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Shoestring startups show resilience with a third of companies founded on 250

Praseeda Nair | 5 July 2017 | 7 years ago

A smiling and positive hipster man turning an opening sign on glass front door of coffee shop with reflection of street in glass
A lack of funding was cited by 40 per cent of Britons as the biggest barrier to starting a business
A new study demonstrating the long-term potential of shoestring startups founded on tight budgets has challenged the expectation that a business needs significant financial backing to succeed.

The research, undertaken by Yell Business ahead of Independent Retail Week, surveyed 1, 500 small UK business owners to find out how much new ventures were costing to launch.

Some£40 per cent of companieswere founded on under 500, while a third managed to take off with funds of just 250.Meanwhile, 93 per cent reported they had recorded a profit in the past year.

Yell Business also surveyed 1, 500 UK consumers to gain an insight into attitudes towards the entrepreneurial world.

Over half of the population admitted they had considered starting a company of their own and almost a third unhappy with their current career but several risks were commonly cited as holding back a new wave of business owners.

With 40 per cent of the vote, insufficient funding was far and away the biggest barrier to starting a business. A risk of failure was also keeping a quarter of would-be founders from following their dreams, while 23 simply didnt know where to start.

Commenting on the success of shoestring startups, Mark Clisby, Yell Business marketing director, pointed to inherited funds and redundancy as current catalysts for new founders.

hopefully, the positive revelations around low startup cost and high success, will give the inspiration needed to budding entrepreneurs, so that they don’t wait for scenarios like this to happen to them, he said.

Offering pointers to potential business owners, Clisby said thorough research into the market and taking a digital-first approach were crucial starting points.

from a website, social media to reviews, this is essential for any business in 2017, he added.

With 85 per cent of founders claiming their own venture had seenat least moderate growth, the evident success of shoestring startups might be enough to spark those ambitions into life.

Puttinga shoestring startup on a platform for success

One business owner firmly in the 33 per cent is Neil Bainbridge, founder of music PR firm?Neighbourhood, a company?that has grown to now represent major clients such as Warner Music and Universal Music Group. Bainbridge recalled some of the key early decisions that shaped the future of his firmto offer some advice to aspiring entrepreneurs.

“Founding a company is of course challenging. There is ahugerange of assumptions of what needs to be done and in what order. For example, the early predicament ofestablishingtone and vision for the company you want to grow into over time, yet creating enoughflexibility in the brand to avoid’suppressingnew opportunities and direction.

as a service-based company the onlyadditional cost to bear was my own solo time and effort, so 99 per cent of any firstexpenditurewas spent with the above in mind. The same rule wouldhave applied ifI would have had access to 250 or 2500.

Bainbridge explained that getting the right first impression in terms of visual aesthetic, tone and guidelines was essential in those early stages.

making the day-one choice of dropping PR? in the logo of Neighbourhood was one of these decisions. We never want to dilute what we do as a PR agency, so you won’t find usclaimingto be marketeers, creatives, SEO consultants or designers as many so-called PR companies do. We wereinitiallyconscious of that first perception.

public relations by default is a trade that isconstantlymoving and redefining itself, so our look and logo always needed toaccommodate that.

from an image point of view, Neighbourhood’s companyaestheticfundamentallyneeded to support the fact that the best work we do is almostinvisible. For the first two years of Neighbourhood, wedidnthave a website. Just aholdingpage with a logo.

we are all toofamiliar with the line dress for the job you want, not for the one you have. I think laying down thefoundationsof what can become company guidelines can learna lot from that.

Megan Allen, founder of Rural Roots PR, was another entrepreneurial publicist who started her business “from scratch” with just 250 in the bank.

I invested the into the website domain, hosting and some business cards, ” Allen told Business Advice, who then had to teach herself to build the company’s website.

“I took a part-time job to help me fund the business as I still had a mortgage to pay, and joined a local networking group. Within three months I’d given up the part-time job and was working for myself full-time, ” she added.

I honestly don’t know what I could have done differently and I’m proud of what I’ve achieved in just over a year.”

Sharing her words of wisdom for fellow founders, Allen said: “Learn as much as you can yourself to start with, and when you’ve got some capital behind you, invest in professional services to boost your business even further.”

Instagram founder Mike Krieger‘shares startup stories with Made in Chelsea entrepreneur

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