How To Create A Low-Cost Startup Business In 2021

How To Create A Low-Cost Startup Business In 2021

How To Create A Low-Cost Startup Business In 2021
How To Create A Low-Cost Startup Business In 2021

What are the key factors that you need to consider for How To Create A Low-Cost Startup Business in 2021?

Key Factors For How To Start A Low-Cost Startup Business In 2021

There are some fundamental ones, such as not wanting to commit to high overhead costs of offices or premises, so the ideal How to Create a Low-Cost Startup Business in 2021 is working from home (at least to start with). The other option to consider is whether it is possible to work from your Client´s premises.

However, you need to recognise that you are probably not in the capital raising situation, such as with companies like Tesla, who have plans to develop sophisticated new products, for which they need to raise investment funding for research and development, premises, machinery, skilled employees. Without clear ideas and concepts that will need to be proved, it is unlikely that you will be able to start a big company from scratch using other people´s money.

People have started such ventures and used tax payer´s money, by projecting their ideas, which were initially accepted but which have subsequently failed (for example the Delorean car company), but such examples are rare. Most people want to start by covering their basic requirements to pay for shelter, food and water, and thereafter to generate income from which they can improve their lifestyle and pay to go on nice holidays, and spend money on eating out in restaurants. Once they have fulfilled these desires, they will generate more income from which they can improve their wealth and that of their families.

Other people have business ideas for products and services, and they work out what their plans will cost. If they do not have their own money to fulfil their objectives, then they will approach others in order to sell their idea to them. Potential investors may wish to invest money in your business idea. you can see such scenarios on Dragons Den, and you will not that investors will usually require a share of the equity and the profit from such business ideas if they consider them to be worthy.

Here are a few ideas, starting from a very basic level, which you can consider, depending upon where exactly you are on your journey of How To Create A Low-Cost Startup Business In 2021.

Exchanging Your Own Time For Money

Fundamentally, you need to fulfil a demand for a product or service that people or companies want – that is the essence of a service-based business. Your product or service must solve someone´s problem, or pain point, that they are prepared to pay money to resolve or solve it.

So, looking at what may be in demand, which of these skills can you fulfil?

  • Do you provide computer skills
  • Do you provide secretarial skills?
  • Do you provide unskilled or semi-skilled services, such as cleaning or serving?
  • Are you a highly skilled chef, or are you an assistant chef, or a kitchen assistant?
  • Do you provide removal services?
  • Do you provide labouring services?
  • Do you provide security services?
  • Do you provide Window cleaning services?

All of these skills will have a market rate, which you need to be aware of because that market-rate will most likely determine the rate that you can charge your client when you exchange your own time for money.

This is a basic Low-Cost Startup Business, where you provide a service to fulfil demand while charging the market rate.

Offering A Service To Fulfil Some Basic Needs Or Requirements – Per item

There is another approach to offering a service, which is to offer your services using a skill that can be charged on a repetitive basis. These are the sort of skills that you could offer to other internet users, for example:

  • Website building
  • Search Engine Optimisation
  • Creating Landing pages
  • Creating E-book covers
  • Writing articles on a freelance basis (charge per 1000 words)
  • Design and Graphics services (for example creation using Canva or other similar software)
  • Photography
  • Video creation

You can arrange your pricing so that it covers the time needed to fulfil the piece of work, and also includes an element of profit as well. you can offer your services on websites such as Fiverr.com, Upwork.com and similar specialist sites.

Offer Your Services On A Retainer or Subscription Basis

An Alternative Approach that can work well is to provide such services on a Retainer or A Subscription basis.

What this means is that the customer would pay you to provide a set scope of services to them.

A New Product Idea Or Service

There is an alternative approach to starting a Low-Cost Startup Business, that does not relate to exchanging your own time for money. Here is the approach that you could take:

Find a new business idea – this is fundamentally to think of something, either a product or a service, that would be in demand by people in your locality or in a marketplace, which need not be limited, it could be a product that could be in demand globally.

There are examples where such services have been extremely successful globally. Companies such as Uber, who offer a service that is in demand (taxi), but who do not own vehicles or employ people. they use the power of the internet and an app to communicate between potential customers and the providers of that service (taxi drivers).

Other examples of such extremely successful companies are Amazon or Booking.com.

Amazon does have overheads and capital costs of building warehouses and distribution centres, but fundamentally they do not own the products that they sell. They market all the products provided by suppliers and vendors to their customers.

Your Product Or Service – What Does It Do?

What is your product or service and what problem does it solve?

You need to be clear about this since the more effective it solves the problem or pain point and the more time it saves your potential customer, then the more likely you are to have success selling it.

What Do You Need To Do In Order to Offer Your Product Or Service?

Is your product or service an App – do people have to download it in order to use the service. If so, how will you market the App? How will you inform sufficient people about your product or service?

Prove The Concept

If you have a product or service that you want to market globally then you may need to consider translation of your sales and marketing material into many different languages, but this can be done at a later stage. it is not essential to start with. You need to prove the concept of your product or service using a relatively small market place to prove that there is demand for the product or service before taking it global.

Market Research

Research other similar businesses online to see what they offer, their prices, etc., and make sure you are offering something that will be competitive with theirs, and or differentiate.If following your market research you find that there is not really a market for the product or service idea that you may have, then do not be afraid to stop it and try something else.

Competitors

Often researching your competitors can provide you with excellent information to feed your own ideas. this is because if people are buying products and services from your competitors, you know that there is a marketplace in existence. People are prepared to pay to solve that particular problem.

What you need to do is to differentiate your product or service from that of your competitors and generate income and hopefully profit from your own version of the product or service offering.

Consider the case of Lego which has developed a world-class business and originally they made wooden toys. they took an idea that they saw from a UK company to make a plastic building block. What Lego did was to take an idea from someone else and improve it.

What Is Your Intended Audience And Market Place?

This must have a marketplace or an audience who have money and are prepared to pay for that product or service.

Frequently people in English speaking market places will choose all English speaking countries as their potential marketplace, especially if they have an online business. These English speaking countries are:

  • The United States Of America
  • Canada
  • The United Kingdom of Great Britain and Northern Ireland
  • Ireland
  • Australia
  • New Zealand

The above countries are known to be used to and regularly purchase products and services on and from the internet

Additionally, there are many other affluent countries that include many English speaking countries, even though their native language is not English.

This would include all the 27 countries of the European Union, South Africa, and many other African countries, the Middle East such as Qatar and the United Arab Emirates, even Saudi Arabia. In fact, there are many English speakers in many countries of the world, so in general English can be a good language to start with, but it is not essential. You could choose to start in your own language, whatever that may be, for example, French, German Spanish, Flemish, Slovenian, Greek, Macedonian, Russian, Czech, Polish.

Obviously, if you are starting to advertise using an uncommon language, then your potential audience will be limited to speakers of that language, which may be a small potential pool of customers.

You could choose other common languages, such as Chinese or Russian or Arabic, and you could have potentially billions of customers for your product or service, but you must be able to communicate with them in their language, so your marketing material will need to be prepared in that language.

Affluence Of Your Audience Or Market

Then you must consider, how many of that particular audience that you have communicated with, or plan to communicate with have the disposable income to be able to buy your product or service. Is their income sufficient that they could buy your product or service after having paid for their essentials such as shelter (their home) and food and water?

So apart from having a common language, in this case, English, then the marketplace or audience that you have in mind must have money or affluence and be prepared to spend that money on a product or service that you offer.

What Are your Product Development Costs?

If you are choosing to develop a new product, then you need to ask yourself the following questions and be confident that you know the answers to these.

  • How much are the development costs of the App?
  •  How will you fund the preparation of the App and the marketing and sales costs?
  • Who will carry out the product development?
  • How will you pay for the product development?

Brainstorm a list of supplies and materials needed if that is what your product entails. Research the cost of these supplies and materials. Create an estimate for startup costs based on your research.

Draw up a budget to keep track of how much money is coming in/going out. The more sophisticated your product is and the process to develop it, then the more

How Will You Recover Your Costs And Then Make Profit?

You need to ask yourself the following questions and be confident that you have the answers to these before embarking on major expenditure investing in your product or service.

  • How will you recover the money that you invest in developing your product?
  • How much will you charge for your App or product?
  • Will there be a free version so as to encourage people to use it?
  • At what point will your product or service break even?
  • Do you have sufficient capital to cover all your expenditure until you reach the break-even point?

Business Planning

The more sophisticated your business is then the more you will be reliant on having a good plan for your startup. You need to be able to define the following among many other things:

  • What is your  startup business – what problem do you solve for whom
  • Who are your customers?
  • Where are your customers
  • Why are you starting a business
  • What is the forecast cash flow
  • What are the costs involved?
  • What capital is required?
  • How will you manage the cash flow – credit control

You need to have a business plan so that you can track how you are performing against your plan. this should cover your immediate 3-6 months, one year, three year and five year periods.

Summary – Key Factors For How To Create A Low-Cost Startup Business In 2021

We have given you some of the key factors to consider How To Create A Low-Cost Startup Business in 2021.

  • Key Factors For a Low-Cost Startup Business.
  • Exchanging Your Own Time For Money
  • Offering A Service To Fulfil Some Basic Needs Or Requirements – Per item
  • Offer Your Services On A Retainer or Subscription Basis
  • A New Product Idea Or Service
  • Your Product Or Service – What Does It Do? Who Does it Serve?
  • Market Research
  • Competitors
  • What Is Your Intended Audience And Market Place?
  • Prove The Concept
  • What Are your Product Development Costs?
  • How Will You Recover Your Costs And Then Make Profit?
  • Business Planning

There are many more aspects of How To Create A Low-Cost Startup Business In 2021 and we will give you a lot of free information and tips for running a successful small business.

Watch out for other articles about Common mistakes and how to avoid them when starting your own company.

Alan

4 thoughts on “How To Create A Low-Cost Startup Business In 2021

  1. Sammy Allen Reply

    This is interesting, thank you. I’m starting a few businesses right now. There is a lot that goes into it. Way more than I thought. Whew, crazy actually. This is helpful. I’m going to save your site and refer to it.  What’s the most important piece of advice you could give to a person starting their first business? L, Sammy

    • admin Post authorReply

      Hi Sammy, thanks very much for dropping by and commenting. Good luck with your business. As you say there is a lot to it. If I were to give any advice it would be to believe in what you do, give great value to your customers and keep persisting, and be consistent with your content publication, cheers Alan

  2. Kwidzin Reply

    Thank you very much for sharing with us all this well writeen, interesting and informative article with us all here. Yes,I think that 2022 is likely to see yet another influx of peple setting up business online due to the ripple effects of the covid-19 pandemic. Its most certainly an interesting time were living in.

    • admin Post authorReply

      Hi Kwidzin, thanks for taking the time to comment. The effect of covid is still happening, and I never imagined it would be a problem for so long – it is coming up for 2 years, incredible. Lets hope things get back to more like normal soon – online business seems to best way to go, cheers Alan

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