Getting start-up funding can be tough when you’re a solo operator. Investors are often reluctant to stump up the cash.
From their point of view, putting their money on the success or failure of a single person is too risky. With no talented team behind you, there’s a worry about whether the business has the skills it needs to prosper, let alone scale quickly to provide the booming growth rates that guarantee a tidy return on investment.
This tough funding environment leads most sole traders to dipping into their savings when starting up, or putting their house on the line to try to get a bank to release some much-needed cash.
It’s imperative, therefore, that soloists keep start-up costs to a minimum. The pain of an overly-indulgent spending spree will be squarely on your shoulders should things go wrong.
But which kinds of businesses provide the best chance of keeping costs down?
We’ve picked out five areas that are set for growth and, just as importantly, are affordable for soloists to start-up in.
To see each sector, click on the tabs below.
1. Handmade and vintage goods
With the Australian eCommerce market’s value set to expand to $11.5 billion this year – with further, albeit slowing, growth set to come – there are plenty of online niches where solo operators can set up shop.
After all, all you need is a computer, transaction account, website and some stock – or a service – and you’re away.
But some sectors are doing better than others, which makes the handmade and vintage goods market so attractive for many solo entrepreneurs.
A growing consumer desire for all things retro and authentic lends itself to a low-cost business model that sees cheaply-acquired clothing or handmade products sold on at a premium, usually online.
You don’t even need to spend thousands on web development – you can sell your products via sites such as eBay or Etsy. Recent figures show that the top 2,000 sellers on eBay.com.au had an annual turnover starting at more than $120,000, with the top seller drawing in more than $12.6 million.
There are variations to the model, such as Andable, which sells handmade products with a guaranteed 10% going to good causes, and In.cube8er, a growing Melbourne-based business that displays and sells the work of Australian artists, much like a mini department store.
Isy Galey, founder of In.cube8er, says: “Craft is the new black. Handmade objects over the past three or four years have become massive. People like the authenticity involved in a handmade product.”