Proven Strategies To Start a Business with No MoneyOct 31, 2021
It takes money to make money…but what if you don’t have any?
Many new and experienced entrepreneurs are eager to launch a business but find themselves cash-strapped. Even if they have the money…they want to be smart about investing it in their new endeavor.
Starting a business without money is not uncommon and many have succeeded in doing so.
So, what’s the secret?
Well, before we get into that, it’s important to clarify the phrase “no money”.
Launching a business without capital doesn’t mean that you will not spend any money. There’s always a cost element in starting a business that cannot be avoided. For example, you will need to spend money on your company registration, domain purchase, website hosting platform, etc. Most people can afford these minimal costs.
The phrase “no money” refers to the inability to afford high-ticket expenses, such as office supplies, equipment, rent, insurance, staffing, marketing, advertising, and product manufacturing.
Therefore, if you find yourself unable to afford a large capital investment...you must get creative in your startup.
That’s what we’ll cover today…by answering the following 3 questions:
- Can You Start A Successful Business Without Money?
- What Challenges Should You Anticipate If You Start A Business Without Money?
- What Are The Strategies To Launch A Business Without Money?
Can You Start A Successful Business Without Money?
We all have financial obligations…whether it’s outstanding bills, a mortgage, student loans, children’s college fund or a hundred other valid reasons on why we may not have extra cash to spare.
Because of these obligations, you may ask yourself:
“Should I push through with starting my business anyway?”
Most don’t push through and live in the world of “what ifs”.
Entrepreneurship is a risk, not a guarantee. You will always face the risk of losing time, energy, and money!
However, it’s helpful to remember that almost all successful businesses began as small startups. When you are starting out small, you will do your best to minimize costs. Therefore, you don’t need a big office, the latest and greatest technology and a 20-person team early in your journey.
So, of course, you can start a business without “money”, as long as you have determination, commitment and strategy.
What Challenges Should You Anticipate If You Start a Business Without Money?
Before embarking on your startup, it’s a good idea to be prepared and understand the challenges you may face when you are cash-strapped. Although there are many challenges you will come across, let’s focus on the top 5:
- Equipment & Supplies
Different businesses require different high-cost equipment and supplies. A restaurant will need kitchen equipment. A moving company will need trucks and vans. An online entrepreneur will need audio and video equipment. To afford these expensive items, you will have to find creative ways to work around it or find cheaper alternatives.
When beginning your business, you will be in growth mode. Without funds to put towards marketing and advertising, you will have to rely on organic growth strategies. The difficulty with organic growth strategies is the time it takes to gain traction and the time you will spend in implementing those strategies.
You may not be able to hire or grow your team to an optimal number without the capital. Therefore, it is important to upskill so that you can compensate for the lack of extra hands-on deck. In other words, you will have to wear many hats to keep the business moving or look into freelancers for specific tasks.
- Unexpected Expenses
Be mindful of unexpected expenses. For example, your computer might break, resulting in the need for you to get a new one and incurring an unplanned expense. As you budget out your operations, try to keep a rainy-day fund for unforeseen issues that may arise.
I’m a big believer that if you don’t have at least 6 months to 1 year of savings to pay for your lifestyle, then your entrepreneurial endeavor should be a side hustle while you continue to work a full-time job that provides a steady monthly income. If you do have the savings, then be sure to taper your lifestyle to the bare minimum so that you are not living in a world of constant financial stress.
What Are The Strategies To Launch Your Business Without Money:
With the right knowledge and strategies in place, you should be able to have a successful launch. Here are 7 tips to help you start and run your business without capital:
- Launch A Practical Business
When you are low on funds, you don’t want to jump into a capital-intensive business. You’ll want to build something of value. It doesn’t have to be anything too complicated or anything that requires massive capital funding.
Businesses that focus on service and that don’t require overhead are the lowest-hanging fruit. For example, consulting, coaching, digital marketing and copywriting are businesses that can be launched with minimal capital investment.
- Wear Multiple Hats
If you are unable to hire a team, then you will need to do most of the work. Therefore, it’s important to come in with the mindset that you are able and ready to learn new skills, processes and technologies to get your business running.
- Research, Research, Research
Too many new entrepreneurs launch into a business without understanding what it takes or if there is a market demand for the product. By taking the time to do your research, learning the industry, and identifying a problem that you can solve…you will be able to create a practical business plan and financial model that dictates the direction of your business.
- Explore Free & Cheap Options
If you don’t have the funds to pay for equipment or staff, identify the things that are essential to your business and weed out those that you could do without when you first start out.
Next, avoid spending money on expensive software or equipment, and invest in the numerous similar alternatives that are either cheaper or have a free version. Additionally, there are many avenues to purchase second-hand equipment at bargain prices.
Finally, most entrepreneurs who cannot afford staffing end up learning new skills to keep the operations moving forward or, they hire freelancers from sites such as Upwork.com.
- Organic Marketing
These days, it doesn’t take much to put your business out there. Your website is a great first step in demonstrating your brand and the value of your products. Gone are the days on spending thousands of dollars for someone to build your website. Services such as Square Space, Kajabi, Wix, Active Campaign, etc. have made it easier than ever to create a DIY website or landing page.
Secondly, be active and engaged on social media. Being visible across all platforms will help with your exposure including your content showing up on search engines.
Sometimes, the more successful, and economical path to launching a business is having a co-founder or partnering with another business. Aside from the obvious of having more people doing the work, partnerships actually have a higher chance of success versus going at it alone.
Additionally, a partnership can help with sharing resources such as funding, network and human capital.
- Beta Launch
A beta launch is essentially a test launch. Many startups will create or develop a “Minimum Viable Product” (MVP), which is a proof of concept, because it is the cheapest strategy.
The MVP is a product or service that isn’t feature-rich, and only has a core functionality that is used to test out market fit and customer demand.
If the MVP is well received, it makes it easier for the entrepreneur to market and further develop the product. Additionally, the entrepreneur can now raise capital from investors by showing that there is demand for it.
- Alternative Funding
Starting a business without money can be stressful, however…it doesn’t mean you cannot get creative.
The first step in capital raising is to seek funds through friends and family. Since those that are closest to you already know and trust you, the chances of you receiving a loan or investment from your friends and family are much higher.
If you have good credit, you can also apply for a small business loan or use your credit cards. Just make sure you have a clear-cut plan on how you can repay these so you won’t end up in debt where you will be paying high interest and hefty fees.
Your Take Away
If you’re passionate about being an entrepreneur and are itching to start, here’s my advice: Learn the trade. Learn the best strategies. Learn from successful entrepreneurs who started with nothing.
It is possible to start a business with no money, as long as you are committed to it and you’re making well-informed decisions. Business education is key during your journey, so invest in your personal growth and development. The more you upskill, the more likely you will succeed in your endeavors and avoid making any costly mistakes.
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