Innovating your way through a small budget can lead to huge returns.
Imagine using the free wi-fi at the public library to launch your small business.
Finn Peacock did just that as he set up his business on a shoestring budget. Peacock founded SolarQuotes with $500 and a credit card for advertising. Today, it turns over about $3 million a year.
Finn Peacock’s initial spend on Solar Quotes was $500.
“There is a lot of luck involved,” says Peacock. “I got my start-up going in 2009 which was just when the solar industry was taking off. And that was just a fluke – it coincided with me getting fed up with my government job.”
His initial spend of $500 went towards graphic design, coding and buying Google AdWords. “I put up the website, tested the concept and when it looked like it had legs, I started spending on the credit card.”
His next outlay was around $3000 on advertising. “I only did it after I was confident that I would get a return.”
SolarQuotes generates sales leads for solar companies, says Peacock. “Almost 300,000 homes in Australia have registered with the website to get quotes. We have about 200 solar installer companies around the country that are clients that we send business to every day.”
He says one of the good things about starting his business from a library was the lack of distractions and interruptions. “And I did run the business for another five years from the library, till I got my own office. I had the phone on silent in my pocket and I would sprint outside and take calls.”
Peacock also made use of other free tools. “I was very reliant on rentacoder.com – it was bought by Odesk.com, which is a site where you say what you need doing and people bid to do it. That’s where I found my first graphic designer and coder.
“We have got a very sophisticated back-end that drives the business now. But for the very first version of the site I used Wufoo.com – a form builder, you can pay for it, but I used the free version.”
Irene Falcone of Nourished Life beauty products.
Irene Falcone had an even more stringent start. She kicked off her business Nourished Life with just $100 in October 2012. Last year, she turned over $8.7 million.
“I bought 100 lip balms for $US1 back when the Australian dollar rate was around $1.05 to the US dollar,” says Falcone. “I sold them quickly for a good margin and reinvested from there.
“I sold my car for $10,000 and I had $20,000 left after selling my house and paying out the mortgage, I invested this into more lip balms and other products.”
Her revenue in her first year was more than $300,000. “The following year I turned over $800,000, then in 2014 I hit $1.9 million and last financial year, $8.7million.
“This year I am on track for $20 million. And I am planning to grow to $30 million in the next two years.”
Falcone used a WordPress blog and Facebook page, which are both free tools, to communicate with her customers. Other free web services she utilised were Pinterest and Tumblr.
She says Nourished Life now sells more than 3000 toxin-free, eco-friendly products.
Falcone recently won the entrepreneur award at the 2016 Telstra NSW Business Women’s Awards.
Elise Hendriksen and Stephanie Hill of InSalt
Stephanie Hill and Elise Hendriksen launched InSalt with less than $2000 in May this year.
To launch the company, which produces all-natural bath soaks, Hill tapped “a lot of people who are good in the things you might need, aside from the administrative costs of setting up the business registration, ABN, tax file number, all of that, which is not very expensive”.
“Things like our logo, which is professionally designed, was done by a former colleague and good friend of Elise’s. All of the photography was done by a friend, who is a professional photographer.”
Sourcing modest quantities of the raw materials was one cost-cutter. “Certainly being able to source smaller quantities to purchase in the short-term and negotiating the price for this volume was a big part of it. Also operating it out of a home – we don’t have an office and to pay rent.”
They focused their marketing on social media, particularly Instagram, and to a lesser extent, Facebook.
One of their key learnings was packaging. “Labelling was a bit of a learning curve for us because we put probably $150 to $200 into designing and printing the labels ourselves and they didn’t look professional. We spent $600 or so on professional labels that give a nice feel to the product.”
Hill says they have broken even and are expecting about a 50 per cent increase in orders through the November-December period.
Layla Roberts of Concierge Connections
Time versus money
Layla Roberts started Concierge Connections six years ago for less than $1000.
Roberts helps busy mums and mums-to-be tick off their to-do lists. “All I needed at the start was a website and a logo, which a friend kindly did for me free of charge, ABN registration (free), ASIC registration, business cards from Vistaprint, insurance and web hosting.
“I have designed my current website myself using WordPress. It cost me about $250 including the theme, plugins, template and hosting.
“These days my running costs are higher than they were at the start, but not by much. I pay to attend networking events and for advertising such as on Facebook. And I do most things myself, such as my tax return, sales, social media marketing, only outsourcing when I don’t know how to do it.”
She has expanded her enterprise with the launch of sister firm Sydney Concierge in 2015. She is expecting almost 50 per cent combined growth in revenue from the last tax year.
Roberts says running a business is a trade-off between time and money. “If you throw money at a problem, it will usually, but not always, get done faster. For me the enjoyment is often in the journey as well as the destination. I enjoy learning how to run all aspects of my business, such as web design and SEO.”
[The Sydney Morning Herald]