Just recently, The Chartered Institute of Personnel and Development published a report that predicted unemployment will continue to rise throughout 2012, and only begin to get better during 2013.
As we all know, unemployment is bad news for the economy.
People have less money to spend due to being out of work, which means companies make less money, which leads to further unemployment, which impacts further on spending, and so on.
It’s a vicious circle – one that we need to break out of.
But how do people earn more money, when there are fewer employment opportunities?
The simple answer is: start-up on your own.
If you can’t find someone to pay you, pay yourself.
But how do you start a business when you’re unemployed, with very little money to invest, and at a time when the banks aren’t lending?
The simple and honest answer is – it’s tough. Not impossible. But it’s definitely tough.
You need inspiration, determination, and perseverance (along with a pinch of luck). But it most certainly can be achieved.
I can’t help you with your determination, perseverance, or luck, but what I can do is provide inspiration for you to start your own business on a shoestring budget.
My very first business I set-up at 16 years of age, with just £100. I was able to make a good income out of this business and sold it 6 months later to a large accountancy firm. So I know it can be done.
Here I’m going to explore 2 potential businesses that you can set-up for less than £100 (and they aren’t your typical low-cost business suggestions like PR consultant, or web designer, either). These 2 ideas require no prior experience or knowledge – anyone can do them, and they are both suited to potentially thrive in the climate we are currently surrounded by.
1. Social Car Rental
With almost everyone falling on tough times, we’re all looking for ways to maximise our income.
Why not capitalise on this demand, and offer people the opportunity to monetise one of their biggest expenses – their car.
The concept:
Establish a group of people who are willing to rent-out their vehicles to other drivers when they don’t need to use it themselves.
One in five households have sold their second cars (and some have even sold their only car) as a means of saving money during the recession – meaning there are now 20% of people who used to drive, without a vehicle. See this Telegraph article.
You would therefore be attempting to marry-up the people that don’t use their car all the time, but have decided to hold onto it during these hard times, with the people that sold their car but still need access to one every once in a while (and have the necessary license to drive one).
How you could do it:
Establish a company for credibility, have a cheap website built using ODesk, have some professional brochures/leaflets designed and printed (don’t forget to consider insurance and damage concerns in this, and be clear on how this will work), invest in some smart clothes, then, spend a week or so constantly knocking on doors and gathering contact information and sign-ups for your database of car owners willing to take part (don’t forget to record when their cars will be free, and where they will be parked).
Once you have this data, have some professional leaflets printed advertising the use of local cars for short periods of time, from £X per hour (or per day). Place these on bus stops around town (although be prepared for a call from authorities to take these down after a little while), train stations, and other areas of public transport. Also, take advantage of notice boards in local shops etc.
Then, be prepared to answer your phone and coordinate each rental and collection – organisation will be key to your success.
Dangers and precautions:
Ensure you and your company are not liable for any potentialities (i.e. theft, damage), but also ensure your customers who take part are equally covered for these potential incidents and make sure you are fully aware of the processes to go through, and the preventative measures you should undertake, for any potentiality.
Insurance is obviously key here, and you need to explore how you can possibly arrange insurance cover for people for their short rental periods in partnership with a reputable car insurance firm (as customers will certainly not want to handle this themselves).
2. Second Hand Clothes Store
With everyone looking to maximise income, selling second hand goods (including clothes) has become a popular means of making more money.
Similarly, when making purchases, people who are hard-up will be looking for the best possible deals – and often this means buying second-hand items.
The concept:
To marry-up the above markets, and take second hand clothes from people looking to sell, and present them to those looking to buy.
How you could do it:
This doesn’t necessarily mean using a physical store front (and unless you can find a phenomenal local business support program, this will be an impossibility on a budget of under £100), but you could start by developing a cheap website on ODesk, have some business cards made, and use existing online sales channels with little up-front cost like Amazon and Ebay.
Go door-to-door around your local area asking people if they have any clothes they would like you to sell for them.
But, instead of paying them up-front, give them a business card and an agreement of some form (find a free, standard legal agreement online and modify accordingly) that says you will pay them a percentage of the sales price (so remember to keep each person’s details on-file and know clearly which items came from which person).
Then, once you’ve accumulated a stock pile of clothes, get listing on eBay, Amazon, and your own website.
You could do this with anything, not just clothes.
Yes, people can sell their own items themselves. But when you’re on their doorstep, telling them you’ll take them off of their hands right away and do all of the hard work of listing them and dispatching the items for them (not to mention the added value you are delivering by listing on your own website too – something they won’t have), I would be confident enough to say that a lot of people would take you up on this offer.
Dangers and precautions:
Your agreement between you and your clothing providers needs to be crystal clear and transparent, to avoid confusion and boost confidence in them handing their possessions over to you (especially with no payment up-front).
Returns could cause issues with your finances if you aren’t careful. If you pay your clothing supplier, then receive a return shortly after, your supplier may not agree to give you the payment back – so make sure your return terms marry with your payment terms to suppliers – leaving you with no window of liability.
So, there you have it – a little bit of inspiration to get your creative juices flowing.
Question to the readers
Have you got any low cost business ideas you wish to share? Please tell us about them.
