Many businesses can, and have been, started on the proverbial shoestring. It’s not easy and it certainly takes a major commitment on the people involved, as they have to substitute “sweat labor” for cash capital and hope for a reward in cash as a result.
Depending on just where you are there may be specific licensing and registration requirements that absolutely must be met before, or upon, opening for business. In same areas, zoning inspectors are always looking for new business activity, with an eye for all of the proper approvals. In other places, opening first and filing later is accepted, although there may be some small fines or penalties.
It can be a blessing when you are able to pay the startup fees from cash generated from your already open business. But you should still understand exactly what is required and be prepared to attend to them as quickly as possible. Many municipalities are forgiving of new businesses, but anyone hates to think they have been taken advantage of.
Of course there will be some things that definitely will require some cash up front, although your cash can be personal credit cards. Visa, MasterCard, et al have helped get many a new business on it’s way. Beware the fact that sometimes the Visa and MasterCard bills can also outlive the venture, sometimes by years, so use plastic as little as possible.
If in a brick & mortar store, or even a market stall, car boot sale or flea market, you will need to pay rent up front. The same with utilities, if they are involved. In many instances, you may not be able to use plastic for these startup expenses, so some cash (even if from an ATM) or a check will be required.
While you can get a totally free online shop, if that is how you are going to be doing business, they are often looked down upon by many, indicating that you do not have enough confidence in your own business to make what is truly a small investment in your own business.
You can get started online, with your own website, domain name and online store for very little and by showing that you have faith in your operation by making the investment, rather than using a totally free website, you are building customer confidence right from the start. And you can do this with plastic.
Keep in mind that you don’t need the biggest, the boldest and the best right from the start. Not with an online store, not with a B&M store or even having the premier spot in a car boot or flea market. Sufficient will do just fine for a start.
Of course, there is also eBay and the other online auctions. Here you have little or no start-up costs, but you must understand that you will have charges, even if you sell nothing, with many auctions. So, while it’s great to think you are well on your way to some of those Internet Millions, make sure you have some money set aside for fees, even if no sales are made.
Also be aware that many new online sellers are subject to great scrutiny by both eBay and PayPal or any other payment system they may use. It is very possible that you may have some of your sales funds held “in trust” until you prove that you are totally legitimate and are not going to sell and run.
This is not money you need up front, but you must be aware as you begin making sales that money the money from sales that you planned to use to buy goods is tied up for a month or more.
And, of course, you are going to need goods to sell. By far the shoestring method dictates “dropshipping”, where you do not physically own the goods. You advertise and take orders for the goods, you get paid for the order and then you turn around and order from your supplier, who ships out the order in your name – direct to your customer.
Sounds good, since you have zero investment in inventory. It can be a very good way to start on a shoestring. However, keep in mind the subject several paragraphs above. You may have that sale money held! So, you have sold the item, you have committed to delivering the item to your customer within the period you stated and now you need money to actually order the item. Things are not always as simple as they seem.
You definitely want to start out with good feedback, the last thing you need is for your first buyers to complain about not receiving their orders as agreed. So, as much as the auctions like to make you think you can “start for nothing”, that is not quite the truth. You MAY have your funds tied up and you must prepare ahead of time.
Now it the time to use your plastic, if possible. You are in a jam, you need to get the orders shipped and your sales money is tied up. You need to either have a couple of inches of shoestring still in your back pocket, have a credit card, or face bad feedback and risk being dumped by eBay.
Sort of blows that image of starting with absolutely nothing and becoming a millionaire on eBay. When those stories started all the rules and hold-backs were not in place. And not everyone started with holes in their pockets, much as they’d like you to believe their rags to riches tales.
It is still possible, but you have to be very careful of what you sell (certain products get more scrutiny), how you sell it and do your best to have some sort of “fall-back” available if the need arises.
Depending on just where you are there may be specific licensing and registration requirements that absolutely must be met before, or upon, opening for business. In same areas, zoning inspectors are always looking for new business activity, with an eye for all of the proper approvals. In other places, opening first and filing later is accepted, although there may be some small fines or penalties.
It can be a blessing when you are able to pay the startup fees from cash generated from your already open business. But you should still understand exactly what is required and be prepared to attend to them as quickly as possible. Many municipalities are forgiving of new businesses, but anyone hates to think they have been taken advantage of.
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If in a brick & mortar store, or even a market stall, car boot sale or flea market, you will need to pay rent up front. The same with utilities, if they are involved. In many instances, you may not be able to use plastic for these startup expenses, so some cash (even if from an ATM) or a check will be required.
While you can get a totally free online shop, if that is how you are going to be doing business, they are often looked down upon by many, indicating that you do not have enough confidence in your own business to make what is truly a small investment in your own business.
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Keep in mind that you don’t need the biggest, the boldest and the best right from the start. Not with an online store, not with a B&M store or even having the premier spot in a car boot or flea market. Sufficient will do just fine for a start.
Of course, there is also eBay and the other online auctions. Here you have little or no start-up costs, but you must understand that you will have charges, even if you sell nothing, with many auctions. So, while it’s great to think you are well on your way to some of those Internet Millions, make sure you have some money set aside for fees, even if no sales are made.
Also be aware that many new online sellers are subject to great scrutiny by both eBay and PayPal or any other payment system they may use. It is very possible that you may have some of your sales funds held “in trust” until you prove that you are totally legitimate and are not going to sell and run.
This is not money you need up front, but you must be aware as you begin making sales that money the money from sales that you planned to use to buy goods is tied up for a month or more.
And, of course, you are going to need goods to sell. By far the shoestring method dictates “dropshipping”, where you do not physically own the goods. You advertise and take orders for the goods, you get paid for the order and then you turn around and order from your supplier, who ships out the order in your name – direct to your customer.
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| Small business solutions |
You definitely want to start out with good feedback, the last thing you need is for your first buyers to complain about not receiving their orders as agreed. So, as much as the auctions like to make you think you can “start for nothing”, that is not quite the truth. You MAY have your funds tied up and you must prepare ahead of time.
Now it the time to use your plastic, if possible. You are in a jam, you need to get the orders shipped and your sales money is tied up. You need to either have a couple of inches of shoestring still in your back pocket, have a credit card, or face bad feedback and risk being dumped by eBay.
Sort of blows that image of starting with absolutely nothing and becoming a millionaire on eBay. When those stories started all the rules and hold-backs were not in place. And not everyone started with holes in their pockets, much as they’d like you to believe their rags to riches tales.
It is still possible, but you have to be very careful of what you sell (certain products get more scrutiny), how you sell it and do your best to have some sort of “fall-back” available if the need arises.
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