How to start, run and grow a profitable online business with only a $5,000 capital investment

Last Updated on – Apr 17, 2020 @ 11:46 am

Starting a business is not as difficult as many people imagine. Coming up with a business idea could be a bit challenging at first, but the real challenge comes in once you’re already running and thinking of ways on how you can scale your own business.

It takes a lot of courage, experience, luck and surely a lot of failures to really have a thriving business.

I personally failed twice (big time) in trying to start my own business in the past, but of course, alongside those failures are valuable lessons that I’m able to apply now. Because the undeniable truth is – failing will always make us better.

Although, I’m still in the process of learning new things from running my own digital marketing agency (up until now), and I’m sure that there’s still so much more to learn.

That’s why I tried to pick the brains of some of the smartest people I know, and asked them this one hypothetical question:

Let’s say you have to start all over again, and you only have $5,000 left to spend. Where will you invest it, what new business will you start, and how will you grow it in the next 12 – 24 months?

Let’s face it, knowing other people’s perspectives and exit strategies when starting all over again (especially when they already made it big) are far more useful – given that their possible next route will be a lot safer and certainly profitable based on what they’ve already achieved in the past.

Note: This expert roundup was originally published back in 2014. I’ve decided to republish it because many of the advice I received are still applicable and ring true up to this day.

Benj Arriola

Benj Arriola is the SEO Director at Myers Media Group. Benj has been practicing SEO since 2004 and has also spoken at several conferences in the US & the Philippines such as SMX & Pubcon.

I will first give my answer where I will start all over again my businesses and assume they all failed but I still have a job. My second answer would be what if aside from failing in all my businesses, and I also do not have a job.

Situation 1: Lost my businesses but still have a job – My $5K goes to the stock market

There was minimal downtime for me after graduating college in December 1993 from De La Salle University – Manila; I was immediately working as a chemist in January 1994.

Since my very first job up to today, finding a job was not really a problem and over the years and several career changes, I have climbed the corporate ladder and make it to certain positions where I can live and support my family comfortably.

Although I have several small businesses that do help out in everyday living, if I lose them all, they don’t hurt that much in my current status in life. So hypothetically, let’s say all my businesses failed and I have $5K, what will I do with it? I’ll invest it in the stock market.

The stock market all seems like a mystery in the beginning and when starting out and has no financial background at all, you get more doubt and fear that you will lose all your money. The stock market just looks risky, but risk is relative to knowledge of what things are and how things work.

If I am told by a circus animal trainer to go into a cage of lions and train them by myself, I’ll probably die, it’s too risky. The animal trainer that is more knowledgeable will probably survive because he knows what to do.

My current job is doing search engine optimization or SEO at Internet Marketing Inc. where I help improve online conversions and revenues of companies by bringing in more qualified traffic from search engines going into their websites.

This is something that I know doing so it isn’t that risky to spend time, money, and resources doing this. But if you do not know how to do this and you have to spend money trying to get results it might be too risky for you.

All I did to learn more about the stock market initially started with reading books, watching Jim Cramer on CNBC’s Mad Money, and reading online resources. It was hard and learning was a bit slow. What sped up the learning process was from my corporate finance class when I took up my MBA at the University of Redlands – California.

We traded with fake money, do analysis and decided on what stocks we buy and sell and this prompted me to use real money on my own starting outside of the class with an amount within my risk tolerance. Starting with $1,000 it turned into $1,100 after a week.

I then increased my funds to $3,000 and after a month I got back $3,300. This is not easy money by the way and even if I was getting back 10%, part of it was being lucky with my initial decisions while I was learning.

The value of my money was not always going up, it was also going down, and I was too emotional with my trades with less analysis. But even if I was doing it wrong, when I sold my stocks to cash out, I still made a consistent 10% profit.

To improve my knowledge, I enrolled in an expensive class by Rick Dad Education which really helped but the class cost ate up much of my initial investment money and has not been trading lately because of this along with everyday family expenses, and vacation planning.

But if $5k suddenly lands on my lap today, it will definitely go back to the stock market and I feel confident of consistently getting back 10% every month of maybe even more often and since this can compound over the months, the earnings will be larger.

Situation 2: Lost my businesses and lost my job – My $5k goes initially to online media / advertising for some affiliate marketing.

I now have a family to support, and any income downtime is crucial. Although the stock market can make money, I still have to play it safe and sometimes the indicators may show that my earnings may come when I cash out after a few weeks to a few months.

I do not consider myself a day trader that can make money in a day and is not confident in doing that. Since that is that case I have to do something that gives me more stable income. Hosting and domains are relatively cheap these days and you can spend less than $50 a year for a website.

I’d probably use WordPress and start with a modified free template to minimize cost and for fast delivery as long as it looks decent and professional. I will then choose an affiliate product to market, something with a high return, and is not much saturated.

I won’t spend much time in choosing the best one, I just need something that is promising with my initial research in a day so I can get running the very next day. Although search engine optimization (SEO) is my expertise and I will still do this for my site, but just to get the traffic rolling as soon as possible, I will spend $2,500 on Google Adwords for the promotion of my site.

Since I do not have a job, I will be in the account daily, optimizing the campaign to minimize cost and maximize conversions. I will allot $200 for WordPress plugins that will improve landing pages instead of my spending time to code and improve the landing pages.

After the first month, the performance of the campaign will dictate the direction of where the rest of my $5k will go. It will set the parameters for my daily spending and it will also all depend on the profit I gain after the first month.

All of this done with the assumption that I cannot get a temporary new job to fill in the possible gaps of failing a few times in the new affiliate business.

Although I find this very unlikely since I do have many employment options with the knowledge, skills and experience I have gained over years where I can work as a: laboratory QA chemist, R&D chemist,  chemistry professor for college and high school level, science or math teacher or tutor for high school or elementary level, computer technician, graphic artist, web designer, web developer, application developer, IT professor, internet marketing specialist, analyst, consultant, or strategist, science research assistant or teaching assistant, and if all fails, I do not mind flipping burgers in McDonalds while planning out the next best thing to do with my $5k.

Zeph Snapp

Zeph Snapp is the CEO of Altura Interactive, a digital marketing agency that focuses on Spanish speaking markets. You can follow him on Twitter at @ZephSnapp

So, I am going to answer this question as if I was starting the same business over again, because I can give you the main actionable item that helped dramatically improve the performance of my business.  Also, I don’t want any of you stealing my ideas:

Go to Mozcon.  Before Mozcon 2012, most of my clients came from eLance, Freelancer, and referrals from clients on those platforms.  That meant that my retainer fees were very low, which made it very difficult for me scale my company and hire more people.  I knew that the best way for us to grow was to build alliances with other agencies that would drive referrals and white-label projects, but I hadn’t made the connections.

At the conference I had the opportunity to talk to many influential people, and one of them gave me a referral that became the companies biggest client ever.  I was even invited to write a post for Outspoken Media on International SEO.

Now, just attending isn’t enough, because if you don’t have a unique way of talking to people, yours will just be another business card in the stack they receive.  My strategy was two-fold:

1) Have an icebreaker. www.inboundespanol.com is a website where we translate the best content we can find that is related to SEO and inbound marketing into Spanish.  I reached out many of the people who I knew I wanted to meet via social media and email to ask them for permission.  When we translated the content, I reached out again to let them know that it had happened.  This meant that when I introduced myself to Mike King, I wasn’t just a fan, I was the Inbound Espanol guy, which broke the ice, and differentiated me.

2) Act like you’ve been there before.  I don’t ask to take pictures with Wil Reynolds (for example), because I am not there as a fan.  I treated him as an equal, and asked him questions that related to scaling a business from a few people to the 50+ person company that SEER has become.  This helped to differentiate me from the hundreds of other people that talked to him during the course of the conference.

As a result of these two tips, I now call many of these influential people friends and colleagues.

That trip to Mozcon cost me close to $3,000 USD, but was worth every penny.  And maybe we would have made the same progress without that trip, but I don’t think it would have happened as quickly.  Three years later Altura Interactive is a Moz Recommended Company, I’ve done two Mozinars, spoken at conferences, and was just chosen as one of the Moz Community Speakers for this year(!).  It has raised our company profile, and provided the connections we needed to grow.

Nishank Khanna

Nishank is a 6-time founder with two exits. His specialty is taking any idea and executing it meticulously. He’s an engineer, designer and marketer. And shares startup knowledge on Bright Journey.

It depends on whether you have a source of income or savings that covers your personal expenses while you build the business.

If you don’t, $5K is not a lot of money to start a product based business. Be it a physical product or a SaaS application. The better option in that case would be a consulting business.

Most product based businesses started off as consulting businsses. 37signals (now Basecamp) is a great example. What consulting provides is a steady stream of income and resources that allow you to build a product.

The end goal should always be a product.

If I were to build a physical product based company right now, it would be a nootropic like Alpha Brain By Onnit Labs. For a software based product, I would create a SaaS solution that targets enterprises.

Consulting

Pros:

• Easy to start and easier to grow than a product initially.
• Good way to fund a product based business without raising money.

Cons:

• You only make money when you’re working.
• As you grow, filling the client pipeline gets harder.

Products

Pros:

• You can generate revenue while you sleep. You still make money while you’re on a vacation.

Cons:

• More time and resource intensive to start.
• The initial time needed to profitability is longer than a consulting business.

Ian Lurie

Ian Lurie is Chairman and Principal Consultant at Portent, an internet marketing and technology company he started 1995. At Portent, he leads in-house training and works with his team as they develop new tools. He’s recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Forbes.com and TechCrunch. And, Ian speaks at conferences around the world, including SearchLove, MozCon, SIC and ad:Tech.

I’d start a company just like the one I have, but I’d focus much more on communications as our ‘thing.’ Internet marketing has become so gimmicky I feel like clients eternally call us for quick fixes and magic solutions. But I started Portent with $2500 and credit cards, so I suspect I could do it on $5000.

I’d grow it by taking really hard-to-understand concepts and communications (like legislation) and making it understandable. That would build our reputation, and get prominent brands coming to us. In the mean time, I’d seek out smaller brands and people with great messages and work for them, too.

This may be hopelessly optimistic. But that’s how I’d do it.

Simon Slade

Simon Slade is CEO of Doubledot Media. He co-founded Affilorama.com, Salehoo.com and smtp2go.com, and has a passion for anything design, marketing or data on the web. Outside of ‘work’ Simon enjoys snowboarding, squash and discussing startups.

I havent gone into specifics, more a general blueprint covering the process I would use.

I would look to hack a product together (Minimal Usable Product) in the shortest possible time frame to get it to market and begin testing.

• Would build it on Facebook Connect
• Focus on core functionality’s
• Use a service like Stripe or Clickbank for my payment processing
• Build it on a web-framework, CakePHP for example.
• Track metrics and usage with KissMetrics and Customer.io

In terms of what type of business I would look to start I have quite a few ideas, but one area that does interest me and that I think is still broken, is ecommerce and simplifying selling products online outside of eBay and Amazon.

For growth I would look to leverage any existing relations I have as much as possible (as this cost is minimal), and also look to spend money getting the product in front of industry influencers to push it as opposed to ‘traditional paid marketing’ methods.

Sam Nam

Sam Nam, Chief Marketing Officer at NeatBrands and zVentures. Founder & CEO of 50x Digital.

In 2008, Sam joined Digital Room, Inc., a venture-backed e-commerce printing company, and built an onshore/offshore marketing department of 35 marketing professionals to drive customer acquisition through analytically powered SEM and SEO. In 2011, he moved to Manila to manage Digital Room (Philippines), Inc. and led the company’s Manila office for two and half years as an expat executive.

In 2014, he was named Head of Marketing for Digital Room, Inc. and relocated to Los Angeles, California. Prior to joining DRI, Sam graduated from La Sierra University with honors and earned a BA in Business Administration while working at Gravity Corp. (NASDAQ: GRVY), a South Korean video game corporation, where he was a member of the marketing team that launched MMORPG Ragnarok Online in North America.

My initial reaction is panic! 🙂 Because I am the only breadwinner, my family couldn’t survive without a steady source of income. However, since this is a hypothetical question, I will assume I have enough money in savings to live off of for the first 24 months of business incubation.

About 7 years ago, before I became an online marketer I started a blog called “What Men Think”. It was a blog “written by a man about helping women understand men”. Most of the other blogs and magazines providing advice on men for women were written by women and were about as helpful as Cosmo sex tips.

I provided something different – totally honest answers from the perspective of a man. Women would ask questions like, “I went on a date with a great guy. My girl friends say I should wait 3 days before I call. How many days do I need to wait before I call?” My responses would sound something like, “The 3-day rule is total B.S. If you like him, then call.

Any decent guy who likes you will be happy to hear from you. He might even call first.” Most of my posts would average 25-30 comments in the first day without promotion and I was building a loyal readership. The truth is many young women don’t have many male friends who they can go to for honest male advice. On reddit, over 125k users subscribe to the AskMen Subreddit to ask questions and provide advice in this same line of thought.

My business idea would be to create a higher level professional counseling service around a single type of question asked by women every day – “Does he like me?” Women would come to my website to have a phone or video chat with one of our “male experts”.

She would describe her relationship with the man she was “crushing” on and share all the necessary clues and stories for our expert to help her determine if her crush also “liked her back”. This might sound ridiculous to some readers, but everyday people pay money to psychics and counselors to ask similar relationship questions.

In the U.S. alone Psychic Services are a $2 billion dollar industry. In my opinion an honest male perspective is as valuable as or more valuable than a psychic consultation to a lovesick woman. Over time clients would develop coach-like relationships with their “male experts” to help them navigate the world of dating.

Financially speaking the love consultation business is extremely lucrative. For example, psychics charge $1 per minute or more! That amounts to $60 or more to provide a 1-hour consultation with a caller. Have you ever spoken with a lovesick individual?

An hour is often barely enough to get the background story. Initially I would need to do all the consultations myself, because I couldn’t afford to recruit independent contractors. The long term goal would be to create a marketplace similar to Google Helpouts where independent contractors who wanted to work as “male advisors” would login and speak with clients.

I would charge the advisors a facilitation fee of $0.50 per minute and the advisors would be free to charge any amount on top of the facilitation fee to their clients.

The initial $5,000 wouldn’t go very far. I would need at least $4,000 to file an LLC, produce a minimum viable product website, acquire payment processing and register a toll free phone number. The other $1,000 would be used in Adwords to buy long tail keyword searches like “how can I tell if a guy likes me”.

The remainder of my marketing would be focused on content marketing through a blog I would resurrect called “What Men Think” where I would answer questions emailed to me regarding dating and relationships.

Richard Baxter

Richard Baxter, CEO, Builtvisible.com

Well, I’ve always worked on a “go with what you’re good at” approach, so I’m going to be kind of predictable and choose a business related to the one I own right now. It would definitely be consulting and production of some sort, and (being predictable here, remember?) I’d like to stay in marketing.

I’m not sure how much you know about the inner workings on Builtvisible – but we’re currently beginning the transition to our own marketing software platform. We’ve been working on it for almost 16 months, and I’m extremely excited about it. There’s no way we’d be able to have hired our development team, or been able to make any type of investment for that matter, without a warchest. A good strong source of capital upon which you mount your offence!

This brings me on to your question:

“Let’s say you have to start all over again, and you only have $5,000 left to spend. Where will you invest it, what new business will you start, and how will you grow it in the next 12 – 24 months?”

$5,000 isn’t a lot of money! So, my answer: I wouldn’t spend it. I’d keep it and hold on to it like it was my last lifeline on Earth. I’d work my ass off with my new consulting firm, setting myself commercial goals along the way to build up the warchest. You don’t need any (OK, much) money to start a business like that, and a “bootstrapped” approach is a critical doorway to opening new opportunities with your own cash later down the line.

I’ll be frank with you, this is great question because as far as CEOs go – this problem would seriously separate the “wheat from the chaff”.

That’s the approach that made it possible to begin the phase of the business we know and love today. Sure, it took 4 years, but we’re not investment backed, and right now that’s a good thing.

As for how I’d grow it. Well, differently than last time. I think in the past our industry has been incredibly insular. We hide our numbers in SEO conferences, being generally unwilling to break into different verticals. I’d be very keen to explore a niche that wasn’t utterly penetrated by large, competitive brands. That’s what my Dad’s always said: “carve out a niche, and the sales will take care of themselves”.

Luch Zanirato

Luch Zanirato is the General Manager of Maxweb, Inc. They provide high quality SEO (Search Engine Optimization), PPC (Pay Per Click), Social Media, Online Reputation Management, Web Design, to small and medium enterprises all over the world.

Two things come to mind whenever it comes to starting a business.

Invest In Network

For some, this may be arguable, but for me, a lot of the deals I have closed in my career in business has had to do with someone I know, being introduced by someone I know, meeting people in events, and joining organizations.

This being said, I would invest some of these funds to attending events and organizations (both online and offline) where I may meet people I can potentially do business with. The benefit of having a large network at my fingertips is immeasurable. There is nothing but opportunities to be made.

Never Stop Learning

In whatever I decide to get myself into in terms of business, I always intend on being an authority in the field. It’s a principle I look to uphold, as knowing what you’re doing and being good at it creates an atmosphere of dependability and trust between my clients and I. So, continuously investing on mastering my business and business in general are two things I would recommend to continuously invest in. Education may be expensive and cheap – it really all depends on how resourceful you are.

Today, there are free knowledge bases on almost any topic under the sun that can be found on the Internet. It just takes a bit of perseverance to find the ones that provide value. Other than that, there are also paid courses / workshops / seminars / groups (both online and offline) that are business-related and industry specific.

For the knowledge to be relevant, I would distinguish the specific knowledge I need to know at that moment to be superior at what I do and carefully search for courses, blogs, experts, journals, groups etc. that can contribute to my advancement – all, of course, within the allotted budget.

I’m old school when it comes to growing a business. There is no substitute for hard work and a passion for what I do. When these values are combined with a good network and an expertise on a certain field, the foundation to build wealth is solid.

Dan Petrovic

Dan Petrovic is a well-known Australian SEO, and the Managing Director of Dejan SEO. 

One of my biggest problems has always been project focus. I tend to buzz with ideas and start too many things, never giving them my fullest attention. My entrepreneurial instinct has been driving me towards software development for a while.

Having experienced the challenges associated with building software I gradually started turning towards other areas such as online retail. Setting up a store and marketing it would be easy for me, but I do feel insecure when it comes to sourcing products, negotiating pricing, shipping and customer support. So right now, I’m considering picking up an abandoned project and giving it an overhaul.

The project I’m talking about is analogik.com which used to be a buzzing community for digital musicians, it has died down due to inactivity, now I’m thinking how I’d ressurect it with $5000 only and how would it provide good return.

I would use the $5,000 and spend on the following activities for analogik.com:

• $2,000 – new design template and content clean-up
• $1,000 – motivational fees for casual guest writers
• $2,000 – promoter outreach (promoters are people who put gigs together looking for advertising space)

Primary income streams:

• Advertising for events, albums and gear
• Artist spotlight

Secondary income streams:

• AdSense

Simon Penson

Simon is a former magazine editor turned digital marketing agency owner and is founder and MD of Zazzle Media, a content led digital marketing agency. He writes regularly for Moz, eConsultancy, Content Marketing Institute, Hubspot and Search Engine Watch covering a wide range of digital marketing topics. He also talks regularly on digital marketing at events such as SMX, SES, Brightonseo, Searchlove, Performancein and more.

A great question Jason and one that is so difficult to answer simply because of the amount of opportunity out there at present in the digital space. My answer would be something socially focused, specifically around how to create dovetailed paid and organic strategies that grow audience and revenues from the channel.

Social is an area that is so exciting right now and offers so much in terms of opportunity for brands. It’s also one that is very much centred on content (which I love). That said, we already do this through Zazzle Media so in truth it probably wouldn’t be classified as a “new idea” for me.

If I had to do something really different it would be centred on SAAS software. I love the scaleability of this model and there is a real opportunity to make content much easier to put together.

Sean Si

Sean Si is the founder and editor-in-chief of SEO Hacker, an SEO and internet marketing company. 

That’s a lot of money to bootstrap a start-up with. I started with a measly $28 when I started SEO Hacker.

I guess I would go with a niche product I could do a laser focus marketing campaign on. The reason behind that is because it has a limited number of customers (who are highly passionate because they feel like they’re an elite group), which means that I don’t need to spend broadly on marketing campaigns.

All of the money can go into product development and inbound marketing.

A niche product can range from a hobbyist collector’s items, trading cards, exotic pet accessories, etc.

The plan is to import them or to partner with a manufacturer/supplier and to market them like crazy online. As with my experience with SEO Hacker, if you provide awesome service, word of mouth marketing will do its magic and spread word about your business for you.

In fact, we have a project right now that I wish I stumbled upon when I was just starting out. The CEO of Issho Genki Squalene was kind enough to partner with us in selling Squalene online. It’s sort of a drop ship where the headquarters is in the Philippines. They manufacture and ship, we market and sell online – and we’re both happy.

The cost? Well, we developed an e-commerce website for them with an integrated payment gateway which costs approximately $1,000 – however since I personally developed the site and just had other people help me with the design, let’s say it costs a little less – perhaps $600.

So that leaves me with $4,400.

Then I apply the SEO best practices I know – building links, optimizing the code, writing articles and promoting it like crazy. Let’s say I hire help to do all those things and it cost me another $1,000 for the first 3 months.

That leaves me with $3,400. Not bad.

By this time, I’m assuming that It’s already profitable. Which means I get to keep $3,400 and reap the benefits. Then I hop on to the next project or business partner that comes my way.

It’s just a repetitive process of buy, sell, market and give crazy-ass service to customers for the next 24 months. After that, it’s a review of how well the market has received your product and your brand and then pivot a strategy from there.

Remember, when you are starting out, it’s not about the different things you do for your business to grow. It’s about the few, extremely right things you do every day that matters most.

James Agate

James Agate is the founder of Skyrocket SEO – a content creation and promotion company that is also home to Cohortive.

If I were to start over in business with just $5k, I would be looking to invest in something digital that specifically targets a market in Africa.

We all know that Africa is a large continent but I think we’ve all been surprised by The True Size of Africa. It really is a colossal opportunity not just in size but in terms of growth. Fastest growing middle class in the world? It’s not China, it’s Nigeria. According to McKinsey there is a boom in Africa’s consumer spending on its way, which is set to rise from $860 billion in 2008 to $1.4 trillion by 2020.

Look across the main markets in Africa and consumers are developing but often quite underserved online. I would look to acquire as many localised, generic domain names with a view to building out sites, targeting the growing search volumes and then partner with local firms in a joint venture style arrangement – we benefit from their local presence and fulfillment and they benefit from digital marketing without worrying about setting up a site.

It’s not an idea that is going to change the world, but in my opinion it is an incredible opportunity to tap into the next digital goldrush and hit large markets where there is little to no competition – something that is just unheard of in most Western online markets.

Glen Allsopp

Glen is the founder of ViperChill, and he’s also recognized as one of the youngest successful internet marketers worldwide.

If I were to start again right now with that budget there is zero doubt I would start a marketing company.

That might sound a little strange until you look at the bottom line: Companies need more leads, and I have the spare time they don’t have to figure out how to get them those leads for their industry.

Whether that’s through social media, SEO, or PPC, I would figure out the best strategy for that one particular niche that I decided to focus on. Figuring out every aspect of the Google algorithm is next to impossible, but it’s fairly simple to see how they rank sites for just one specific industry. The same goes for bloggers in that niche, paid advertising that actually works and so on.

Since businesses don’t have the time, I would find the time and help them crush it. Positioning yourself as the expert in one specific niche helps you position yourself as an authority much easier and the conversions come much easier. Everyone wants to work with a company that just focuses on their particular industry, trust me.

The growth would come from driving traffic to my own site through the channels I would teach them how to use (social, SEO and PPC). The main client driver would be webinars and a lead magnet which consists of a free guide outlining solutions to the biggest problems that industry has in marketing itself.

I actually have a free video course on this exact topic at http://marketinginc.com 🙂

Sujan Patel

Sujan Patel is a passionate internet marketer and entrepreneur. Sujan has over 10 years of internet marketing experience and started the digital marketing agency Single Grain. Currently Sujan is the CMO at Bridge US, a company that makes the complex immigration process easy and affordable.

If I had to start all over I’d probably start a saas business or some sort of product (based on a problem in an industry I know every well. Most likely B2B). If I had a budget of $5000 I would partner with a developer so that my cost to build the product/saas business is $0. I would use most of the budget on paid advertising to get to product market fit as fast as possible and improve the conversion rate as much as possible.

This is something similar to what we did at Bridge.US (we used $575 on design & $3500 on adwords/facebook ads to improve our product, UX/UI and conversion rate). I would hope that we get to a break even user acquisition cost but it’s likely not to happen with $5000 or first month or two.

I’d use whatever money I have left to create long form content & ebooks to do guerrilla content marketing. Once I used up all my money I could still continue with free marketing efforts such as press outreach (all I need is 1 mid-large publication who’s wiling to write about my company), manual outreach for links to my awesome content I used with the last of my budget, on page SEO, social media, and the list goes on.

Month 1: Focus on Product Market Fit & On page SEO
Month 2: CRO & SEO
Month 3-6: free marketing (PR & link building & social media)
Month 6-12: Focus on marketing tactics that have worked (successfully acquired users)
Month 12: Assess business and make decision to continue or not

When I’m totally out of money I’d pick up a few clients or get a job to pay to to earn money so that I can continue with my company. If I see traction and think the company can make a profit in the next 3-6 months I would get a small business loan or raise VC money.

I don’t think you need much money to get started on a business. I started Single Grain with no money and had 2 clients at the start and we were making money from Day 1.

Joel Klettke

Joel Klettke is a professional loose cannon; a freelance copywriter from the Great White North who spent four years duking it out with Google before pushing eject and going rogue as a creative. The best looking man in the world (according to the internet), you can find him mumbling sarcastically over on Twitter. 

I’ll cheat a bit, because this is something I’m already in the process of building. If I was starting a business with just $5k to my name, it’d be a boutique content shop. Not a content mill – there’s an important distinction.

There are seemingly hundreds of content “teams” out there that can deliver blog posts and the like. Very few put the focus on quality and almost none of them let you know the writer’s name.

There’s this HUGE gap in the market that can be filled by a team that delivers solid work that a brand can throw their name on and charges a reasonable rate for that service. I’d invest the $5k into brand work (logo/design), awesome copy (hah!) and getting a solid website up with Zapier-automated intake forms.

I’d spend some of the budget prospecting for top-notch writers and the remainder on producing some awesome promotional video content (I’ve got friends who can handle this pretty cheap, and nobody else is doing it).

To grow the business, I’d approach a few key digital agency targets that I know have significant client bases and pitch them on the concept – that’s where I’d snap up the first few recurring clients. Once I had clients secured, I’d bring on full-time editor/project manager as early as was feasible to help with scale and QA.

Julie Joyce

Julie Joyce owns the link development and SEO firm Link Fish Media and is a regular link columnist on Search Engine Watch and Search Engine Land. She’s also a co-founder of the SEO Chicks blog.

If I had to start over right now, in my current frame of mind, I’d start a business that involved nothing other than consulting with clients about how to handle their own online marketing.

I really enjoy working with clients to help them learn what we do and how to do it for themselves, so I’d set maybe $500 for a subscription to Majestic SEO for a year, $500 for Adwords to advertise my new offerings, and leave the $4k for all the crazy things that pop up when you start a business.

I’d grow it by doing what I currently do now, which is writing for sites like Search Engine Land and Search Engine Watch, and I’d go to every single local marketing meetup possible (which would kill my nerves but hey, I’d suck it up.)

If I could manage it, I’d probably get at least a part-time marketing job working for someone else while I got started again so I’d have a salary coming in while I built up my client roster.

What I wouldn’t do is get a loan even though many would think that’s the smart thing to do, but one of the only things I feel like we really did right when starting Link Fish was doing it without getting into debt.

Brian Dean

Brian Dean is the founder of the SEO blog Backlinko.com.

I’d definitely start a blog in the Conversion Rate Optimization (CRO) space.

That’s a MASSIVE (and growing) field that’s not going away anytime soon. There are a handful of great CRO blogs online, but there’s  definitely room for many more.

So I’d start an incredible CRO blog and promote the heck out of it using well-done roundups like this one, Skyscraper content and lots of email outreach.

The $5,000 would go mostly into site design, video production and building the email list. The video format lends especially well for CRO. Despite that, I haven’t seen any CROs step in front of a camera on a consistent basis. So that would be a way for my to differentiate myself from the existing CRO blogs.

There are already enough fantastic CRO tools (like Optimizely and Visual Website Optimizer) on the market, but I haven’t seen a course that provides people with step-by-step information they can use to boost conversions. So I’d probably monetize with one-on-one coaching, an online course, or a membership site.

Jon Cooper

Jon Cooper is the founder of Point Blank SEO. 

I would probably start a medium/small drop shipping eCommerce business in a space I knew I could dominate SEO for, as well as have the margins to run PPC campaigns. Up-front costs would be minimal, and all I’d need to worry about is a little bit of development work and a few on-going costs like hosting.

Depending on the average cost of a product, I might order some first to get my hands on them so I can write better product descriptions, and second for product photos. Then I’d give them away to bloggers for a few product reviews. I’d use the rest of the money for marketing, most likely on content development.

AJ Kohn

AJ Kohn is Owner of Blind Five Year Old, a San Francisco Digital Marketing firm specializing in search. An experienced marketing executive with a successful track record spanning 20 years, AJ combines a deep understanding of search marketing with a passion for product strategy and iterative product development, fusing design and user experience with quantitative analysis.

If had $5,000 today, how would I spend it and what would new business would I start? I still think it’s a great time to start a digital marketing business. There’s just so much demand out there for good SEO (in the broad sense of the term) and few companies that are really filling that void.

To launch a new business in this vertical you’d need to put far more emphasis on building the brand in the beginning. So I’d spend a lot more time blogging and then marketing that content in blog comments, Quora and other relevant forums. So a fair amount of that money wouldn’t be spent but saved so I had more runway until I’d built authority around that new business.

There’s a product idea I still have about unlocking the ‘backlist’ of content that search doesn’t surface well. I’ve noodled on it for the past few years. Have a product spec and a domain but not a lot of time. But if I were to switch horses I’d use that $5,000 to create a beta (developer costs), obtain some alpha users (PPC perhaps) and perform user research.

If I were looking further out I’d use the $5,000 to attend a number of different conferences to network with those in the technology and privacy industries. The goal would be to find partners who shared a vision for creating a service that would make it difficult to track your digital wake.

We all leave massive footprints and it’s increasingly hard to remain anonymous. So instead of being anonymous you make yourself ubiquitous, creating phantom versions of your digital wake (different forums, different locations, different searches) that make it more difficult to find the ‘real’ you. I think there will be a real desire for something like this and it has a pretty straight-forward subscription model tied to an emotional benefit.

No matter what it is, you’d need to have content assets that were authentic and memorable. It’s the only way you’d be able to stretch that $5,000, which just isn’t a ton of money starting a new business. So doing the hard work over and over – using that elbow grease and not giving up is what would ultimately be rewarded.

Grant Merriel

Grant Merriel is the strategist and advisor at ConversionUp. He’s also the founder and principal consultant at BusinessProcess.

Starting Point:

• I would cut out all unneeded costs in my life: motorcycles, fancy restaurants, holidays, rent, bills and even move back home if needed (this is not failure but ensuring you can bootstrap for the longest period possible)
• First, I’d get in touch with my close business network and see what they NEED in their business. Remember: a service based is preferrable as there is more profit (marketing a product / service you think is important is harder than selling a product / service that others have shown they need)
• Run through the list of business ideas and order them in hierarchy based on my skill set / ability to complete them with my current skill set (or my skill set after some research)
• Find the one service that is in the middle ground of “People needing it now” and “My current skill set”, for me it would be web design and development or SEO delivery (anybody can become almost an expert with reading 5 top resources in the area and relevant blogs / forums – just get involved)
• Figure out pricing, strategy and an offer. Try to make it a recurring model, how about offer a website for $199 a month with hosting, 5 monthly updates, security checks, etc. Recurring income saves a lot of hassle with sales too (review competitors, talk to your network and hustle a bit)
• Get people to say “Yes” and sign on to your pricing and start servicing them ASAP! ($5,000 burns quickly and you have spent $0 so far but have customers – Woop!)

Remember: Always build off your direct networks as they are friends are generally will trust you to work your arse off, which no doubt you will.

Note: I would go with SEO or Web Development. Both easy to offer recurring bills, easy to sell their value and people already know me as an expert in them.

Stepping Growth (0 – 6 months):

• Register a brand, get a logo, make a website, score testimonials (from my network), etc (keeping costs below $1,000 to $2,000 for this is vital – I still need to eat!)
• Outreach to some influencers in other business networks to do some complimentary reviews (look up chambers of commerce, university alumni’s, Facebook Entrepreneur groups, etc – you will be surprised what friends / friend parents / relatives are associated in these groups)
• Get involved in Group interviews around the business you are promoting (like this group interview for Business Services)
• The aim within 6 months is to get “influencers” / “top players” in business networks outside of my own to evangelise the brand with the work that the business has been doing for them (My aim would be to get more than 50% of my income from “outside” of the first networks)
• At the end of the 6 months, I would aim to be on $3,000 to $6,000 a month

Quick Growth (6 – 12 months):

• Process, Process, Process! Everything I do on all of my clients will basically be the same, spending nights in front of the TV documenting what I do in such a way that ANYBODY can read the documents and implement them is vital to remove me from repetitive tasks. (People won’t steal them but just giving them access to only the documents they need can help save the privacy too)
• I know that the business relies on ME for innovation / improvement / growth, so as sales grow, getting someone to do the more repetitive tasks allows me to focus on more sales, new strategies and networking more (Work “ON” the business and no “IN” the business)
• Utilise other outreach sales methods:

1. Get involved in “niche / market” discussions that I know NEED our service (business newspapers, blogs and forums)
2. Jump right into social media (especially LinkedIn for business services)
3. Throw out referral commission (SEO is a great example, talk to local web designers and give them 15% monthly commission for every client they successfully give to you)

• At the end of the 12 months, I would aim to be on $5,000 to $10,000 a month

Long-term Growth (12 months – 24 months):

• Now that we have a solid business earning money, looking to systemise it and have the team run it for me (sales, marketing, service delivery, etc – whether in-house, outsourced, etc)
• Become the face of the business, doing press coverage, talking at conferences and expanding the relevant network. (this is still sales and marketing but the way to can crush the competition)
• Offer “complimentary” services / products to your core offering (For SEO: offer AdWords management, landing page design, website tweaks, social media optimisation, etc – a happy customer will always spend more with you)
• Me personally, I would do what I do now and invest in other business to ensure that I’m always challenged but don’t have all my eggs in one basket (I would suggest 1 or 2, do NOT over commit yourself – a lot of people do not advice this but I love new projects )

Key Takeaways:

• Services are easier to sell their value and easy to implement than selling and making products (the revenue per customer for services can be 10, 100 or 1000 times greater than selling products)
• Getting recurring revenue to cover living expenses is the key! As there will be a lot less stress and easy to focus on bringing in more sales / business growth (If food, bills, etc cost you $2,000 a month, then ensure you earn $3,000 a month to cover tax, if people leave, etc.)
• Over 2 years, I have built out systems, reports and processes (just in case I need to start again), this is the best advice I can give to anybody who wants to scale their business, process everything from link building, social strategies, content research, web development check lists, etc. (I can now open an SEO firm, web development firm and content writing team with just a website)

Gary Viray

Gary Viray is the Founder and President of Propelrr, a digital marketing agency based in the Philippines. He also writes about analytics, content marketing, online marketing, and SEO at garyviray.com during his free time. He is an entrepreneur by choice. You can follow him on Twitter @garyshack.

I am a product guy by heart. Given the $5,000, I will invest it on solid research on any industry I want to delve into so that I can craft an excellent business plan matured for pitching to selected investors who are interested in the business/product I am about to develop.

You may ask what specific new business this might be. Actually, it could be any business. But definitely, I will go for IT applications or technology-driven products since I have been in the IT industry for quite some time.

This is to stress that one of the keys to success is about focusing on your strengths or where you are really good at.  I will look for Co-Founders who know by heart the business side of the industry that we will get into. The crucial part here is about finding the right people who are way better than myself and are equally passionate about what we are about to build.

The business will be heavily invested in building our core values and culture to sustain the supposedly viable product by happy individuals/staff.

The first 6 months will definitely be focused on product development, iteration, and user feedback gathering by giving our participating target market free usage of our product. The primary objective here is to build a superior product attested by users themselves.

This is to have a litmus test on how the bigger market will react or accept the product. Given the data also, we can further ask for funding from interested venture capitalists (VCs). Rapid deployment and top-notch customer support should be one of our strengths too.

The next 6 months and beyond will be focused on brand building and marketing strategy implementations. Try to assume too that marketing and brand building have already been part of the entire equation since day one.

Of course, business growth and product development will always be continuously at work since the business is product-based.

You may have noticed that the $5,000 was only used for initial works geared to attract bigger funding from investors. I believe that in order to really be successful in any business venture, one needs to be shooting the moon and the stars.

It is our true grit and tenacity to win big time that can make us remarkable in our lifetime.

John Doherty

John Doherty is the founder of Credo. He’s also a seasoned Enterprise SEO Consultant.

If I had to start all over again, I would invest in a domain name and web hosting. I’d crank out content a few times a week, but I’d monetize the traffic I was receiving. I’d do outreach to bigger sites and get my name out there on the web. Eventually this would lead to a job, I have no doubt.

If I wanted to do the entrepreneurship route, I would launch it like I launched HireGun.co (which unfortunately is pretty abandoned these days). I’d start it minimally and verify that people want it. I’d get the first payment before I even bought the domain and hosting. Then, I’d market it through a combination of content marketing, SEO, and of course I’d build an MVP of a product. In my mind, no business should launch without a monetization strategy. Otherwise, it’s just a side gig!

Glen Dimaandal

Glen Dimaandal is the founder and CEO of GDI, a Philippine-based SEO and Content Consulting firm.

Even if I got fired from my day job and every client I have on the side went away today, I’d stay close to online marketing. It’s the trade I know best and it’s still a wide open field of opportunity in the Philippines.

I can either continue offering digital marketing services (SEO, SEM, content creation, social media marketing) or focus more on creating information products that are sold through membership programs.

Either way, the setup process will be the same: I’ll take the steps below to get started and grow a profitable business in the span of 12 months. Granted, I’m oversimplifying each step, but my goal is to provide an outline and not to write a full-length blog post. Here goes:

1. Decide on the Intellectual Capital to use– Knowledge is a low-cost, high-returns commodity. It’s something I already have and it has no shelf life. I just need to decide which among my fields of expertise and interests to pursue. In this case, let’s just say it’s SEO.
2. Profile the Target Customer – SEO is a commodity that’s in high demand from a diverse group of people. You’ve got business owners who want to gain online visibility for their sites, agencies looking for white-label partners, people who want to learn SEO and so on. I’ll identify which group I want to deal with based on financial sensibilities. I’ll zero in on my prototypical customer based on their interests, location, job titles, company affiliations, etc. so I know exactly what kind of content and user experiences I’ll need to prepare for them.
3. List Down Customer Pleasure and Pain Points – Marketing is fundamentally based on a promise of one of two things: increasing pleasure and taking away pain on the part of your customers. Once I identify my customers, I’ll list down their problems and I’ll see how my knowledge can help them. I’ll also make a list of what my customers find rewarding and I’ll match them with what I’ve got to offer.
4. Identify Your Unique Selling Points (USPs) –  Of course, I won’t be the first guy to offer outsourced SEO and I sure won’t be the first one to try and sell information products based on it. The key will be how I differentiate my brand from my competitors and how I show legitimacy in the value of my offerings. For example, I can make pure white hat practices the main selling point of my services. I can also bank on more competitive pricing, higher quality or a combination of these elements.
5. Open a Workspace – I’m the type of guy who needs a very professional environment to maximize my productivity. I’ll spend the bulk of my budget on a small office with a reliable Internet connection and a whiteboard for organizing my thoughts and sharing it with staff members and clients. I understand that other people are comfortable with work from home arrangements, but I’m not that disciplined. Having an office in a commercial district also helps in showing local clients that I’m running a legitimate operation.
6. Develop a Content Strategy– Writing random pages and blog posts without an overarching strategy is a waste of time. Each page written and each blog post published has to serve a business purpose. If it doesn’t, there’s no reason to bother with it. I like forming content strategies around a content theme that directly addresses my customers’ pain and pleasure points. From that theme, I’ll produce an opt-in bait that packs enough value to convince people to give up their email addresses for it. This can be a whitepaper, a video, admission to a seminar, etc. Blog posts, videos and SlideShare decks will be created and promoted to draw attention to my opt-in bait.
7. Map Out the Revenue Model – The revenue model has to correspond with the kind of products or services I’m offering. If I’m selling info products, online transactions will be my main revenue channel. If I’m offering SEO services, the revenue model will likely be based on monthly retainers remitted at the end of each campaign period. Other revenue models include advertising fees, commissions from affiliate programs, etc.
8. Identify KPIs – It’s hard to improve what can’t be measured. Traffic, conversions, conversion rates, drop-off rates, revenue, average customer lifetime values, lead values and costs per acquisition are some of the immediate metrics that I’ll look into. These stats are indicative of my overall business performance and they can be used to determine weak points in my campaigns.
9. Develop the Website– My web development and design skills are very basic, so I’ll invest in a WordPress site dressed up with a good theme. The Genesis Framework and its child themes are solid investments. Most plugins are free, so just about every functionality I need will be taken care of. At the onset, I’ll make do with a simple website. When revenue starts flowing in, I’ll invest in custom design work. My domain name can be bought from GoDaddy at pretty low rates. My hosting will probably be sourced from HostGator.
10. Create and Promote the Content– Since I have decent writing skills, I can write most of my content in my first year. This includes whitepapers, page copy pieces, landing page copy, video scripts, etc. All content creation activities will follow the content strategy I outlined earlier.
11. Build a Mailing List – It would be good if I can generate leads and sales from simple visits, but I know from experience that multiple encounters and follow-ups can amplify a site’s conversion rates. To talk to my target audience even while they’re away from my site, I need to have them subscribed to a mailing list. This is where my opt-in bait does its magic and this is why I’ll invest in email blasting software. I’ll probably use GetResponse, though there really are a lot of other great choices out there. I won’t get it and pay for it off the bat. I’ll probably get it on the fourth or fifth month of my operational existence.
12. Measure results– Once I get content rolling and I start getting email subscribers, I’ll start constant measurement of my performance. This allows me to see if adjustments need to be made. Numbers don’t lie and I’ll rely on my numbers to make the most educated business decisions possible.
13. Scale and Expand– Depending on business performance, it’s perfectly reasonable to start adding people to my team. I may also start organically expanding into related fields of expertise. For instance, if I only offer SEO now, I might start offering SEM management services if the demand is there. If I’m selling an SEO training program and it proves to be a hit, I may start looking into selling a copywriting training program.

Here’s the breakdown of the expenses I’ll incur in the first 12 months:

Cyrus Shepard

Cyrus Shepard is the Founder of FazillionMedia. Former Head of SEO & Content Moz. 

First of all, it’s a no-brainer that I would build something. I’m not sure what form it would take, be it a website, app, SAAS, blog or what have you. I do know it would serve the purpose of connecting people to information. All great online experiences connect people to information.

I work in software, and as anyone knows, you can’t build much software for $5,000. That said, you can prototype something reasonably well for that amount if you’re smart – and sometimes that’s enough to attract more investment.

From a pure marketing perspective, I don’t think you’d have to spend a cent if you didn’t want to. Take the $5000 and spend it on design or development resources instead.

One thing I know for sure, I’d blog or otherwise create content around my new product every week. It’s free. I’d deliver value for my audience before ever asking for a dime. I’d reach out and connect with influencers, because that’s free too. Oh, and I’d probably work from a sandy beach somewhere with my wife.

This is starting to sound like fun, where do I sign up?

Miguel Salcido

Miguel Salcido is an 8 year search marketing agency veteran who is now enjoying running his own SEO consulting agency. He has been an SEO consultant to firms such as State Farm Insurance, Peer1 Hosting, WD-40, Bumble Bee, Kyocera, Extended Stay Hotels, Mail.com, Fidelity National Financial, and many more have entrusted their SEO campaigns to Miguel over the years. 

If I had to start all over again with only $5k, assuming I had no real assets like an established website, I would probably build myself a service based website and work to promote it in organic search. I would have to pick a service that I can provide that is profitable and not super competitive online.

I say a service because $5k is not enough to develop your own product, a good one anyways as I’m not into selling info products. Plus, with services there is no real overhead or inventory. You can also sell services without a website by using services like Clarity.fm and Google Helpouts, or by networking on popular forums or websites in the service niche.

You could get a decent site and brand log done for about $500, and can spend the rest on marketing. Much of the marketing can be done by myself, including setting up and managing social accounts, getting into business directories (Manta, Crunchbase, etc), and creating PR. At that point its all about hustle and time, and you have some decent money to spend on content and marketing. Maybe run some display ads on highly targeted sites.

At the end of the day, this is a low risk adventure. And by the end of it all, if for some odd reason things did not work out, you would be left with a decent asset in terms of the website and brand. And if you had to you could probably sell it all for at least $5k to start over with.

Bill Sebald

Bill Sebald is the owner of GreenLane SEO. 

If I had to do it all over again, I’d probably do it the same way – just with more educated preparation. I have no interest in creating a business for an exit strategy. Personally I’ve seen that too many times, never with the passion and culture I enjoy. I’d much rather find something I’m completely in love with – which others could also love – and make money “doing” it.  All I care about is creating a world that I want to be a part of everyday.

I’d spend the $5,000 on tax and business lawyers, and an accountant. Then from there the most powerful ingredient – sweat. I’d opt to hire (or partner with) people smarter than me, with the aligned goal of not only growing the business, but also creating a place they want to visit every day. Many “professional businessmen” I’ve met would scoff at this, but what can I say – I’m happy.

Neil Patel

Neil Patel is the founder of QuickSprout – and also the co-founder of KISSmetrics and CrazyEgg. 

If I had $5000 I wouldn’t spend it on marketing. I would invest all of the money into the product or service I am creating. I truly believe that if you can create something that is so great and useful, the press will start picking it up, people will talk about your company, and you will get tons of signups.

Now $5000 may not be enough to create a great product or service, but you can always give out equity to people in exchange for their time.

Aleyda Solis

Aleyda Solis is the founder of Orianti and Remoters.net. She’s an International SEO Consultant, Speaker and Author.

If I have to start from scratch again *but* knowing and having the experience I have now, and only with $5,000 Dollars … what I would do is:

1. Come back to start doing what I do now since is what I love and believe in its value and potential, plus is on what I would have higher chances to create something successful due to my experience in the field
2. Invest the $5,000 in Tribalytics, the product I’m co-founding now.
3. Capitalize myself doing SEO consulting / affiliate on the side so I don’t have an immediate need to make profits pressure.
4. Grow the product organically, giving part of its content & functionality openly.

Dan Shure

Since starting his company Evolving SEO in 2010, Dan has worked with startups, eCommerce sites, bloggers, affiliates, small businesses to large companies and everything in between. He shared his experience on his own blog and others and spoke at several industry events such as SMX East in New York. His SEO expertise is with on-site technical SEO, WordPress, site architecture and content. Dan is also a Moz Associate, where he answers questions in the Moz Community, contributes to the Moz blog, presents webinars and also spoke at a Mozcation Portsmouth.

My answer will be the purple cow, I’m sure of it. I’d go back to my first love and profession of music and combine that with my new passion of online marketing. I’d aim to become the best in the world at composing piano parts for hip hop music. (Parts that can either be used like “samples” or full song structures. For example, this sample: http://youtu.be/4nTI-0j0Ou4 became this full song: http://youtu.be/3PwMeWsg5tE).

My ultimate core target market would be the top hip hop artists and their producers. Revenue would come from;

• songwriting royalties
• up-front sales of tracks
• ads and affiliate marketing via various properties like a website and YouTube

Some of the various properties, marketing and content would be;

• I’d cover of popular tracks on YouTube to attract a following and establish credibility (I already do this just for fun now, for example my cover of a Kanye West song has over 10,000 views: http://youtu.be/wKU4NYHxVQE). Every once and a while I’d drop in one of my own compositions.
• I’d aim to funnel people back to my own website, where I could use affiliate links (only for products I really use and love) for things like gear, sheet music and music software. This website could contain in depth content and tutorials on how others can learn to play piano in a hip hop style.
• I’d use social networking as a way to eventually connect with the top producers, like OVO40 https://twitter.com/OVO40(Drake’s producer). I’d do this through steady, consistent interaction, not being a douche, and foremost having high quality music in all my profiles, so that when people do eventually check it out, it’s memorable.
• Before expecting the top artists to use my music, I would do some collaborations with other artists just working their way up, but who have talent. This would build my portfolio and I’d work from there.

No, this isn’t based on market research. It’s probably even “dumb” from a logical perspective. There’s no promise of high returns on something like this. But I think it follows the most important aspect of entrepreneurship that I would encourage everyone else to think about. And that is, what’s the ONE thing in the world you can do, and be the BEST in the world at it? Where is your intersection of talent and passion?

That’s what I’d do. I’d start. I’d have no idea where it would lead. I could grow into a business or it could not. But I’m certain it would lead somewhere positive.”

Steve Webb

Steve Webb is the Founder of Web Gnomes, where he spends most of his time performing SEO audits.  You can connect with Steve on Twitter.

About three years ago, a friend of mine asked me a very similar question.  I was living in New Zealand at the time, and my friend was moving to a very small town in the United States.  Since we both needed to be able to work from anywhere, we eventually decided to start an online consulting business.

One of the great things about consulting-based businesses is they require very small initial capital contributions.  If you already have the necessary expertise to provide consulting services, you can easily get the business up and running with a very small investment (e.g., $5,000 or less).  Initially, all you really need is a business entity, a website, and some legal forms.

However, getting the business started is the easy part.  And that’s why I’m going to focus on a few business-building lessons I’ve learned over the past few years.  Hopefully, these lessons will help you avoid unnecessary mistakes and streamline your own journey to success…

1.) Identify your unique selling proposition (USP), and leverage the hell out of it.  If you can’t differentiate yourself from your competitors, nothing else really matters.  And I’m not talking about pricing differences.  I’m talking about fundamental differentiators.  For example, when I started offering SEO consulting services, two things immediately separated me from almost everyone else in the world: 1) I have a Ph.D. in Computer Science and 2) I used to work for Google.  Unfortunately, it took me longer than it should have to start leveraging my USP.  Don’t make the same mistake.

2.) Don’t be afraid to give away a little milk for free. There’s a very popular idiom that asks, “Why buy the cow when you can get the milk for free?”  The implication being that no one will ever pay for something if they can get it for free.  In some areas of your life, this line of reasoning might be valid.  But marketing is not one of those areas… especially when you are starting a new business.  You can have the best milk in the world, but if no one ever tastes it, you’ll never be able to sell it.  Therefore, don’t be afraid to create free resources (e.g., ebooks, newsletters, tools, etc.) that showcase your expertise (or your products).  If the milk is good enough, people will get hooked… and they’ll have no choice but to pay.

3.) You know your business better than anyone else. When starting a business, you should absolutely reach out to others (e.g., designers, lawyers, accountants, marketers, etc.) for their help.  However, do NOT outsource opportunities for you to describe your business to the world (or shape how the world perceives it).  It’s obviously much easier to hire an outside party to write copy for you or manage social media for you.  But easier is not always better.  Especially when it comes to building your brand and establishing your company’s placement in the competitive landscape.  No one knows your business better than you, which means YOU need to be the one controlling your company’s narrative.

4.) Don’t underestimate the power of referrals. I’m sure you’re aware that it’s much easier to retain existing customers than it is to gain new ones.  But that shouldn’t give you a license to neglect your existing customers.  In fact, you should go the other way.  Treat your existing customers like royalty because you’ve already earned their trust, and if you do your job effectively, those customers will become advocates for your company.  Once you have advocates on your side, your job actually becomes significantly easier because you’ll have a team of real people championing you and your company!

5.) Always be testing. No matter what you’re doing, you should always test an alternative approach.  If something works, it might be able to work even better.  If a test fails, learn from it, and move on to the next test.  Also, keep striving to be as efficient as possible.  The majority of your successes will inevitably come from a small percentage of your efforts.  Spend your time trying to identify those efforts and reproduce their results.  Don’t fail victim to complacency, and always question your assumptions.