Obviously I’ve made up the Newbie Tax.
It would be a brave politician who pushed through a tax on people new to running a business. Hardly sounds like a vote winning strategy does it?
However, the Newbie Tax is holding back many aspiring entrepreneurs from fulfilling their potential.
The Newbie Tax is the whole reason why Shoestring Hustle exists.
With a name like Shoestring Hustle, it’s easy to think the aim is to do business on the cheap.
It’s not, the aim is to start a business on the cheap. When you start out, you have no income and possibly a tiny budget.
Somehow that budget has to cover the costs of all the essential tools you need to conduct your business.
When you have steady revenue coming in, paying for those tools isn’t a problem. There’s a cost to doing business and you set your pricing to ensure you can cover that cost and make a profit. In this circumstance, I could style it as a Success Tax.
When you start, of course, you have no income to cover those costs and it may get worse.
You may have planned your business exceptionally well or just get plain lucky and turn a profit from your first month. For many of us, however, our progress may be more in line with the Winston Churchill quote.
Success consists of going from failure to failure without loss of enthusiasm.
We don’t get things right straight from the off. We make mistakes and we learn from them. As great as the value of those experiences is, they don’t bring in revenue.
All the same, we still have to pay for the essential tools we need to develop and grow our seedling business.
Money has to go out regardless of whether money comes in or not.
In effect we’re taxed for our mistakes and our failures.
We have to pay to mess up and learn what doesn’t work, so we can adapt and find what does work.
The monthly cost can easily reach one or two hundred dollars, or even more, depending on the tools you choose.
On the one hand, we could argue that it’s an essential investment in our new business.
On the other, we could blub a bit and complain how it isn’t fair.
Alternatively we could take a more pragmatic and proactive stance. We could slash the Newbie Tax.
Most professional marketers will tell you about the leading commercial tools. The big name tools that are used by many successful entrepreneurs to drive their successful businesses.
These tools generally offer affiliate schemes, so recommending them can be a profitable business in its own right.
Such tools aren’t the only option though. There are other free and low cost tools that can offer many of the benefits of much more expensive choices.
When creating more complex sales funnels, many marketers favor ClickFunnels which starts at $97 per month.
If you’ve already got a WordPress site, adding a free page builder plugin like Elementor will let you build sales funnels directly on your site. This isn’t as straightforward as ClickFunnels, but if you’re cash poor and time rich, it’s a completely viable option.
Marketing automation is essential for any online business, but generally isn’t cheap. Picking ActiveCampaign as an example, for a list of 5,000 addresses, the cost is $89 per month. Alternatively you could pick Mautic and host it for as little as $5 per month.
Combined with an account at ElasticEmail, you could email a list of 5,000 addresses once a week for just $2.25 per month or less.
So you can see, just by making alternative choices for three of the most important tools, you can save over $200 per month.
So if it’s that easy to save money, why doesn’t everyone do it?
The first and most obvious answer is that most people don’t know the alternatives exist. Commercial tools can spend more on their marketing and shout louder about what they do.
The second and more important answer is that the alternatives often take a little more work. They may not be as straightforward to set up and run and often you will find yourself reliant on the support of a community of users like yourself.
If you choose to use ClickFunnels, you’ll be using a tool that is designed specifically to build funnels. You can choose ready made and proven funnels and adapt them to your business.
Additionally the ClickFunnels interface has been carefully designed to make life as easy as possible for an inexperienced business owner to use. Experienced designers will find it restrictive, but it wasn’t built for them.
As I’ve said, you can build your funnels on WordPress using the Elementor page builder and a few other free plugins. That said, Elementor isn’t designed for funnels, so you can’t choose a funnel with a click and adapt it. You have to design your own funnel and add each page yourself.
This actually isn’t too difficult, though it’s more time consuming. You can find many free funnel recipes available online. Clickfunnels’ Russell Brunson even offers a free ebook you can download.
However, Elementor is built for designers, so it tends to be more complex in terms of putting pages together.
Once you clear the learning curve, it’s fun to work with, but that learning curve is there. That’s not to say ClickFunnels doesn’t have a learning curve, but ultimately it should be easier for new business owners to get started building funnels with.
Similarly, all marketing automation solutions require some time to learn and understand. However, using Mautic on your own hosting comes with an additional set of complexities beyond just learning the software.
I’ve wanted to be as honest as I can about the alternative options available.
They can reduce your costs while matching many or sometimes all and more of the features of paid for tools. Their benefits, though, may be offset to some degree by more complexity and low levels of support.
You need to weigh the pros and cons. You can save hundreds of dollars a month, but you may need to spend more time on some aspects of your business.
That said, when you know the pitfalls to beware of and the tricks to make the most of these tools, avoiding the newbie tax is a real option.
You really can run your business on as little as $5 or $10 per month without compromising significantly on the features available to you.
Here on Shoestring Hustle, you’ll find more information and tips about the tools to use to keep your start up costs down.
I’ll also be adding various training courses for those who prefer to be guided through using these free and low cost tools. These paid for trainings and associated tools will help you get started quickly without making the common mistakes.
If you need to start a business on a budget and you can’t find relevant advice on this site, get in touch. Go to the contact page right now and send a message explaining what you need to achieve. I’ll do what I can to get you pointed in the right direction.
© Ian Pullen - Shoestring Hustle 2018
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