by Robert Grice

Created on: December 23, 2009   Last Updated: December 25, 2009

How to Start a Business with Little Money

“An entrepreneur assumes the risk and is dedicated and committed to the success of whatever he or she undertakes.”

-          Victor Klam 

What better time to start a small or home-based business than in a recession when financial uncertainty abounds? The problem for many would-be-entrepreneurs is to set up and finance the business with little money. Remember the 4 M’s of starting a business on a tight budget. 

Mission Management Marketing Money

Mission

Mission is the first “M” or key component of starting a business. The mission is the purpose of the business. The mission of the business should be clearly defined and supported in the business plan. The business plan includes the vision or mission statement, the feasibility of the business, the people involved, a profile of the business including policies and procedures, and an economic assessment of potential costs and profits. The entrepreneur can save money by writing the business plan rather than seeking a professional. Numerous helps are available for doing task. 

Management

Management is the second “M” of key component of starting a business. Much of the company set-up can be performed by the entrepreneur as a means of saving money. The Small Business Administration (SBA) offers a step-by-step process in setting up and managing a new business. One of first steps is to decide which type of firm the entrepreneur wants to form.

The SBA website provides an excellent discussion of the various options available. The options vary mostly determined by how the entrepreneur wants to handle profits, mitigate risks, and control the company. Online legal firms provide low-cost legal services for setting up business.

The most common type of business formed is a limited liability company (LLC). The benefit of the LLC is that it provides the entrepreneur with the benefits and flexibility found in a sole proprietorship and the limited liability for company debt afforded in a corporation.

Quality management is required regardless of the cash-flow of the business. Businesses normally experience cycles of profitability and recession. Entrepreneurs must develop a full range of management skills from developing customer loyalty to playing accountant. The priority for entrepreneurs is to foster customer loyalty by quality customer service and to implement strategies that encourage

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