It depends on how people make it possible. Often people complain about having a business idea, but don’t have the funds to back it. Insufficient money is a barrier to start a business indeed, perhaps, restricting yourself to work for your passion is not advisable if you possess the drive to succeed.
It depends on how people make it possible. Often people complain about having a business idea, but don’t have the funds to back it. Insufficient money is a barrier to start a business indeed, perhaps, restricting yourself to work for your passion is not advisable if you possess the drive to succeed.
Some of the brands that started business without money:
Harley Davidson, Hewlett-Packard, Apple, Disney, Google, Yankee Candle started in garages.
Nike founders Philip Knight, and Bill Bowerman sold shoes from their car trunk.
Ben Chestnut, the co-founder, and CEO of MailChimp, wanted to make email newsletters for his clients. He creates a tool to narrow down the tiresome process ending up in creating a business with $600 million annual revenues.
Whole Food Market – John Mackey and Rene Lawson started with their little savings and borrowed from peers to launch their first store called SaferWay in Austin. During their hard times, when they were dislodged from their house, they started living in their store and slowly expanded. After two years of self-funding, the duo merged with Clarksville Natural Grocery and opened Whole Food Market.
Dell – Michael Dell started business without money. He sold out PCs from his college dormitory and decided to drop out of college to start his company PCs Limited full time. Ranking 34 on the Fortune 500, it was once the largest seller of PCs and servers around the world. The journey was not a cakewalk, and it started with an investment of $1000.
Numerous “bootstrappers” are budding their companies without investors. Their mantra of the towards success is “building brands” and “sticking to the needs” especially on social media. They start as a small scale business and grow big with strategies and perseverance.
These are quite inspirations to lead you to start walking your dream way but don’t take a plunge blindly. It requires a lot of planning, and disciplinary steps to help you achieve your goals. Nor do you need one venture capitalist to support your ideas.
Why Business Needs Money?
There are certain preliminary expenses that cannot be ignored when starting a small-scale business, but setting priorities and re-evaluation help you to be organized.
- Licenses and permits: When you are decided to launch your business, the first step is to figure out the licenses and permissions you require to run the business in your locality. Based on the country and region, you must check out the necessary paperwork to operate.
- Legal Fees – Check if you need a lawyer to consult for your business documentation and other areas.
- Employees and Freelancers – It is better to do it all yourself during the initial days putting some extra hours. In case it's not feasible, you might need a few freelancers and employees on the payroll.
- Office space, equipment, and marketing expenses – These add up to a huge cost as things like specialized machinery, software, internet, utility, office rent cannot be ignored. Alternatively, starting from home is a safer option.
- A survey says that 69% of the entrepreneurs in the US start working on their business ideas form home. So, if you have a room for the business to grow, all you need is a PC, a phone, and a steady internet connection while outsourcing the production to freelancers.
- Associations, Memberships, and subscriptions – This is important to keep yourself updated on the current market scenario.
Checklist to Follow to Start a Business with Almost No Money
Starting a business without money needs strategic planning and good homework to reach the first milestone:
- Continue with your present job - You would require some funds to support your ideas. Also putting the whole family into trouble is not a good idea. Therefore, continuing with the present job will help you to balance your expenses.
- Work on the business idea - The journey of an entrepreneur starts with a great idea, but simultaneously, several important aspects like skills required, resources, the budget must be evaluated. Align your business ideas with your skill sets. Do not think of creating a big empire in one night, reflect more about how to start a small business. You must concentrate on the uniqueness of your idea and its value and the skill sets you require, the target audience you need to focus etc. This is a fundamental step towards the success of your venture.
- Do all the work yourself - When you plan to do business, you must be ready to things yourself since you do not have the budget to hire people. Doing things, yourself will enable you to put back every penny you save into your business. Though it sounds very difficult, you will end up building a cash reserve.
- Analyze market opportunities and challenges - Before you start a business, it is important to research the market opportunities, restraints, trends, and competitions. You must gather insights on copyright laws, potential investors, your target audience.
- Your First Customer - Figure out the source from which your first customer came to know about you. The first sale is very satisfying but always the hardest to achieve. Identifying the source will help to enhance it so that more customers find your services and purchase it.
- Figure out the Capital Needs - To start a business, you will need some capital, but it is important to assess how much you need. Without a clear calculation, you may end up with an unrealistic valuation of your business and getting rejected by investors and banks.
- Network with People - Networking plays an important role when it comes to starting a new business. Join trade shows, events, and forums, to be acquainted with potential investors, industry peers, etc. You will find helpful resources and tips to launch your business.
- Run a trial - A trial helps to identify the challenges which you might have overlooked otherwise, and work towards it.
- Build a Community - Set up Facebook, Twitter, and LinkedIn pages to build a community and promote your services. Start-ups can market their products and services for free through these portals. The more people know about your business, the more customers you get. Take time to interact with your customers to track their interests, needs, and feedback.
- Find a Co-Founder - When you have limited funds, it is advisable to partner with an entrepreneur or a co-founder who can support the company financially. Having a second opinion, distributing work, are among the other advantages associated with partnering with a co-founder.
- Klaviyo Co-Founders postponed their first hire till they had $1M Annual Recurring Revenue. Their tireless efforts, the product design, the surfacing email marketing platform rapidly helped them to achieve the numbers.
- Clear Up the Decks - One of the most important ways to survive the crisis period is saving some money on time. For start-up founders, as discussed earlier, keeping the job the job for some time enables them to save some money and invest the same into the business. Even for the big companies saving money and cutting on expenses are crucial, since that helps the company keep going during a crisis.
Ford was in deep trouble sometime in the past. The company was plagued by recalls, low sales, safety issues. CEO Alan Mulally took it over, and incurring extensive losses for three consecutive years, cutting down jobs and cost, Ford came up once again with a net income of $2.7 billion in 2009.
Thus, you don’t require a huge amount of money to get a business up and running. All you need is a great idea, need market research, a less investment business plan, funneling the cash flow, focusing on quality, and scaling the number of customers and vision. It is possible to start with almost no capital and slowly scale up to profit-making with proper business strategies and models and of course, back it up with the latest technology.
