From the very start of creating The Collective, I never wanted to shrink. I had a big voice but a small budget, and so I had to find back-door solutions to financial problems.
I am not a fan of investing in time-zapping, expensive prototypes or the kind of complex business plans that make War and Peace seem like a quick read. Not at first anyway, not until you know for certain an idea has legs and is worth investing in financially and emotionally.
This is where the practice of making money from nothing comes in – and by “nothing”, I mean just an idea.
I come from the “fail fast” school of entrepreneurs. I am at peace with the idea that not every idea works, but I do want to lose as little – financially and emotionally – in that loss as possible.
Here are my tips on setting up a start-up on a shoestring:
Keep your overheads low
For me this means relying on an army of freelancers to use when and, most importantly, if we need them rather than having a large in-house team whose skills might not always be required day after day, but whom you’re always paying (more on this in chapter eight on risk and resilience). A freelancer might take two weeks or two hours to do a task, but it’s not on your head (or your overheads) because you’re paying them by project no matter how long that takes.
Hit the ground running
As a small business you DO NOT have time to shuffle paper around. You need to start selling from day one. No exceptions. If you doubt your idea perhaps its better to put a pin in it and pursue another idea that you can believe in. As I wrote in Daring & Disruptive and elaborated on in this chapter, I see many start-ups make the mistake of pumping money into prototypes, testing and elaborate business plans before they even know if an idea has legs. Test early, seek out brutal feedback and be prepared to move on if you need to.
Pay in perks
We ran an article early on around the topic of “start-up slumber parties” about companies, such as World Lister in the US, that instead of paying staff a wage, rented a huge house for staff to live in rent-free and supplied food for their team.
According to the founder, this was far cheaper than paying multiple salaries, and all of his team utterly loved living together (hmmm, not sure this would be for everyone). It might have helped that the shared house was on the edge of the beach with its own jetty.
Leverage – anything!
In all my books I talk about the importance of value exchange because it is so important. What do you have to offer that’s non-monetary? In this day and age it’s all about attention. How can you boost someone else’s profile using your product or service, and how can this be leveraged to convince them to build a partnership? ‘Value exchange’ are the two most important words we have lived by in growing our brand.
Overestimate expenses, underestimate revenue
It might seem like a contradiction, but to have a long-running business you need to be an eternal optimist who plans for the worst-case scenario. When I launched my book Daring & Disruptive, I was prepared to make a loss and budgeted accordingly. What a surprise when it started to bring in AU$7000 a week of unexpected revenue (just from our web sales alone).
Piggyback on power
If you’re selling a product, don’t wait until you have the funds to build a website, instead leverage the ready-made community of sites like Amazon, Ebay and Etsy. They’re the perfect place to road test a product with minimal risk and also offer data on your demographic, such as the countries where most of the people viewing your items live, which means you can tailor your marketing accordingly.
Lisa Messenger is the founder and editor-in-chief of The Collective. After working in sponsorship and events, PR and book publishing, in 2013 she launched The Collective. Under her leadership the business has grown rapidly into a multi-media brand to more than 30 countries.
This is an excerpt from her latest book: Money & Mindfulness: Living in Abundance, which is out October 1, 2015.
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