The greatest challenge facing any budding entrepreneur is how to build a successful business with limited resources. Winning this challenge can mean the difference between building a successful company - and allowing your dream to die.
And, while money may be the fuel that drives success for you and your business, money alone is no guarantee of success. To be successful, you also need drive, motivation, commitment and hard work.
Taken together, these can help any entrepreneur the resources they need to overcome the problems of limited financial resources.
Here are five simple strategies for success you can use to help your business succeed despite limited resources:
Bootstrapping is the practice of funding and growing your business organically by using only funds earned by the business. In effect, your business grows and expands in both scale and in expenses only at a rate that is supported by its income. This encourages independence by forcing you to rely on internal finances, rather than investors or outside loans, while imposing strict financial discipline. This results in a strong, disciplined business, and forces you to make responsible financial decisions centered on maximizing revenue while minimizing expenses.
2. Leverage social media marketing
Social media can play a critical role in marketing. Learning how to leverage various social media platforms such as Facebook, Twitter, and Snapchat can help you build a successful relationship with customers and potential customers at minimal cost. However, be aware that social media marketing is about more than pushing sales. Social media is a two-way partnership between business and customers in which you provide valuable information to customers, and they provide valuable feedback for you. Your reward will be customer loyalty and product more closely attuned to the needs of your customers.
3. Learn from your mistakes - and be nimble
Limited financial resources can be a blessing in disguise for a first-time entrepreneur. While this sounds wildly counterintuitive, it can be a critical component in your eventual success, and for one obvious reason - companies with limited resources can't afford to move forward with ideas that don't work or continually throw resources into a product that is doomed to fail. Limited resources can self-limit the potential damage that you can do to your business by pursuing the wrong idea, the wrong product, or wrong market. If something is not working, you have to be smart enough to realize that it is not working, and nimble enough to change and plot a course that will result in success.
4. Build strategic partnerships
One way to make maximum use of your limited resources is to build mutually beneficial strategic partnerships with other companies. For instance, a graphical arts company can team up with a web design company and provide free or reduced-price services to each other that will benefit both companies. Other forms of quid pro quo sharing of resources can also extend to such things as sharing office or warehouse space with another company. Working in this way with a company outside of your field, but which can provide services beneficial to your company, can build mutually beneficial commercial relationships that will benefit both companies for years to come.
5. Be money smart
The single most important strategy to help your company grow and prosper during those risk, cash-strapped early days is also the most obvious: be money smart. Every expenditure must be justified, quantified and examined from every angle. Far too many startups fail because they put too much emphasis and too much money in things that amount to little more than set-dressing for potential investors and do nothing to enhance core business or increase revenues. Wise spending and frugality today will build a stronger company tomorrow.