Every year loads of small businesses are launched in the hope that they will go places, but more than half of them shut down by the end of the first year. It is not surprising at all that many entrepreneurs embark on their journey with full spirits only to find that they do not have the potential to run it. The fact that you have enough money to invest in your business does not insinuate that you are capable of running a business.

Even if you are looking forward to a business with no capital, a little bit of funds is necessary to maintain a proper flow of cash to hit the ground running. Your business is more likely to be successful when you have a great business idea and the basic skills to maintain a smooth cash flow.

Ways to launch a business successfully with minimal capital

Here are the ways to launch a business successfully in the UK without a whopping of capital:

• Do not reign from your current employment

Amid the excitement of your business, you may be tempted to step down from your current employment. It can be a huge mistake. Normally, businesses without capital do not need round-the-clock attention, so you can handle them in the morning and evening hours.

Your business will not start making profits immediately. It will take a few months to hit the breakeven point. You cannot quit your job until your business starts generating profits. Quitting your full-time job is an ideal choice when your business is in full swing and generating enough profits to cover all expenses.

• Choose an idea that requires low upfront capital

There are various types of ideas to pursue for your business, but not all of them can be started with low capital. Service-centric businesses are way easier to get started than product-centric businesses as they do not require too much capital. The following are the business ideas that may inspire you:

• Consider offering writing services. Once you build your client base, you can decide to open a company and build a team of writers.
• Graphic designing and social media management are in demand. You will interact with followers of your clients on social media and help improve their sales. Start-up companies contact graphic designers for their logo and banner designs and the whole social media kit.
• You can think of becoming an online teacher. It requires a lot of effort to get a teaching business started.

Choose a business idea you think you have complete knowledge about. Half knowledge will sink your business before getting it off the ground.

• Create a business plan

A business plan is a must even though you are looking to start a service-based business. A business plan is a roadmap to tell you how you will reach your goal. Your lender will also refer to a business plan when you apply for a business loan in the UK. Make sure that your plan consists of the following information:

• Your target audience
• Marketing methods
• Ways to reach out to your audience
• Any team of people to be built
• Expected profitability
• An alternative payment plan if your business fails

Your business plan must be explicitly laid out to help lenders take stock of how likely your business is to survive down the line. Your business plan cannot be made in a shoddy attempt. You will have to do proper research. Try to answer the following questions before embarking on your business:

• How much will it cost you?
• How much should you charge your customers?
• How will you increase your sales?
• Does your product or service have a unique selling point?
• Can you offer your product or service at competitive or lower prices than your competitors?
• Is your business suitable for all seasons?
• What if your business fails before getting off the ground?
• Do you need to hire people? If so, how much will the payroll expense be?

A business plan should be created after careful market study.

• Analyse the competition

Market research will help you know whether your business idea is viable. It is likely that the product or service you have picked has no demand. Analyse the prices your competitors are charging. Make sure you do not overcharge. Identify a unique selling point of your product or service that stand out from the crowd and use it while marketing your business. You will be able to come up with an effective marketing strategy to analyse the competition.

• Test your business idea

Just because you think you have a great business idea, it does not mean that it is viable. Before investing your savings, you should test your business idea. You might be beating the dead horse.

Whatever the product you are offering, give away some samples. Let people in your acquaintance group try it and ask them to give you feedback. Make sure you contact people who are not biased with their opinions. Honest and critical opinions will go a long way.

For instance, if you have decided to bake biscuits at home to sell them at local bakeries, make sure you take feedback about your biscuits. Samples should be given free of cost, so bakers do not hesitate to let people try your hand-made biscuits or cookies. Continue baking when you receive a positive response.

• Look for alternative funding

Undoubtedly, you must have some savings to start your own business, but as you grow, you will need to rely on external funding as well. Unsecured business loans in the UK can fill the gap, but your lender will carefully examine the profitability of your business. Even if your business has not touched the breakeven point, you should be able to make payments.

Consider other alternatives, such as borrowing from friends and family and crowdfunding if you find business loans quite expensive.

• Brush up on skills

It is likely that you are completely competent to run your business. For instance, if you decide to provide graphic designing services, you must have knowledge about designing. Maybe you will have a team of expert designers, but despite that, you need skills. How will you shortlist them?

The bottom line

You can start a new business with minimal capital, but make sure you choose an idea that is viable. Despite the fact that you have enough savings to invest in your business, you may need to rely on external funding sources as your business scales up. Carefully execute so you do not end up shutting down your business.