Michael Dell started out washing dishes for $2.30 an hour. And he started selling personal computers from his dorm room in college.
All these companies: Apple, Disney, Google, Harley Davidson, Hewlett-Packard, Lotus Cars, Mattel, and Yankee Candle Company had their beginnings in small garages.
Don’t have money to start your business?
Thinking that you need to have large capital to start a company can be misleading. Sometimes you can get started with little or no financing.
As you read it, starting a business with no money may seem like a far-fetched idea, but it’s not impossible.
While it is true that to start and scale any business, you will need more than just a little cash. You will most certainly need partners, investors, and a solid plan for how you are going to use your new business funds to grow.
However, when you are just starting, you can start small. Even better: you can start as ” small ” as you like.
For example, if you plan to open a store where you sell your handmade products, you can always start by selling them to friends and family. You can build a reputation and get initial feedback.
You can then sell them online on a third-party website. After that, you can move on to hosting your own site and setting up a store. Do you get the idea?
You can start as “small” as you like
If you are worried about how you can start a business with zero funds, here are some ideas on how to do it:
Ask yourself what you could do or get for free
Making a list of obstacles that stand in your way to launch your business is very easy. Often what is difficult is putting together a list of opportunities that are in front of you.
If the idea of starting a business without money scares you, stop and reflect on what you’re doing without those resources right now.
? Need the fancy, custom website when you’ve only perfected three items for your new store? Could you create a free Facebook page to promote your business locally?
Or would it make more sense to list your products for sale on a third-party site? Would it make more sense to design your own marketing materials in Canva? Maybe you could trade and trade skills/products/and resources with other people instead of payment?
To say that there are many free resources on the web is an understatement. Make a list of what you need for your business, then search the web for free alternatives. It may take some time, and maybe even require you to pick up some extra digital skills, but it will save you funds when you need them most.
Accumulate six months of savings for expenses
Indeed, dipping into your savings account is not the ideal situation. However, it is a fairly common practice among businessmen.
When crafting your business plan, be honest with yourself about how much you’re spending and how much revenue you’re likely to earn. Next, be realistic about how long it will take before you see a profit.
Generally, it takes no less than six months before you start receiving cash income. Set a goal to save at least six months of living expenses so you can focus on your new business.
Ask for support with extra funds from your friends and family
Remember, you are not asking for charity. You are not asking your friends and family to support your crazy business idea. No, you dream of a business and your business plan is solid.
You’ve crossed your t’s and dotted your i’s. That’s why you’re looking for the people closest to you when you pitch. Use your friends and family as a multi-layered resource.
Practice your sales pitch with them. Ask for feedback. And, when you’re ready to start your business, ask if they can help you with a small loan to boost the business.
Just make sure you have everything in writing and indicate when you will return them. You can even use a crowdfunding platform to encourage people around you to encourage their networks to participate.
Explore crowdfunding platforms
Crowdfunding platforms like Kickstarter have changed the way entrepreneurs are raising money to finance their new businesses.
Whether you want to sell a new software tool or set up an organic noodle bar, you can get people to invest in your business.
Apply for a small business loan when you need extra cash
If you’re looking for more capital and have been operating on a shoestring budget, consider applying for a small business loan. Banks and online lenders offer different types of small business loans to customers looking for additional cash flow or investment funds.
You can usually get more favorable terms with a traditional bank. However, online lenders are often more lenient in their requirements. Just watch out for those high-interest rates.
If you’re not looking for a lump sum loan amount, consider a business line of credit. In short, they are like credit cards for your business. They are good options to purchase items as needed.
Find small business grants and local funding opportunities
Truth be told, small business grants aren’t always the easiest to find or obtain. But, once you have your business up and running (no matter how small), you can start looking for free money in earnest.
Always remember that grants will generally have specific application requirements. As long as you meet them, you will be competing for a pot of cash that is all yours. Begin your search in government databases, and always be sure to ask your local small business administration chapters for help.
Contact and meet potential angel investors
You have probably heard of angel investors. They come into play when it’s time to scale your business beyond just being yourself and the group of loved ones you’ve contributed. Angel investors are usually among the first people outside the company to seriously invest in a business.
Unlike outside companies or other venture capitalists, angel investors deposit their funds. They can also be the best kind of mentors as many of them are former/current entrepreneurs.
Assess your capital needs
You need money to start your business, but how much do you need? Without a clear idea, you risk arriving at an unrealistic valuation of your business, which will discourage investors and reject your loan application.
So before you start wondering how to raise money, you need to focus on assessing your funding requirements. How much do you need to start? How exactly are you going to use the funds?
Without a clear idea, you run the risk of arriving at an unrealistic assessment of your business.
When you don’t have money to start your business, you must find the right people who can help you. You can attend events and trade shows where you can find potential investors. You can also join various online forums on social networking sites where you can find helpful tips and resources to bring your business to life.
Most venture capitalists and investors are quite active on social media, so if you can surprise them with your idea, you can find a great way to start your dream business.
Apply for a government small business loan
There are several loan programs designed to help first-time entrepreneurs set up their businesses. To qualify for the loan, your business must meet some criteria, such as operating for profit and having a good credit score.
With that said, here are other tips for putting your business into practice:
Keep your current job
Being practical is extremely important when you’re toying with the idea of starting a business. You need a steady source of income before you can set up your business, so it’s wise to keep your current job. By keeping your current job, you’ll be safer when you need to take risks.
Of course, you will need to put in extra hours and work harder. But the transition from being an employee to a business owner will be much easier since you won’t have to worry about additional expenses.
Work on your business idea
Having a great business idea is just the beginning of your journey as an entrepreneur. There are many more steps you need to take before you begin. Developing your business idea is one of them, and it is very important for the success of your company.
Is your business idea unique? What value will it generate? Is it something your target audience wants? Or is that something you think they would want? Getting answers to these questions is important in determining whether or not your idea will work.
Analyze your market and its challenges
You have a brilliant idea that you know will work, but what about your competition? Will it be difficult for a rival to copy your idea and repackage it in a better way?
A potential investor will ask you this when you approach them for financial support. It is very important to understand the market in which you operate and your competition.
You must first look at the trends and identify the challenges that your company may face. The next step is to understand how you will address those challenges to stay profitable.
Run a test or prototype
Do you want to be sure if your business idea is unique? Take a test and find out. A pilot test will give you the confidence you need to take your idea to the next level and mitigate risk. You can start small by giving some gifts to some people in your target group to see how they respond.
A little test can give you new ideas to grow your business and identify challenges you might have missed.
If you are planning to go into a completely new business, it would be really helpful if you got a second opinion from someone who knows the market and the challenges involved.
A business idea that looks good on paper may not be as appealing when you get involved. An expert opinion can help you see things from a different perspective and gain more knowledge that you may lack.
As you can see, the issue of money can be less critical at the beginning if you do things right and follow the steps recommended in this post. Dreaming big is just as important as starting small.
Giving shape to the idea and doing it gradually can be the best guarantee for an investor to lay eyes on your proposal. Leveraging the infinity of resources that the Internet offers you is something that many people did not count on a few years ago, so you are in a very good moment.
Go ahead and start today the most exciting adventure of your life: undertake