How to Start a Business With little to no money.
You would like to start a business. Maybe you have an fascinating idea, or you just enjoy the idea of launching and growing your own enterprise. You’re willing to take risks, like leaving your current job or going without personal revenue for a while. But there’s one crucial factor stopping you: You don’t have much money.
On first sight, this seems like a major problem, but a lack of big capital shouldn’t stop you from trying to start you own business. In fact, it’s entirely possible to start and grow a business with little personal financial investment whatsoever — if you know what you’re doing.
Entrepreneurs will often have amazing business ideas, but they put them on hold due to a lack of capital. They assume that they will never get far off the ground unless they have major funding behind them.
It seems that every day there is a new startup receiving millions of dollars from venture capital firms, but what you don’t hear about is the several startup failures that burn through millions of dollars only to fizzle out and shut their doors forever.
If your idea and plan of execution aren’t well thought out from the beginning, no amount of money can turn it into a winner. Have a great idea but very little money? Don’t let that stop you!
That’s why a business needs money
First, let’s find out why a business needs money for. There’s no standard “startup” fee for starting and building a business, so different businesses will have different needs for money. It’s important to first estimate how much you need before you start finding alternative methods to fund your company.
Consider the following uses:
- Licenses and permits.Depending on your region, you may need special paperwork and registry to operate.
- Are you buying raw materials? Do you need computers and/or other devices?
- Do you need specialized machinery or software?
- Office space.This is a huge expense, and you can’t neglect things like Internet and utilities costs.
- Associations, subscriptions, memberships. What publications and affiliations will you subsribe to every month?
- Operating expenses.Dig into the nooks and crannies here, and don’t forget about marketing.
- Legal fees.Are you consulting a lawyer throughout your business-development process?
- Employees and contractors.If you can’t do it alone, you’ll need people on your payroll.
Now that we know which are the main expenses in a business we can list here are some tips that can help you get your idea off the ground with limited funds.
- Start your business with what you know.Instead taking risk into uncharted territory, make sure that you build your business around your field of skills and knowledge. If it is possible don’t rely to much on outside sources. When your business is built around your own personal expertise you can eliminate consultants and outside assistance. Instead of going straight into full-fledged business mode, you’ll start with just the basics. You might launch a blog and one niche service, reducing your scope, your audience and your profit, in order to get a head-start. If you can start as a self-employed individual, you’ll avoid some of the biggest initial costs .
Also, having that knowledge is sometimes all that is needed to successfully take the plunge into entrepreneurship.
- Eliminate unnecessary expenses.You are going to have plenty of expenses, and there are some that just can’t be avoided. What you can avoid though is overspending. Your first option is to change your business model to demand fewer like reducing your “employee” expenses by being the sole employee at the start. There are a few expenses that you won’t be able to avoid, however. Licensing and legal fees will set you back even if you cut back on everything else. According to the SBA, many microbusinesses get started on less than $3,000, and home-based franchises can be started for as little as $1,000.
- Don’t get stucked in debts.Don’t use only credit cards when starting a business. New computers, office furniture, phones and supplies can all quickly add up. Instead of purchasing everything at once and throwing it all on a credit card, use your company’s revenue or outsource to finance your expenses. Here are just a few potential sources for you: Friends and family, Angel investors, Venture capitalists, Crowdfunding ,Government grants and loans. Eliminating the stress and burden of debt will greatly increase the chances of creating a successful business.
- Take advantage of free advertising and marketing.There are several ways to generate a buzz for your business without breaking the bank. Social media is a great way to gain exposure and interact with potential customers. You can also reach out to local media and offer your expertise.
Make as many local media contacts as you can and be extremely responsive with their requests. This can lead to them to branding you as the local authority, generating plenty of free press for your business.
- Be ready for battle.Hard work is an absolute necessity, but when you are starting a business with little to no capital then you must be prepared to dedicate everything you have into making the business a success. This might mean cold calling, handling customer support, dealing with billing and accounting, and every other working part of your business. You will wear many hats and it will require the majority of your time and energy if you are to make it.
Don’t let limited capital prevent you from taking a great idea and running with it. Will it be difficult and will you have some stressful situations? Of course, but that is part of entrepreneurship.