What were the practical steps you took to start a business on a tight budget?
We bought cheap, small equipment at the start. Then, once we had an idea of what we actually needed, we spoke to other traders to get more advice before investing the money we made into that equipment.
It’s very important at the beginning to live within your means as a business. You may have big dreams, but we’ve seen others come in and spend a lot of money on loads of equipment, half of which they end up never using – it’s just money down the drain.
If you start small you get a much better idea of what you actually need and where to get the best deal.
The same goes with new sites and staff – only do what you can afford. Do the maths, see if it’s feasible. We learnt what was and what wasn’t through experience and sharing experiences with other traders.
Once you’ve made one bad investment in an area where the rent is too high, you learn pretty quickly what to look for in a site: where is it, what are the costs that make the rent high, how many staff will you need to be there, what are the times you can trade there, have they done it before, how are they marketing it, who are the other traders there, etc.
The list goes on, but it shows how many different factors go into finding good trade in a location.
Having a good idea of your numbers is important too. We used accounting software FreeAgent, which clearly showed us where we were overspending and helped us become profitable week by week.
What was the outcome?
Three years later we have carried on with this format with every investment we do.
Whether it’s equipment, new market sites or new suppliers we take our time and do it methodically, ensuring that we’re providing the best service we can whilst still running a healthy business.
What three questions should cash-strapped entrepreneurs consider when investing in sites, equipment and staff?
- After all your business costs, have you got the money to spare?
- How much do you need it, whether its a new location, new equipment or a new hire?
- How much longer can you go without having a new site, equipment or extra staff?
What one piece of advice do you think entrepreneurs should take on board?
Live within your means as a business. You’re not a hero by taking on more debt or higher rents than you can afford.
Is there anything you would do differently?
At the beginning we said yes to too many things, which resulted in being at markets where the rent was far too high for what it was.
