Building a business can be expensive. Ask most entrepreneurs and they’ll probably be able to give you a list of unexpected expenses that cropped up in their first years.
But it doesn’t always have to be.
While the age-old adage is (usually) true – that you have to spend money to make money – in the online world, you don’t always have to spend a fortune. In this article, we’re going to talk about some ways that you can start a business with little or no money at all. It is possible.
The first and most important thing is to have a business plan. Most successful businesses started with a plan. Ones that don’t start with a plan usually have sufficient funds to throw money at the problem. (Not always the most effective way to run a business). Success businesses have a plan and successful businesses without a lot of start-up capital need a plan to make sure they get 11 cents of value for each dime they spend.
Partnering is one way to create a business without your own dollars. The challenge is that you could dilute your vision by sharing it with someone else. But if you find the right people to work with, you could work together. Or, offer a silent partnership: you do the legwork and vision-casting, they provide the money and nothing else. Alternatively, if you have family and friends with cash (but you don’t necessarily want their advice), skip partnering and go with an investor format: show them your business plan and offer a percentage of the profits.
Moonlighting works – especially for online businesses that can run with automated systems (like autoresponders, for example, that can respond to emails on your behalf while you’re working your paying job). Until you can happily march into your boss’ office and hand in your resignation, the money you make from your “day-job” puts food on the table. The challenge here usually occurs a few weeks before you decide to quit: when your own business is really good but not yet at the point where it can support you but it takes so much of your time that you aren’t functioning at 100% at work. A solution might be to enlist your family to help you or save up your sick days and holidays for when you desperately need them to function effectively at your job and your business.
Start smaller. Being an entrepreneur usually has but one requirement: big dreams. Many ambitious entrepreneurs start their businesses with more capacity (like bandwidth or inventory) than they actually need. Entrepreneurial optimism could be pulled back slightly in favor of profitability.
Credit cards and loans are a tempting place to get money. Occasionally you hear a success story from someone who had maxed out all of their credit cards before the first big order came in. “But when the order came in,” the story usually goes, “we paid off our credit cards and bought a castle in the Bahamas.” You hear the success stories but you rarely hear the failure stories. We’re not advising against taking out a second mortgage or slapping your AMEX card down to fund your start-up, but you need to think twice, or even three times before making that decision.
Entrepreneurs don’t make something out of nothing. They take raw materials and turn it into a living organism. Unfortunately, some of those raw materials – especially cash – are in short supply. With some planning and some of the options above, you can still make your dream a reality.