According to Gurbaksh Chahal, the founder of ClickAgents, BlueLithium and RadiumOne, when you’re getting a business off the ground you should have big dreams. No one ever got anywhere by thinking and acting small, he said. However, he also maintained that thinking small was equally essential when it came to overhead and operating expenses.
“It’s entirely possible to start an enterprise on a shoestring budget and build it into a multi-million business,” he said.
This is an increasing trend among Brits, suggested research conducted by Shell LiveWire, which found that entrepreneurs were increasingly starting businesses with limited funds.
In a poll of 241 entrepreneurs, more than a quarter said they spent less than £1,000 in the first year of launching their business. Another 24 per cent spent less than £5,000, while 6.7 per cent spent more than £100,000.
Almost three-quarters said they had dipped into their savings account, while 30 per cent also borrowed from friends and family. Just ten per cent said they took out a bank loan, and less than five per cent raised money from either crowdfunding or through re-mortgaging their home.
Furthermore, a third of the first-time business owners who started a company in 2014 had a household income of less than £25,000 a year, a report by Experian showed, up from less than a quarter in 2009.
“Successful entrepreneurs don’t become successful by squandering what limited funds they have,” said Chahal. “The business world is full of industrious leaders who didn’t allow a lack of funding to stop them from building mega-empires.”
Take, for example, Anita Roddick, the founder of The Body Shop, who managed to get a $6,800 bank (£4,475.95) loan in 1977 to open a single skincare shop and saved money by mixing ingredients at home. She also encouraged customers to return empty bottles to be refilled.
Read more about saving money:
- 10 sources of finance for your business when the bank says “no”
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- Corporate event planning tips: How to save money like a boss
“In the world of technology, the Steve Jobs story is a classic,” said Chahal. “He was given away for adoption at birth by his biological parents. A college drop-out because he couldn’t afford the fees, he slept on the floor in friends’ dorm rooms, returned Coke bottles for money, and got free meals at the Hare Krishna temple. He started Apple Computer in the garage of his parents’ home.
“Larry Ellison, was also given up for adoption and also dropped out of college. He co-founded the forerunner of Oracle with two partners and a total investment of $1,200 (£789.87) out of his own pocket.”
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