So you have a big business idea, but no money to execute it? Not to worry, you’re about to be fully briefed on how to start a business with no money. Gone are the days when the resources to execute big business ideas were limited!
Launching a business venture, with little more than enthusiasm, persistence, and lots of work is also known as bootstrapping. In other words, a self-starting business process without external input. Let’s get to the nitty-gritty by discussing the following 10-steps you need to consider to start a business with no money.
How to Start a Business with No Money: Follow These 10 Tips
- Work on your business idea. Many of us think our business ideas are glass-shattering-good, but some are simply models of what has been done before. While you consider your idea, think about what you can offer. Is it something that has been executed in the past? If so, how is your model any different or what personal touch can you give to it? Develop your idea based on your skills and your passion. It won’t hurt if your idea fits into one of the most profitable industries. For inspiration, check out the 35 Most Profitable Small Business.
- Keep your current job. Don’t make a rash decision and go headstrong towards your new business venture. For the most part, the journey to start a business with no money is long and arduous. Eddie Cantor, a famous American comedian, said it best: “it took 20 years to make an overnight success,” so be sure to keep your day job while you work on your dream job.
- Build at least six-months worth of savings. First off, understand the real cost of starting a business. More often than not, we estimate a much lower price tag needed to start a business with no money. A safe bet is to add around $2,000 additional to your estimated business costs and keep at least six months worth of savings to allow creative and financial freedom while you’re building the foundation for your business.
- In the beginning, offer a service instead of a product. Try to deliver a service that doesn’t require a location when you start out — it’ll save you location costs. For example, it’s much more cost-effective to offer a delivery meal plan operation from your own kitchen than renting out a site to do so — although you might need to in the long run. Or for example, opt for hair styling services for special occasions instead of creating a hair-care line. This will allow you to generate cash flow and to get practical experience within the business — especially if you want to launch a venture where your background knowledge is sparse. Remember that, at the initial stages, it’s more important to generate cash flow instead of focusing on profit.
- Analyze the market. Study the opportunities in your area and your potential market. What kind of service is currently lacking in your area or could be attractive to potential customers? Who are going to be your customers? Are there any competitors you need to consider?
- Be creative. If you think your idea is good but not necessarily creative, try gathering as many creative ideas for small businesses as you can. Ask friends or other successful entrepreneurs, and do deep research online. A brainstorming session with potential partners will provide you with motivation and ideas on how you can differentiate your business from the competitors. It can be something as simple as an original marketing or advertising campaign, or, for instance, having your storefront take the shape of a cupcake with the name of your town if you’re a dessert shop.
- Start your marketing initiatives from day one. We know, we know… starting a business with no money is already difficult enough. Now we want you to add a marketing budget? Yes and no. Marketing is going to be one of your biggest sales funnels, especially at the beginning — and it’ll keep your customers coming back until the end. But luckily you don’t have to spend loads of money. If you’re creative enough you can conceive pretty epic low-budget marketing ideas. Remember to utilize social media tools — they can be your greatest marketer if you have a strong creative vision. Hosting intimate events or giving lessons can also be another way to bring in new business by showcasing your services at a one-time free event.
- This isn’t just a trendy word that millennials throw around as an excuse to get free food and drinks and get invited to events. Networking can be done anywhere! Do you take Uber or an elevator? Those are great opportunities to network. Once you step out your home door, the world is your oyster if you just keep in mind that everyone you meet is a potential business lead or someone who “knows someone.” If you already do that and need more ideas, check out How to Network Properly. Make sure to have your business card in tow at all times.
- Run a test and ask for feedback. If you’re interested in learning if your service or product truly fills a need, ask for feedback. There are plenty of free ways to do this. It can be done via an anonymous survey sent to customer inboxes or even taken on-site. It can also be encouraged via offering a free or discounted service to those who provide you their feedback. Many business owners make the mistake of looking too far ahead into the future, without regard for answers that can come directly from the customers they are currently serving.
- Don’t give up! Be persistent. Be ready to not see profit at the beginning. Expect it so that it doesn’t catch you by surprise. More importantly, move and be proactive in testing your product or service, making sure you’re utilizing your time and resources to the best of your ability.
Now that we’ve gotten through inspiration — and integral part in learning how to start a business with no money — obviously, you’ll also need to cover your capital needs. Where are you going to get your funds if your savings are not enough? Here’s where:
- Friends and family. While not the most favorable option for some, borrowing money from family for business doesn’t have to be a complicated endeavor. With clear guidelines and expectations from both parties, friends and family can be a beneficial capital source.
- Small business grants. If borrowing money from your family is not an option, there are plenty of online opportunities for minorities, veterans and women to receive small business grants. All it takes is a good plan and an even better explanation.
- When all else fails — or when you simply need more — try crowdfunding, a way of raising capital by asking a large number of people each for a small amount of money. This can be done on sites like GoFundMe, the #1 crowdfunding website.
For more alternative sources of capital for small business, check out Capital Resources: Alternatives for a Business Loan.
Camino Financial can also help you when you’re on the quest to learning how to start a business with no money
While most lenders require at least two years in operations to give you a business loan, at Camino Financial we only require 9 months. And after only 9 months of timely payments, you can graduate to a better loan for a larger amount and with better rates. This is a great opportunity for new entrepreneurs with limited access to traditional loans. Remember that Camino Financial has fewer requirements than most banks, and our online process is easy, secure and quick. You could receive your funds within 4-10 days!