Guest post by Bill Acholla.
Thanks to the proliferation of inexpensive, simple-to-use online software for accounting, human resources, customer service, and other common business functions, it’s never been easier for smart, ambitious individuals to start their own companies.
Why shouldn’t they go for it when many other visionary people have succeeded in starting some of the world’s biggest eCommerce platforms?
Success can come to anyone with a compelling vision and the willingness to make the investment of time, effort, and resources to make that vision a reality.
All you need is some motivation and solutions for all the difficulties you’ll face during the initial phase of starting a small business.
Example: Tim Chen, an Inspiring Figure for Aspiring Entrepreneurs
You can learn a great deal and avoid some potentially costly missteps by studying the experiences of modern startups, such as in the founders and entrepreneurs interview series here or the example of Tim Chen.
You might not be familiar with Chen’s name, but he offers a prime example of how to grow and scale a successful startup on a budget.
Chen is the founder of NerdWallet. He’s recently discussed how he raised money to grow his startup, how he used SEO to support that growth, and how content marketing has played a crucial role in NerdWallet’s success.
Chen studied economics at Stanford and then he started working at Credit Suisse First Boston, providing equity research to help clients make the right investment decisions. He assisted institutional investors in mutual funds, hedge funds, and pension funds to assess which technology companies they should buy or sell.
In that role, Chen learned how some business organizations are powerful in terms of their market position and how some businesses fight each other to gain a competitive advantage.
Chen’s corporate career crashed when the NASDAQ dropped by 50% back in 2008. He had no job and decided to try something different. Then one phone call changed his way of looking at his life and career. It was his sister, who wanted to learn about the best credit card available in the market.
He tried to help his sister by following the most obvious path “the online research” on Google. He was quickly overwhelmed with credit card marketing materials, but without a single guide leading towards a good choice.
Chen spent five hours preparing a spreadsheet to send to his sister. She used it then passed it along to several friends. That spreadsheet was a big hit and gave Chen the idea to convert it into a website. He used his programming skills and created a website and app using that spreadsheet. That’s how NerdWallet was born.
Today, NerdWallet provides resources to offer clarity for critical financial decisions in life. It’s been successful by focusing on information over advertising and Chen’s dedication to the quality of the product.
The original strategy for NerdWallet, relying on word of mouth marketing and organic press coverage, failed; the company made less than $100 during its first year.
So, Chen began calling journalists, learned new technology, and hired some intelligent people. NerdWallet started growing by 10% every month, and raised investments through several fundraising rounds. He made the right decisions at the right time, and eventually became the inspiring CEOs of a successful startup which is today a $500 million company.
How to Grow and Scale Your Startup Business on a Budget
Every penny counts when you have a tight marketing budget. You want to target the right people and convert as many as possible into active leads.
These five tips can help you choose the best marketing methodologies for your budget. In addition, Spendesk provides a useful template for marketing expense tracking.
- Use social media channels to validate your product.
New entrepreneurs often believe their products will naturally draw a huge number of customers online and offline. It’s what every visionary person believes, but there is no guarantee people will embrace your ideas.
If people don’t like your product, you’ve wasted your precious time and money. To avoid that fate, start by gathering feedback from your target audience on social media and other platforms to gauge the true potential of your product.
- Assess the benefits before you invest.
Honestly evaluate how your business will produce profits before investing any money into your idea.
Will your investment in a marketing tactic help you in attracting and serving more customers? If not, don’t spend money on that process, practice, technology, or service.
Maintaining a lean mindset will keep you humble and focused. Keep your costs low and make every dollar count.
- Don’t neglect the power of social media marketing.
While search engine optimization can make your website easier to find, social media marketing can provide you with genuine customers.
Social networking platforms offer the most affordable way of endorsing products and services. Every new startup is trying to leverage the potential of SMM and you should also consider investing in it.
Use the existing traffic and social media communities related to your niche to help you understand customer expectations.
You can emerge as a new solution for their demands. Social media doesn’t require a huge investment; you just need to maintain content quality and add engaging graphics in your posts to draw the attention of your target audience.
- Reward people when they promote your product.
Some smartphone apps ask you to share the same app with your friends to earn freebies. This is a marketing tactic adopted by many new startups to draw more customers faster.
You just need to encourage your customers to share your content and product details with other interested prospects.
Of course, the best way to encourage customers to share your content and spread the word about your product is to provide a great product and customer experience. But rewarding customers with freebies is also one of the most cost-effective ways of promoting a product online.
- Connect with influencers.
All of the largest social networks—LinkedIn, Twitter, Facebook, YouTube, and Instagram—feature well-known figures in different niches.
Some users have become influencers because they offer reliable information on products people want to buy. They provide relevant specs along with product pros and cons to help buyers make the right decision.
You may want to reach out to these influencers in your niche and explain to them your startup plans. The influencer might agree to promote your startup for a very reasonable price, or even just free access to your product.
People trust these influencers, and you can get a quick spike in your sales and subscriptions with the help of some well-known bloggers, video producers, Instagrammers, and social sharers. So, it’s important to do influencer marketing right.
To optimize the use of your time, focus on business vision and sales. Bring in other people, even on a part-time basis or contractors to handle operations and marketing. For example, hire a reliable individual who specializes in graphic design for startups in order to support your branding: get some appealing banners, brochures, and infographics to make your content more eye-catching.
Traditional outbound marketing approaches aren’t totally useless today, but that model is expensive.
You won’t have a huge budget for advertising or hiring marketing staff during your early startup days.
So, use digital marketing, SEO, content marketing, SMM, and other inbound marketing tactics to help keep your marketing budget low.
Tim Chen didn’t throw in the towel after making only $100 during the first year. His story is exceptional, but the tips above can help you create your own remarkable startup story.
It’s not easy, but keep calm and take advantage of today’s online technology to help keep your budget low and maximize your visibility in your target market.
About the Author
Bill Acholla is an experienced and highly skilled digital entrepreneur who has worked with some of the best and most recognized brands to build their online presence. If you want to promote your business through visual content marketing, check out his business blog at Billacholla.com for more actionable tips.