How to Start a Small Business on a Shoestring Budget

Have you ever had an idea for a small business? Maybe it’s a unique product you believe would be a hit, or a brick-and-mortar storefront that would provide a needed service to a neighborhood.

For those would-be entrepreneurs who actually take steps to realize their business idea, however, many eventually hit a brick wall. Financing a business startup can often prove too big of an obstacle or present too much of a commitment in time and resources. As much as you may want to run your own small business, quitting your full-time job and mortgaging your home in order to get a business off the ground can be too much risk to take on.

But many businesses can be started on a shoestring budget without a full-time obligation. In fact, some of the best small business ideas can be found in favorite hobbies you’re already doing in your spare time. There are countless stories of entrepreneurs who turned their weekend passions into full-time, successful businesses. The key to a successful shoestring startup is to combine an activity you enjoy with an identified business niche.  It’s also wise to protect your new startup and its assets with the right business insurance, such as Nationwide’s businessowners policy (BOP), designed with the small business owner in mind.

Building a hobby into a business

Following a passion can be a key ingredient in a successful shoestring business, which is loosely defined as requiring less than $1,000 in startup costs. Such startups should not require special skills, or skills that can’t be acquired in a short time with the right resolve.

An example of a shoestring business might involve a person’s love of photography—the shutterbug who is always taking photos of family events or nature scenes. That passion could be parlayed into work in wedding photography, gaining experience by assisting an established photographer or building a portfolio by photographing friends’ or family members’ weddings for free. It’s also a business with working hours on the weekends, making it easier to manage with a full-time job.

Likewise, an avid hiker and outdoor enthusiast could turn his passion into a business by leading tours as a field guide. Or, a dedicated knitter could build a following by selling her unique patterns and designs online.

Promoting your new business

Small business owners such as these are able to keep marketing expenses on a shoestring level by promoting themselves through word-of-mouth, or by designing a website on the cheap to help drive business. Social media sites such as  Instagram and Facebook are excellent tools to attract customers and are free—other than the time needed for posting content.

Harnessing the power of social media is a great no-cost way to promote a shoestring startup, such as one inspired by a love of food and cooking. Whether you enjoy baking desserts or re-creating beloved family recipes, posting a menu and photos of your day’s offerings and taking delivery orders can be done online or through popular mobile apps with no overhead costs required. A food-centric business such as this can also gain customers at farmers markets or as a street vendor tweeting out times and locations to followers.

Protecting your new business

While money can be tight for a startup, you shouldn’t cut costs when protecting your company and yourself from the risks involved with running a business. Luckily, Nationwide offers customized insurance solutions tailored to your budget and needs. Learn more about how small business insurance can help build and protect your company, and request an online quote today.

10 Tips for Small Business Marketing

As the owner of a small business, you are likely the chief lead generator and chief marketer. These tasks may not be what you most enjoy, but they are not difficult and can even be fun. Here are 10 tried-and-true ways to make the process easier:

1. Market your expertise

What do you do or offer that no one else does? What expertise do you have that your competitors can’t match? This is part of your “authority platform.” Think about how best to use it to attract the clients you want. Perhaps you’re a health and fitness coach. Gyms and fitness centers provide a ready-made base of potential clients, but how do you reach them?

You could host a special program in person or via a Webinar. Such initiatives show potential clients that you have valuable information to share.

2. Tap word-of-mouth

Recommendations from people you’ve done business with and from family and friends will always be the best form of advertising. These days, word of mouth includes online and offline referrals from satisfied customers. Online reviews have a proven track record of generating new business, too. The cost of word of mouth advertising is low, which means your return on investment (ROI) is high.

3. Got raving fans?

Turning the people who know and do business with you into raving fans will further boost word-of-mouth ROI. Perhaps you run a heating, ventilation and air-conditioning company and one of your clients, a hair salon, is having a business anniversary. Offer to throw a party. You’ll generate loyalty, score brownie points, and add a personal dimension to your bond with the client.

4. Strategies, then tools

Educating and providing value to clients and prospects is one example of a strategy. How you follow through may include tools such as in-person workshops, articles on LinkedIn, free e-newsletters or free 15-minute consultations. Let the strategy and your authority platform guide you on the best initiatives to launch. Otherwise, you’ll be spending valuable time and resources on initiatives that yield no long-term relationships and do nothing to expand your client base. Also, make sure your strategy is cost effective.

5.Think intrinsic value

Relationships have value and are not a means to an end. People can “smell” when you’re angling for leads and are not committed to developing relationships, says Art Radtke, a customer success manager at marketing firm More Prospects Now, based in Annapolis, Md. “We want attraction,” he says. “We want to give people the ability to step toward us naturally,” which goes back to figuring out how you can serve them.

A young investment advisor Radtke knew went to a meeting looking for referrals. He met many people, including a couple of estate planning lawyers. The attorneys didn’t send clients to him directly, but, when asked, they were quick to recommend him to others.

6. Expand your attitude

Anything that gains or maintains a place in someone’s mind is marketing. An example: Radtke’s firm suggested that a title company make homebuyers feel as comfortable as possible by offering them coffee, tea and homemade cookies while they read and signed their contracts. Midway through, the clients found a $50 gift card to a local restaurant as the title company’s thanks for their business. They went home happy and told others about their positive experience. Referrals jumped by 30%.

7. Get help!

Be sure to ask clients for help with referrals and social media posts. (This goes back to word-of-mouth.) People for whom you’ve done a good job will want to recommend you. Make it as easy as possible by putting clients’ verbal testimonials in writing and asking them to post to Facebook or other social media channels.

8. Advertise

You still have to build relationships. If people don’t know you and you’re not providing any added value, they disappear. This is why paid advertising is also key. Be sure, though, to think through the most effective way to promote your services before you take out an ad. A pastor Radtke knew tried unsuccessfully to advertise services at his church on Facebook. Radtke suggested that he change tack and highlight the church’s support groups for the newly divorced. People signed up to receive a series of informative articles aimed at recently divorced singles, allowing the church to expand its email subscriber base. Some of those who subscribed joined the support groups and took part in other church-related activities.

9. Evaluate

What’s the return on investment from your strategies and tools? If you don’t already know, ask new clients how they found you. Tailor your marketing accordingly. Maybe four hours of cold calling yielded only one person who’s ready to buy your product or engage your services. Maybe a workshop that likewise took four hours of your time yielded five referrals, three of which are now clients. Record the time spent on each strategy and the number of new clients added. Having this information at your fingertips will allow you to assess which strategy is working best.

10. Track the long haul

By recording this information and using it to conduct periodic assessments, you may discover that an endeavor that at first appeared ineffective has actually been very effective over the long haul.

Remember: Some initiatives take longer than others to yield results, and client relationships take time to establish. Don’t be impatient, as strong relationships are key to any successful business: They yield repeat business, solidify client loyalty and generate referrals.

Key Tips for Buying a New Car

Car shopping can be a stressful event even for the savviest negotiator. For most people a car is the second most expensive purchase they’ll make next to buying a home — all the more reason to be prepared and have a plan for picking a car out and financing the purchase. A snap decision at the dealership can easily lead to buyer’s remorse you’ll have to live with for years.

“All big purchases can be stressful,” says Wade Newton, spokesperson for the Alliance of Automobile Manufacturers, “and considering how durable cars are today, they can be a long-term commitment.”

Your car purchase needs to start long before you set foot in a car dealership – with background work that will pay dividends not only financially but for your peace of mind.

Determine your budget

Like any major buy, determine your budget and define your needs within that constraint. Your car expense shouldn’t exceed 25 percent of your monthly household income, and that includes all of your vehicles. Besides monthly auto loan payments, you should factor in operating costs such as gas, maintenance and insurance.

Once you know how much you’re able to spend, you can start to narrow down the list of cars you want. It’s one of the fun parts of buying a car, but with challenges of its own. “Consumers have seemingly endless choices when it comes to buying a car, which is a good thing,” says Newton. “But it also means you have to look around at all of the options. Automakers provide hundreds of different models designed to meet a variety of needs, and consumers’ options are growing.”

Conduct the necessary research

Start by visiting the websites of automakers and other car sites to get an idea of model inventories and features available in your area. With your list of preferred choices, you can then look at whether you want to lease or buy new or pre-owned. Used cars offer the best upfront value but have shorter warranties and higher loan interest rates. “If it’s not a new auto, always be sure the vehicle isn’t under an active recall,” says Newton. “It’s easy to check at safercar.gov, and you can search by VIN.”

Leasing a vehicle allows you to get a more expensive car, but there are restrictions to “ownership” and you’ll have to turn the car in after the lease term is up. If you choose to buy new, you may not have the budget for as many features, but you’ll get a full warranty and lower interest rates. Use an auto payment calculator to determine how much a car loan for a new car would cost.

Determine total ownership costs

After you determine the exact model you want, you can calculate the monthly insurance and fuel expense to figure your total ownership costs. You’re then able to shop for the best pre-approved financing deal through a bank or credit union. Dealers sometimes offer loan incentives for the model you’re after, as long as you qualify. Either way, having your financing secured before you walk into the dealership can make for a simpler, less-stressful process.

Know the price of the model you’re leaning towards

Next, research your model’s invoice or wholesale price. This gives you a general idea of what the dealer paid for the vehicle and puts you in a better negotiating position. Shoot for a sales price close to that amount before any discounts, keeping in mind that dealers need to make at least some profit to stay in business.

Speaking of discounts, check the automaker’s website for promotions or rebates. You may also find discounts aimed at specific groups, such as students or military personnel. Whatever rebates, discounts and other incentives you uncover can usually be combined.

Go for a test drive

With all your research in hand, you’re finally ready to visit the dealership. Make an appointment for a test drive, and take your time behind the wheel until you’re sure it’s the right fit for you. Play with the controls and make sure the car’s features fit your needs. For example, is the trunk large enough for all the items you plan to carry? If you have regular passengers, will they be comfortable?

Negotiate a fair price

When you’ve made your decision to buy, you can start the negotiating process. If you have a trade-in, keep the two separate and focus on the new car, factoring in the discounts you’ve researched. The dealer will have a list of fees associated with the sale; check that each is accurate and not an unnecessary add-on.

Finally, if something doesn’t feel right with the car or the deal, don’t be afraid to walk away.