Starting an online business on a tight budget

Most people think that to be able to strike out on your own path as an entrepreneur, you need a bottomless pocket and perhaps the local bank on your side. In fact, this is not necessarily true. A lot of home-based start-ups don’t really cost a hefty sum because you actually invest more time and effort than money when you’re just beginning to do business.

It’s not impossible for you to build a business that has the potential to turn into a stable, large enterprise that can bring you lots of profits in the long run. You can actually start a business with nothing more than a couple hundred dollars, a brilliant selling point, a laptop and stable Internet connection. Web-based businesses are among the most effective and the most lucrative ways for you to earn extra income or to completely remake yourself as an entrepreneur.
So how do you start an online business today, even with your purse strings tied tight? Check out these simple steps:

  1. Formulate your company name and register your business. Even in the online world, you need certain legal and commercial requirements you have to comply with before you can start offering your products and services. Registering with your county or state will also help you find out if someone else is operating under the same firm name or logo, saving you the trouble of paying for new calling cards, official memo and product packages.
  2. Purchase and register your domain name. Stay away from free websites because you can end up with an unimaginative, long, ugly or generic domain name that will not reel your readers in and let them know you mean business. This will adversely affect the traffic to your site and prevent you from getting your return on investment in the soonest time possible. Your own domain name will probably cost you $10 tops, so there’s no reason for you not to afford it.
  3. Pay for a decent web hosting service. Just as a free domain is a no-no, a free hosting service is also something that you should avoid because it tells your readers that you’re too cheap not to invest in your own website. Taken together, your domain name and web hosting service is the brand that powers your company and helps your readers remember you. Some hosting services also come with built-in design templates and add-ons that can help you put together the best look and feel for your website. If you can handle the web design on your own, you can delay calling in a professional until you’re ready to introduce complex technical tricks and layout techniques. And of course, getting a professional to do the job for you means spending money, so if you can take care of this aspect of your website for a while, do it.
  4. Use SEO to help you drive site traffic. If you want a successful online business, you need to work with the right keywords that will help your website rank higher in search engines and bring more people in. It’s all about making sure that when your site turns up first when a user makes a keyword search for a particular product or item. Then again, search engine optimization will never be a good substitute for quality content, so you have to make sure that your posts are really relevant and informative for your readers. Upload fresh content regularly so search engines will keep pointing people to your site for specific keyword phrases.
  5. Engage in aggressive online marketing. What’s the use of having a website if people are not reading it? Your website will not advertise itself—you have to do it. Post in different forums, blogs, social media accounts and article directories to create back-links to your site and open more doors for people to come and see what you have to offer.

As you plan for your home-based business, you have to remember that cutting corners can only do so much for you. You can be frugal and you can bootstrap all you want, but not at the cost of sacrificing quality. There may come a point in time when you will need to shell out a sizable sum if you don’t want your business to look cheap and shoddy. For instance, at some point you may need a web designer to fix up your site and make it look even more professional.
Don’t fall into the trap of get-quick-rich schemes because they rarely ever give you the results they promise. Succeeding in an online business requires time and a lot of hard work so you have to be ready to put in long hours of planning and effort as you build your business.

Sources:
http://frugalentrepreneur.com/2011/02/starting-an-online-business-on-a-shoe-string-budget-avoid-these-5-pitfalls/
http://www.youngentrepreneur.com/blog/entrepreneur-university/starting-an-online-business-on-a-shoestring-budget-entrepreneur-university/
http://www.striveguide.com/starting-an-online-business-on-a-tight-budget/

About the Author:
Sarah Grace V. Villaflor is part of the team that manages and maintains Australian Credit Cards, a personal finance blog with complimentary small business credit cards comparison service based in Sydney, Australia. Before she joined ACC, she was an assistant editor-in-chief of Sandigan.