It’s a thought that crosses the mind of almost every working class person at some point or another – “I want to start a business, but I don’t have the funds to do it.” And in response, there are hundreds of “No Money? No Problem!” articles out there telling you how to start the business of your dreams, cash-free.
The thing is, no money no problems isn’t realistic because starting a business with no problems isn’t realistic. Starting a business with no money is far from impossible; it’s just going to come with its own set of challenges and creative solutions. If you’re ready to tackle those, here are 10 tips for starting a business with no money that will help you meet those challenges head-on and become the self-employed success of your dreams.
Know how to do something.
You may be starting a business with no money, but if you’re looking to get profitable later down the road, you have to be in this for the long haul. That means that you have to have something that you know and know you’ll be able to understand for as long as you’re in the game. Building your business around your knowledge base will get you there.
What you know doesn’t have to end up being your final product, but it should be the solid foundation on which you start. If you know welding and wiring, you don’t have to get into the electrician game. That could be the base for tinkering around with an invention, instead.
Starting a business with no money means you don’t have backers to fall on, and consumers are going to want some sense of security in whatever you’re offering before they invest. Your knowledge and experience gives that to them.
Evaluate your resources.
If you’re starting a business with no money, you’re not going to be able to sink a lot into new material in the beginning. Take a look at what you have, and really broaden your view to include everything that’s available to you, such as libraries for internet and computer access, and sources like Craigslist to help you source other materials that you might be able to get for free (a desk or workbench, for example).
Take a look at events with local government and non-profits, too. Chambers of Commerce, Better Business Bureaus, and town governments have all been known to host free events to help small business owners better prepare to operate and market in the local area. There may even be some resources on starting a business with no money specific to your area and marketplace.
Think big, start small.
There’s nothing wrong with having big ambitions for your company, and in fact, looking at how you want to grow could help give you a roadmap for moving forward. You don’t have to start big just to get big, though.
Starting your company small will allow you to do something else like work on the side. This, in turn, will allow you to provide for yourself while you take on starting a business with no money. Keep your operations small and manageable at first. Work the hours you can afford to dedicate, offer the products or services that aren’t going to cost you a lot in overhead, and until you get off your feet be prepared to be your own business.
Employees, full-time paychecks, and corner offices with skyline views will all come one day, you just have to be willing to put in a little time and effort to get yourself there first.
Cut up the credit cards.
If you’re really looking at starting a business with no money, then you need to stick to no money, and that absolutely must include money that you don’t have.
More small businesses are going to fail than succeed, and starting a business with no money puts you in a high risk position for this because you’re especially prone to excessive debt. The last you want is for your debt to outweigh earning potential, forcing you to close down for good.
That’s why, difficult as it may seem, if you’re starting a business with no money, you really need to adhere to that zero dollar figure. Think about worst case scenario – you spend no money and make no money, even if you have to close down you haven’t lost anything. You spend money you don’t have and make no money, you’re now without your business and you owe, potentially big time.
There will be certain levels of debt that come with running your business later down the road. It’s not reasonable to think that you won’t spend any money on your business period. When you’re starting a business with no money, though, the fastest way to sink yourself is to charge it.
Don’t be afraid to sell upfront.
If you’re starting a business with no money and you’ve taken the no debt tip to heart, you might be wondering how and when you’re going to see any influx of capital, at all. If you’re looking for a little something to prime the pump, don’t be afraid to pre-charge.
If you have a product, take pre-orders. If you have a service for which you charge by the hour, take a deposit. There is a bit of a risk here – if you do fail to provide the product or service, you will be on the line for the amount paid to you. Generally speaking, though, if you’re ready to start taking pre-sales or offering your service, you’re to a point where you’ve got your business going. That 20% deposit may just be what you need to get the gas money to get yourself to the appointment.
Selling upfront also affords you the opportunity to put something back into your business right away. Your model shouldn’t be built on pre-sales and deposits, but building a small reserve early on can help you later down the road when it comes time to actually start spending money on your company. Just don’t charge more than your company will be able to recoup to a client if you’re going to work with their money as your base.
Get in someone else’s space.
A lot of people spend a lot on marketing because a lot of people want a lot of people to use their company. Remember, though, that starting a business with no money means starting small. You’re a whole marketing department in and of yourself. Use that.
The reason that services like Yelp are so often consulted is because, despite all that money that all those people spend, personal referrals are still the best tool around. Think about it – your potential clients are inundated most every second of every day with an ad of some form or another. There isn’t a material good out there that isn’t branded. There isn’t a screen or page that doesn’t tell you something about the next great product or service on it somewhere.
People see ads all the time. What advertising campaigns can’t do, what no one but your own personal connections can do, is tell the world why you’re the one product or service out of the hundreds a potential client sees every day that’s worth the time and money.
You’re going to have to build that network from the ground up, which means you have to be completely unafraid when it comes to getting to the people you want. Tell your friends, and tell them to tell their friends. Set up a Facebook and LinkedIn and invite everyone you know to follow. Go to networking events, go to industry events, tell that person you overheard talking about something kind-of-maybe related on the train.
When you do have a client, get them to submit a review about your company. Pull out your phone and have them rate you on social media right away. Hustle. Hustle hard. You won’t find better advertising than your network, so grow it as much as possible, and make sure other people know as you do.
Pay respectful tributes.
Plagiarism is unethical and illegal. It’s the kind of thing that can and should get a company shut down. Using successful models as a template for your own, though, is a way to get yourself set up fast with some of the basic resources you’re going to need to start a business with no money.
Largely, this is something that’s going to apply mostly to documentation – business plans, contracts, legal agreements, etc. New business owners pay arms and legs to get these things drawn up, but that’s not the route you have to go.
Look at examples from your industry and pull from the things that are most important or applicable to your own model, especially if you know their owners or operators are familiar with starting a business with no money, as well. Remember, this is ultimately another company’s intellectual property, you can’t just take it. You can use it as a template, though, and in the process you can build some of the less exciting but more necessary materials that you’re going to want from day one.
Switch out fixed costs for variable ones.
Starting a business with no money means that you’re probably not going to have a fancy office or a new company vehicle to get things going. That doesn’t mean that you don’t want to have that kind of appeal when you’re working with potential customers, though.
The good news is that those pre-orders and upfront deposits will give you what you need to fake it. You can hire meeting rooms by the hour, a van by the day or even by the ride, an employee for the hour that you need them.
Track your costs for your variable spending, too. Your fixed costs will probably be lower in the end, but looking at what you’re paying for space, people, equipment, etc., when you need them is going to help you chart out a plan for what your costs will look like when you want them around all the time.
Remember, when you’re starting a business with no money, it’s good to think big. That’s how real plans get made. Just remember that if you want those big plans to stick later on, you can’t rush them now.
Cut any unnecessary expenses.
This may sound like a no-brainer, but when you’re starting a business with no money, you really have to consider what is and isn’t necessary. If your brand is all about an online service or product, do you really need 500 printed business cards to start? If you’re starting out as a blogger, do you need to host a separate website for your personal brand? If you’re starting a cleaning service, will using name-brand products really be necessary?
The answer to all of the above is no, at least when you’re starting a business with no money. You’re going to be bootstrapping in those early days, and a lot of small business owners are drawn in by quantity over quality. A few quality resources to begin with, though, will save you from having to cut corners in other areas, and ultimately, it’s going to get you to a point where you can build other quality resources a lot faster. Take stock now so that later on you won’t have to.
Become a business now, become a company later.
Working with the idea of cutting unnecessary expenses, in the early days, there’s nothing wrong with being a sole proprietor. As your business grows, it will be in your best interest to look at forming a legal entity such as a corporation or an LLC.
That’s something that can harm more than help if it’s done wrong, though, and it’s not a decision to be made lightly or a process to be rushed. Start now by building your brand and focus on making your company what you want it to be from your consumers’ perspective. There’s no need to rush into becoming You, Inc. right away.
Early on, the money you may want to allocate to that might be money you need to put somewhere else. Be a business today so that you can be a company tomorrow.
Starting a business with no money isn’t easy. You’re going to face challenges, and you’re going to be forced to get creative. If you can stick it out, though, starting a business with no money could turn into making money with the business you’ve always wanted.