September 24, 2019, by Taylore Bryant
Been thinking about starting a small business but not sure where to start? Pulling the trigger on your side hustle can be a daunting task, especially if you’re alone. That’s why we put together a comprehensive step-by-step guide to show you exactly how you can start your business for less than $1000.
How are we qualified to write this guide?
We’re Penji, a graphic design membership platform that provides unlimited graphic design at a flat monthly rate for thousands of small business owners worldwide. After designing logos, marketing materials, ads, and helping thousands of small businesses and startups get their business off the ground, we’ve seen just about everything.
We’ve witnessed massive startups with $242M+ in funding crash and burn due to poor marketing. And also have been along for the journey of a single-dad starting a small business in his garage with less than $1000 in his bank account, and later turning that into a multi-million dollar cash cow. We noticed a common thread among some of our most successful clients who had humble beginnings – they all followed a similar process. And we decided to document that process and write a step-by-step guide for anyone who wants to start their own business at home to follow.
Disclaimer: Please follow this guide with the following disclaimers in mind.
Time: 1-3 months | Cost: $0 | Remaining budget: $1000
Market research basically means you’re trying to figure out if there’s even a need (or a strong ENOUGH need) for your product/service. And once you’ve identified that there is a strong enough need, the next step will be finding out the specific audience that is most likely to BUY your product. You’ll find out that just because someone is interested in your product/service, doesn’t mean they will buy or will be good customers in the long run.
Doing market research can be a lot of fun. It’s an opportunity to learn about your industry, product/service, customers, and what their problems/needs are. Successful market research will yield valuable information enabling you to build a product/service confidently knowing that there’s a hot market waiting for you because your product/service solves a major problem they’re willing to pay for.
Why is this important? Would you want to spend 2 years building out your business and investing your savings account only to find out that nobody wants to buy your product? Or worse, your market is too saturated. By spending a few months doing market research, you save yourself a lot of time and headaches, and not to mention, develop more accurate insights into your industry. By the end of this step, you’ll know for sure if you should start this particular business, and how to position yourself.
DO NOT SKIP THIS STEP! If this is your first business, you can’t afford to skip this step (literally). You may have a fantastic idea or your side hustle seems to be making money for someone else, but that doesn’t mean it will work for you. Testing your idea first, researching the market to see if people even want your product/services will save you years of frustrations and the small marketing budget dedicated to market research will pay dividends later.
Here are the 3 questions you’re attempting to answer when doing Market Research:
There are several strategies for going about your market research and getting your questions answered. The following strategies will apply to questions 1 – 4. Questions relating to your competitors you can simply spend a few hours on Google and take notes or hire an independent party to conduct the research for you. I recommend doing it yourself to get acquainted personally with your competitors.
Develop a list of questions to ask
Before you start talking about your product/service, develop a list of questions and stick to these questions in order to generate consistent results. You can certainly add more questions or modify them as you go, but be sure to ask the same variation of questions so you can easily and quickly blast away whenever you meet someone you want to ask questions.
Depending on your product/service, tailor your questions to uncover at least the following information.
Be sure to keep accurate and legible notes of each encounter so you can review them later.
Start by asking friends and family
It seems obvious, but it’s a great place to start. No need to go far, start by asking your friends, family, and people within your immediate network. Just pick up the phone, start texting/calling away or schedule a time to meet with them. But make sure to get started. This is your first big step. Don’t hesitate, don’t wait, don’t procrastinate it. Just get out there and meet your first potential customer (but don’t sell) and start asking questions.
Go to events/places where your prospects may be
Go online and search for networking events where your prospective customers may be hanging out. Go there, meet them, and schedule a time for lunch or coffee to grill them with your well-rehearsed questions.
Analyze your findings
After you’ve spent 1 – 3 months doing market research yourself, you should have a stronger understanding of product/service, the industry you’re trying to break into, and your potential customers. Review all of the responses from your meetings and determine if you should move forward or not. And should you move forward, how you would position yourself to have a competitive edge against all your other competition?
Asking leading questions: Make sure you’re asking your questions in a fair and neutral manner and not accidentally leading the question.
ONLY asking friends and family: Yes I’m aware I said to ask your friends and family, and that’s a great launching pad. However, you will need to eventually move out of that circle and ask people outside your immediate network. Don’t stay in your friends/family network for too long. Your results will be biased.
Not taking notes while they’re talking: What’s even the point then? Don’t overestimate your memory. Get out your laptop or pen and paper and take notes while they’re speaking. People don’t mind you taking notes. If anything, it shows that you take their words seriously.
Time: As long as you need | Cost: $10 | Remaining budget: $990
So you’ve decided the market is ripe for you, you know who you should go after, and you have an idea of how to position yourself on the market. Now it’s time to pick a name. This step will teach you the process of choosing a name AND a domain name at the same time. Yes, you read that right. You must choose BOTH at the same time. Not one before the other. While thinking of a good name for your business, use a tool such as Learn Domain Search to see if a domain name is available.
It’s a common pitfall that first-time business owners fall into. Often times you’re obsessing over just the name and don’t spend any time researching the domain name, only to later found out that your desire domain name isn’t available. And then you end up settling for something ugly like “Mikes-mechanic-shop.com”. No one is typing that into the address bar. Not all names are created equal. In this section, I’ll go over the key strategies on how to choose a name that will separate you from all of your competitors and give you the flexibility to scale when the time comes.
Why is this important? Don’t just choose a business name without making sure there’s an available domain name available to purchase right away. By doing both simultaneously, you save yourself the headaches of trying to secure a domain name later on.
Choose a short name (unless you’re an attorney)
The shorter the business name, the easier it will be for your customers to remember and recall.
It’s unique and easy to remember
Be careful with unique. If you’re going to make up a word, make sure it phonetically makes sense and easy to actually spell. For example, if you’re selling cupcakes online, a name like KupKakes is going to be difficult for people to find or remember. Being unique is good, only if people can actually remember it.
There’s an available domain available
I can’t stress this enough. I’ve seen so many companies choose a name first and then try to find a domain to match it. They end up with something like “Seymour-chairs-co.com” or worse “Seymourchairs1.com”. Would you want to shop there? To avoid this mess, research both the domain name and the business name at the same time and ensure you have both.
It’s either a .com or .co
Don’t buy .net, .org, .biz (dear god please don’t use .biz), or any strange extensions. There are exceptions to the rule of course. If your business has something to do with streaming or television, then a .tv extension can work for you. But for most people, just stay with .com or .co for convenience.
And when purchasing a domain name, don’t let the domain registrar company (Godaddy, Bluehost, etc.) scare you into buying ALL the domains for all extensions for fear your competitors will snag your name. It never happens. Ever.
It’s flexible and doesn’t lock you into any particular product/service
Your business may change. You may decide to shift your product/service into a new market later. And the last thing you want holding you back is your business name/domain name because it’s too specific to one area. JoesChainsawRepair.com can never sell cupcakes. Keep this in mind when choosing your name.
You like it.
Make sure it’s a name that you’re proud of. A name that has a special meaning to you (not mandatory, but neat if it does). It’s important that you resonate well with the name and can wear it with pride for years to come.
Once you have chosen an awesome business name that also has a domain name available, head over to one of the following domain registrar to purchase your domain name. Ultimately the choice is yours, however I have my personal favorite, which I’ll list out the reasons why.
Godaddy: You’ve probably heard of them at this point. They do offer reasonable customer support when you need it, however beware, they do tend to cost more than everyone else, and I personally don’t like their upsell strategies.
Bluehost: Pretty good choice. They offer a good range of services should you need hosting/maintenance/emails/etc. But what I like most about them is their WordPress hosting. It’s cheap and reliable. So buying a domain name from them at this stage can be a good first step if you plan to use them to host your website.
Namecheap: My personal favorite. They’re fairly straight forward, offer the lowest initial rates for domain name, and also offer a plethora of other services. What I like most is that they give you FREE privacy registration (Godaddy tries to snag another $7.99/yr from you). Also, they have the cheapest renewal rates out of any registrars I’ve used. So when it comes time for renewing your domain name, you’ll typically save 40 – 50% just because you’re using Namecheap.
Choosing a business name that doesn’t have a domain name: You will regret this if you don’t do your domain name search at the same time.
Buying extra services for your domain: When buying your domain name either from Godaddy, Bluehost, or Namecheap, they will all attempt to sell you all sorts of extra services such as hosting, protection, emails, etc. It will look tempting (that’s the whole point isn’t it?), but you don’t need any of it. Skip everything and only pay for the domain name.
Buying ALL the domain extensions: When purchasing your domain name, the service provider will often try to scare you into buying .biz, .org, .xyz so your competitors can’t buy them. This is complete nonsense. I’ve never heard of one (literally not even ONE) case of any competitor buying up your domain names in different extensions. All this does is make the registrar company richer. Save the money, and make a donation to me instead for writing this guide.
Time: 30 mins – 1 hour | Cost: $0 – $125 | Remaining budget: $865
Congratulations on getting your domain name registered! Now it’s time for us to take the next big step and legalize the business. Don’t worry though, registering your business isn’t as complicated as you may think. It’s usually just a quick online form that you have to fill out and pay a small fee. Afterward, they’ll send you an official certificate in the mail and you’re good to go.
Why this is important? Because you’re a law-abiding citizen who wants to stay on the right side of the law.
How do I register my business? This will depend drastically depending on the state/country that you’re in. It’s quite beyond the scope of this guide, however, there’s an abundance of resources online that you can access. What I can advise is to make sure to do your research on how to register for a business SPECIFICALLY for your area. The entire registration process can be done online for most regions, and typically won’t cost you more than $125.
Which legal entity should I choose? Providing legal advise is beyond the scope of this guide. Choosing a legal entity depends on many factors. However, if you’re a first-time business owner just starting out, it’s just you and perhaps 1 other partner, and you’re NOT already a millionaire, then choosing an LLC will be your safest and most economical choice at this time. Again, please take that advice with caution and be sure to do your own research and seek legal advice where necessary.
Hiring a scam company: This isn’t difficult, it just looks like it. If you search “Registering business in STATE” on Google, chances are you will find a handful of companies that pretend to be government websites or 3rd party companies who claim to file on your behalf. Ignore all of these, and ONLY visit the legitimate government website of your state. Do not hire any 3rd party. They will ask you to fill out the same damn form anyway, except they make you pay for it. It’s easy to register your business, just take your time, and read carefully. You got this!
Filing as Sole Proprietorship: I can’t go into the full legal conversation why this is a bad idea, but don’t file as a sole proprietorship. It offers you 0 protection and there are very few reasons why you’d want to register as Sole proprietorship.
Filing for a C-Corp when you don’t need to: A C-Corp is a great entity if it serves your purpose. Don’t just register for a C-Corp if you don’t fully know what it entails, the actual expenses associated with it, and whether or not you even need it at this stage.
Filine for an S-Corp: Read this one carefully as it depends on your state. But if you plan to get investment money from Angels or VC’s, be very careful registering your company as an S-Corp. Do your homework, ask your CPA, and be extra careful when it comes to S-Corp.
Time: 1 week – 1 month | Cost: $0 | Remaining budget: $865
Now that you have a legally operating business, the next thing would be to spend some time to craft your brand messaging. Exactly how you will describe yourself, your business, your services/offerings, etc. You can go the long route and put together a 100+ page business plan, but that’s a bit out-dated. This method enables you to quickly put all of your ideas together and down on paper. And this document will be used on a daily basis and be something you can constantly improve upon as you go, unlike a formal business plan.
What is a Brand message document? It’s basically a document with a list of questions that you have to answer. Answering these questions will help you develop a brand identity. The completed document will contain every vital piece of content/copy/messaging related information about your business and can also be shared with others. You’ll find that you’ve already answered a lot of these questions while doing your market research, but you just haven’t sat down and written it in a clear and concise manner yet.
The purpose of the document isn’t just to answer these questions but to write them in a clear, concise, and professional manner. Whenever you need a slogan/description/tagline/quote, etc. you will revert back to this document and simply copy/paste.
Here are some of the questions that you must answer in your brand message document:
We also made a Brand Messaging template here just for you! Download Brand Messaging Template.
Time: 1 week – 1 month | Cost: $369 | Remaining budget: $496
With your brand document all completed, you should now be an expert at talking about your business. And you’ll also have all the vital information to explain to a designer exactly what you want your logo to stand for. Give yourself a round of applause. You’ve made it further than most people have! So far your business idea has been mostly inside your head and in cyberspace somewhere. It’s time you manifest it into the real world. It’s time for a logo!
Why this is important? You might be tempted to ask your friend’s high-school niece to help with your logo for $50. Or you might even be bold and try to design it yourself. Just don’t. Take it from us, we’ve seen many horror stories of over-zealous business owners who believe they’re saving a few bucks, only to later realize how ugly their brand is. The money you save isn’t worth it. Get your logo professionally designed, it’s one of the best decisions you can make for your business. And if you use Penji, it’ll only set you back $369.
Disclaimer: Ok we’re going to be plugging ourselves a bit in this section. You certainly don’t have to choose Penji to do your logo, but it’s the most affordable and best option for small businesses, and here’s why. Would you rather pay $300 – $1000 for a logo…and just the logo? Or would you rather pay $369/m and get your logo, business cards, flyers, T-shirts, brochures, marketing materials all done? Penji’s on-demand graphic design model is made for small businesses that are budget conscious and want the best bang for their bucks.
Yes, it’s literally $369/month for unlimited graphic design projects. That means anything and everything your new business needs, you can request from Penji for just $369/month. 15 day-money back guarantee. And you can cancel anytime.
How to get your logo professionally designed
Time: 1-2 days | Cost: $0 | Remaining budget: $496
You’re a fully registered business with a deep understanding of your brand. You’ve even got a kickass logo. The only thing you don’t have is an online presence. Listing your business online simply means registering your business on every social media and applicable websites possible in order to get your name out there and make it easier for people to find you. Even if your business doesn’t need a “following” to succeed, this step is crucial to develop an online presence and put your business on the map.
Why is this important? Makes it easier for customers to find your business and get yourself indexed online. The earlier you start this process the better. With enough patience, you can get through this in 1-2 days.
How do I list my business online? Have your logos, Brand messaging document, and an email (a regular non-domain email will do fine for now) address ready. Below is a list of all the websites that you should register your business on. The list is by no means comprehensive, so make sure to also do your own research and register your business on as many websites as you possibly can.
Should I pay to get my business listed? No. If a website asks for a fee, just skip and move on.
Business listing TEMPLATE (and how to use it): Here is a Template document with the list of websites you need to register your business on. When registering your business to these websites, they will ask for a lot of information. I’ve provided a template for you to use that should make your life easier. The top part of the template will contain all of your business information that you will need to copy/paste quite a lot. The bottom section will be a list of the websites to register. Fill it out as you see fit.
Time: 1-2 months | Cost: $0 – $20/m | Remaining budget: $476
Now that you’ve listed your businesses online, it’s only a matter of time before people can find you. But you don’t want them to end up on a deadline when they click on your website, do you? It’s time to create an official website for your business. For this step, I’m going to just walk you through a significantly simplified and diluted version of how this process actually works. And I’ll be assuming that all you need is a simple website to explain your product/service and that you don’t need a complex E-commerce or a website with intricate features/functionalities.
In today’s world, every business needs a website. In this section, I’ll be discussing several low-cost services that allow you to build your website for either free or as low as $20/month. And I’ll also briefly touch on how you can get set up with an E-commerce website should that be your requirement.
Why this is important? Your website is your always online and always available salesman. It’s your way of connecting to the larger world out there. And it’s also the easiest way to grow, scale, and offer your product/services on a global scale. And all of that is only possible if you have a well designed, well structured, and well-branded website.
You can build your own website if you have experience. Building it yourself, especially in WordPress, has the advantage that you’re in control and you can always fix/diagnose issues when they come up. It’s also significantly easier to grow and scale your website later when the need arises. WordPress is relatively easy to learn and a few Youtube tutorials can get you started on the right track. I’ve listed a few reputable resources below that can help educate you on building your own website.
You can also use a service that lets you build your own website via drag & drop. They’re easy to use, have a decent amount of features, and highly affordable. You won’t be able to add as many features as you want compared to your own custom WordPress website, but it’s a viable solution for those who aren’t tech-savvy. Here a few services that I recommend.
There are certainly more out there, however, these are the ones that I personally recommend. Be aware that although many of these online website builders give you a template to work with, there’s still a level of design and ingenuity that you’ll need in order to bring your website to life. Don’t be surprised if your final website doesn’t look as good as the template you originally saw. After all, this is a template, not a custom website.
If your website needs to have the best of the best or have very complex features, then your best bet is to hire a web design agency. I didn’t factor the cost of hiring an agency into the budget because this can range anywhere from $1000 – $100,000 depending on the complexity of your website.
If you’re going this route, be prepared to invest both time and money into the project. Your final product will always be outstanding and considerably more polished than an online website builder or doing it yourself in WordPress. It can be worth the cost if your business is exclusively online.
If you want to save a few thousand of dollars on your bill when hiring an agency, you can bring your completed designs to them, and then ask to just have the designs coded. This will save you a significant amount of money up-front. You can either design the website yourself if you have the skillset, hire a freelancer, or hire Penji to design your website.
Regardless of which method you choose, you will need content/copy for your website. Good thing you have your handy dandy Brand Message document all completed (right?). You’ll usually need to write the copy yourself to make sure it’s delivering the exact message you want to convey. And having your Brand Message document will make this process MUCH easier. You won’t need to struggle with how to present your business, what features/benefits you offer, etc.
Time: 1-2 weeks | Cost: $0 | Remaining budget: $476
Your business is now online, your website is good to go, now it’s time to figure out HOW to get your first client. Creating a marketing plan can be a tedious and expensive process or a fun and engaging one, depending on you. Now there’s plenty of templates and online guides on how to create a marketing plan and they’re all fantastic. You can check out The One Hour Business Plan, it’s a short book that details how to plan your business/marketing in an hour.
Or if you’re short on time, I’ve created a condensed version of a Marketing Plan for you. Just open a word document and begin answering the following questions, and by the time you’re done (can take a few days) you’ll have a strong idea of how you’ll begin marketing your business. You’ll notice a lot of the questions look familiar as you’ve answered them before in your market research. Use your market research findings to aid in this process.
Why this is important? A marketing plan enables you to figure out where to allocate your time/budget in order to achieve your sales goal. Without a marketing plan, you’ll just be sitting around praying people to find you and buy from you. Your marketing plan doesn’t have to be perfect, but you at least need a plan to start. You will inevitably modify/update or even come up with an entirely new plan later when you’ve established a stronger understanding of your market.
Marketing planning questions:
Time: 1-2 weeks | Cost: $50 – $200 | Remaining budget: $276
If you’ve made it to this step, congratulations! You’ve done what 99% of everyone around you wish they had done. All that’s left to do now is launching your business. This is the exciting part! Now this step can cost nothing, or it can cost a few dollars depending on you. You can buy business cards, flyers, pamphlets, and other marketing materials if you want. This is your big moment. You decide how you want to launch your business.
Before you start planning, set a launch DATE and commit to it. It can be a month or two away but just set the date. Then begin telling everyone.
The key thing that you need to remember when launching your business is that everyone needs to know about your business. You want to launch with a BANG, not just upload a Facebook status and call it a day. Here are some ideas you can steal to launch your business successfully and in a way where everyone in town will know your business is official.
Launching business ideas:
Time: Now | Cost: $250 | Remaining budget: $26
The time is now. Your business has launched. Everyone now knows you run a business and it’s online and ready to serve! Now it’s time to reel in that first customer and get ready to be an official business!
If your launch was successful, chances are you’ve already scored a few customers. But if you haven’t yet, don’t be discouraged. Now we open up our Marketing plan and get to work! Figure out how to find and target your customers and simply go after them.
Here are some strategies for you to include in your Marketing plan to guarantee you’ll get your first customer soon:
There are certainly many more ways to acquire your first customers but if you just do these 4 strategies, you’ll be in good shape. These strategies won’t make your business successful, they’re meant to help you acquire your first customer – and that’s it. The success of your business is much more complex and will require a lot more work from you to succeed.
You’ve done it. You’ve really done it. You’re now an official business owner despite the odds and you’re on your way to getting your first customer. We’re proud of you and would love to hear your success stories. If you’ve made it this far and your business has launched as a result of your trusting this guide, please do give us a shoutout on Social Media or email us at email@example.com.
Also, we’d like to celebrate a special moment with you and offer you a small gift. We’d like to offer you 35% off your first month of Penji with promo code IDIDIT. You deserve it. And we can’t wait to see you succeed!
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