to create a profile, describe what you have to offer, and start looking for customers. It took me about two weeks to officially open my shop after I first got the idea.
That’s because the infrastructure already exists, you just have to tap into it. There’s no need to start from scratch and create your own e-commerce platform, or even your own website.
Sure, you might want to consider hosting your own site once you get bigger, but to start out, you can simply piggyback on the ones that already exist. An added bonus is that it gives you a built-in customer base of people already browsing those sites.
2. Stick with digital products.
I made the mistake of launching my planner shop with the idea that people wanted to buy bound, printed copies of my planners. I was wrong. The printed planners that I paid hundreds of dollars to create are still sitting in my closet, unsold.
What did sell was the digital version of my planners. Not only does that option save me money in printing costs, but it also saves me time and postage on shipping. Digital products can download automatically, too, which means you’re not keeping your customers waiting.
3. Don’t quit your day job.
Quitting your day job is probably the single most expensive decision you could make. And luckily, it’s largely unnecessary. Launching a new online business on a budget can be done on top of a full-time job with relative ease, and in fact, more and more people are doing just that.
A survey from the Young Entrepreneur Council found that one in three millennials have launched side businesses. Employers increasingly see it as a good thing, too, because it means employees are picking up new skills on their own time. So you don’t even need to hide your new venture from your boss.
Maintaining your day job also takes some pressure off your new business. You can experiment and test different ideas out to see what will really take off without feeling like you need to rely on the revenue yet.
4. Use social media to get word out.
Online entrepreneurs can use Facebook, Twitter, LinkedIn, Pinterest and other social media platforms to get word out about their new products for very little cost, and they can often do so more effectively than a more traditional media campaign. That’s because online entrepreneurs are often looking to attract a very targeted audience, and they can find them online by leveraging their existing social connections. The best part is that it’s free.
5. Build an online business on a budget as you go.
You might need your own e-commerce website one day, or a dedicated marketing professional to help you with launch. But you probably don’t need those pricey things at first, while you’re still figuring out your new business’s sweet spot. Instead of blowing your cash on start-up costs, wait to make those investments until you’re further done the road, so you know you’re putting your money where it really counts.
Kimberly Palmer is the author of the new book, “The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life,” and senior money editor for U.S. News & World Report, where she writes the popular Alpha Consumer blog. In addition, she is the creator of Palmer’s Planners, her own line of digital financial guides and money organizers for major life events and goals. You can connect with her at bykimberlypalmer.com, where you can also download worksheets to help you build your own side-hustle.
Great tips! I’ve always thought online business would be a great venture. It’s cheaper, more convenient, and especially flexible. Competition may be aplenty but there’s more than enough people to target anyway and it’s nothing diligence/hardwork cannot conquer.
While social networking is a good way to “get the word out,” I would guess that a person might have to spend most of their time marketing their product and possibly advertising.
Use a good mix of keyword phrases when writing your content. This will allow you to anticipate differences in users’ understanding of your topic and Internet searching skills. Users who know little about your website topic will probably search for different keywords than users who are well-versed in the same topic.