5 Tips To Building A Startup During Tough Economic Times
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Published on: 19 April 2022
Last Updated on: 20 April 2022
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Following the pandemic of 2019, it has become significantly challenging to run a startup.
The fleeting economy has made investments in multiple ideas, marketing to diverse demographics, and hiring employees on a large scale much more challenging.
However, don’t get disheartened yet. You can still set up and run a successful enterprise despite the recession.
In 2020 the venturesome business-minded individuals introduced over 30 million new businesses in the US. This number has since continued to rise.
So, if you’re ambitious and want your company to join this promising statistic, Texas is a great place to build your startup.
Therefore, to help you navigate your way through tight funds in a good business ecosystem.
Here Are 5 Tips You Can Follow For Your Startup To Emerge As A Successful Entrepreneur:
1. Explore Your Options
Before you launch a company, you need to know what niche appeals to you. You have many choices worth exploring, from food trucks to an online home business.
However, when deciding, plan the most suitable option for you. Even if you’re starting small, you still need to invest capital into your new company.
Apart from sufficient funds, you need a mixture of wit, creativity, and adequate education that enables you to bring your fantasy into a realistic light.
Over 90% of American business owners have a bachelor’s degree. The logical step is to acquire an MBA.
Hailing from this south-central region of the US, you can look into the Online MBA program at Texas A&M and pick up the skills you need to run your establishment.
With the right credentials to back up your vision, you should have no trouble starting a business. Here are some venues you can look into:
a. Food Trucks
The people of Texas are known for their massive appetite, so they can never get enough of the next big eatery on the block.
As a food truck business, you can sell any item as long as you follow your state’s list of acceptable items and invest in producing quality meals. There is no compromise for barbeque platters, spicy tacos, and even the delicious pecan pies.
Typically, mobile food service can cost you anywhere from $70,000 to $150,000 to customize the vehicle for your supplies.
If you go for a used truck with all the attachments present, it should cost you less than $40,000 to do a few touch-ups and start cooking.
In addition, make sure the food you sell is sustainable. Burgers, tacos, and Mac and cheese are relatively safe options and a street food favorite. With restaurants becoming more expensive by the day, the best deal to offer your consumers is a cheap yet quality alternative.
b. Online Stores
Platforms like Shopify, Etsy, and BigCommerce have made it easier to introduce sustainability.
So, instead of spending money on purchasing a physical location, you can pool all your resources into maintaining an online space. Typically, a digital venture can cost you anywhere from $18,000 to $40,000 in the first year.
This estimate includes getting a professionally built website, a domain name, and hosting rights.
Fashion is by far the most popular niche among American buyers. If you plan on selling commoditized items such as clothes, you may need to spend less than customized products like a painting for a client.
The main chunk of your expenses comes from supplies, products, shipping, and hiring workers. So, while deciding on a product, figure out how much you’re comfortable spending and work your way to building an online name.
c. Cleaning Services
When the economy becomes tougher, expect more people to return to work or try to stay late to keep up with the cost of living.
Therefore, they need someone to maintain their space. A cleaning service is a profitable business that requires affordable capital.
You may need to spend around $2,000 to $6,000 to set up your business model. This price includes cleaning supplies, labor, insurance, equipment, and marketing, making it cheaper than most industries.
Texas is an ideal location for a foray into the commerce sector. So, take advantage of this populous state. No matter what option you pick, make sure you research the niche, lock down the capital you need and build your business model accordingly.
2. Secure Funds
Your capital alone cannot sustain your company, and you need to secure additional money. While you can dip into your savings, start a ‘gofundme’, or request friends and family to help out, this may not be enough. So, turn to local financial departments for help.
Texas is the second-largest state in the US, housing over 2 million small businesses. Most Texas entrepreneurs receive over $60,000 in business financing from lenders.
To help you out, here are some organizations you can contact and pitch your business proposal to get monetary help:
a. Contact The Business and Community Lenders (BCL)
The BCL is a nonprofit organization that lends cash to homeowners, entrepreneurs, and community projects across the state. This company can loan you between $20,000 to $50,000 for a new business venture.
b. Look at Fundbox
If you want short-term credits for your new startup, check out the online financial company Fundbox.
The requirements to apply for a loan through this company are also more achievable. You need proof that your business has been operational for two months to get an annual revenue of about $50,000.
Additionally, you don’t need a minimum credit score to apply. If you have a bad credit score, this is an excellent opportunity to get yourself back on track. You only need to make sure you start making small repayments in 12 to 24 weeks.
c. Go with OnDeck
OnDeck is another online lender that provides loans according to your credit score.
Your company needs to be operational for at least a year to qualify for monetary benefits. Despite this strict regulation, you can earn up to $100,000 annual revenue, given that your credit score is at 600.
You get a longer repayment time reaching almost 36 months, providing sufficient time to invest and pay the money back.
d. Texas Capital Bank and Small Business Loans
Sometimes you may need more than small funds to invest in your startup. For instance, if you’re a tech company, you need more money to bring your products into the market and maintain them.
In such cases, you should contact the Texas Capital Bank. This bank operates in every major city in Texas and can get you up to $700,000 in the capital.
You can get small business administration loans, term loans, and lines of credit. Since this is a traditional bank, you must follow strict credit regulations and make timely payments.
Additionally, no corporate or individual income taxes get applied to business owners in Texas. This lack of taxation allows you to save up money and add it to your investments fund.
3. Minimize Costs
When the economy gets bottlenecked, you cannot spend as freely as you like. So, it would help if you minimized costs as much as you could to keep your organization afloat.
Reducing your expenses is also an excellent way to manage risks since you’re using selective techniques to look after your company. You should automate any task that can help you save on additional labor.
Business automation software, such as Zapier and active campaigns, help you manage projects, send emails to consumers and track your data. Automation can cut back on the workload by 40%.
Your cash flow also needs to be monitored heavily, so ensure your account statements are always balanced and you make payments on time.
Encourage your staff to work from home. If you’re an online business venture, hire a limited number of employees and delegate work accordingly.
Tough economic times are also not ideal for expansion, so make sure any experience that costs considerable sums of money is put on the backseat until the economy starts flourishing again.
4. Find Reliable Suppliers
Suppliers are an integral part of your business. These providers have the raw material and products you need for your company.
However, you have a range of supplies to choose from with different price packages and access to products.
Even if you’re on a tight budget, you can’t compromise on quality.
While a cheap supplier can give you a bulk of material cost-effectively, it’s not worth it in the long run. Your best strategy is to search locally and filter global suppliers to get the job done.
A quick trick is to use Google to match with relevant companies. It would be best to use keywords like “popular suppliers in Texas” or “high-rated suppliers near me” to connect you with good companies.
Once you have names, build on your research by looking at their certification, experience, and discounts. You also get greater control over the material keeping your costs in mind. Companies close to you can help you seal a deal for a cost-saving margin.
5. Understand Smart Marketing
Marketing is all about knowing what your consumers want to hear. You need to be specific and only use content that your demographics may find relatable.
For instance, the transportation department introduced the slogan “Don’t mess with Texas” in 1986. This slogan was targeted at Texas truck drivers to help reduce road pollution.
By invoking Texan pride, this department made sure the truck drivers did their part in ensuring communities looked after Texas and did not litter while on the road. You can do the same.
Depending on where your business is, you need to take time to understand the nuances of your local marketplace. If your company has local ties, don’t hesitate to show it off.
Most people in Texas love a good home story and love to strut their regional pride. As long as you don’t get political, use stereotypes on Texas politics or assume that southerners don’t know what they want.
When you know your audience, employ strategies like social media posts, videos highlighting the local culture, and run YouTube ads that showcase how your company aligns with the state.
You can even build a website that uses all local keywords to ensure the SEO works in your favor. This well-grounded technique saves you from wasting money on generic campaigns.
Final Thoughts
Starting a business in a shifting economy is an ambitious move.
However, you should have no trouble staying above troubled water with the right guidance.
Like any business proposal, it’s essential to explore what’s in store for you and what the audience wants. From there, you need to streamline cash to invest in your company.
Make sure you reduce expenses and stay on top of your cash flow.
Reliable suppliers can provide the much-needed back support to help you deliver a quality product or service without disruption. Marketing is about connecting with your consumers. Therefore, learn what they find charming and invest in those ad campaigns that help you reach your clients.
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