Starting a business with no money may sound impossible, but it can actually be a best-case scenario in some cases. After all, if your business encounters some serious hardships, you don’t wind up losing your entire life savings. And if it succeeds, you’ve turned nothing, or very little, into a thriving income stream. That’s quite the Midas touch.
To help get your business started on the right foot—and with no money—we brought in the big guns. Our friend, and small business mentor, Len Briskman, helps us bring those big business dreams to your small-budget reality, question by question.
The short answer is yes—but the good news is, it doesn’t have to be your money. Two great ways to get funding from nothing are loans and grants:
When you’re starting from zero, the best way to raise money is to be patient and get clever.
It’s possible to get the interest of banks and investors with one strong idea and no money of your own, according to Briskman.
"It’s possible to get the interest of banks and investors with one strong idea and no money of your own."
But he cautions that that idea needs to be really cutting-edge: Tech, software, and medical start-ups have the best shot.
If banks aren’t biting, here are some of the best strategies for raising money from nothing to start a business:
Forbes expert, Ryan Westwood, laid out four tips for would-be entrepreneurs who are short on cash: pivot, grind it out, get creative and differentiate yourself.
Ryan would know: He's covered the CEOs of so-called "unicorn" startups for years. A unicorn is a start-up that is privately held (meaning it's not offered on the stock market) and valued at over a billion dollars. Current unicorns include Uber, Airbnb, Credit Karma and Reddit. All of them started, once upon a time, with a valuation of zero.
Let's break down the four steps that could take you from zero to billion-dollar hero:
1. "Pivot. Use services to generate cash flow and fund a product-based business."
Your business doesn't have to have a flashy start. In fact, starting with freelance work or even a regular job in your field can be the best way to raise cash for your business—and get some experience, too.
Westwood uses a software-based example: He started his current company, Outbox Systems, with money earned from building software integration for another company. This works for lots of other business types, too. Try applying for jobs with potential competitors (just read their non-compete clause carefully) or do work for friends, family and neighbors to earn money and build credibility in your field.
2. "Grind it out. There's no substitute for sweat equity."
"Sweat equity" means value added to a business or property through hard work. The ability—and desire—to add sweat equity to your business is what separates successful business owners from failed ones. Business ownership is much harder than a job. There's no guarantee of a paycheck, and no higher-ups to fall back on. The key to making a from-nothing business work is just that—work.
3. "Get creative. Funding sources are everywhere."
Westwood suggests 5 creative ways to get funding for your business:
Using your resources in new ways means trying to generate money from resources you already have on hand instead of looking for outside investment.
Westwood gives the example of a company where employees took on extra consulting work to raise cash for the company. When you're just starting out as a company of one, this tip is very similar to Westwood's #1 piece of advice: Pivot to services until you can afford to run your dream business.
Getting a credit line means taking out a loan or getting a credit card. You'll use this money to cover expenses until you start generating profits. Beware of high interest rates if you go with this option.
We've already broken down incubators, accelerators and crowdfunding in the previous section, but as a refresher, incubators and accelerators are investors who agree to fund and mentor your company in exchange for a cut of future profits.
Crowdfunding means raising money through donations from interested consumers. (Kickstarter and Indiegogo are popular crowdfunding platforms.)
4. "Differentiate yourself. Small things make a big difference."
There's no such thing as a unique idea, but there can definitely be a unique execution. How is your business achieving its goals better than its competitors?
"Once you're profitable, it'll be easier to stand out. At the beginning, when your business is little more than an idea, tout big clients and prominent investors as signs your business is ahead of the pack."
The problem with starting a business with no money is that at some point, you've got to have money. Most entrepreneurs solve that problem with loans or investment, but what happens when you're really starting with nothing? You downsize your dreams and start bootstrapping. You can start the following businesses with less than it costs to buy a pair of concert tickets:
Remember: If starting a profitable business was easy, everyone would do it. Starting with nothing brings its own challenges, but it comes with less risk and awesome bragging rights. You go, you. Just don’t forget us once you make it to the top.
https://smallbiztrends.com/2015/04/businesses-you-can-start-for-less-than-100.html© 2019, Consumer Agent Portal, LLC. All rights reserved.