Most times, up and coming business owners tend to find it difficult to come up with the funds they need to start a business. That gave rise to the proliferation of the searches on Google on how to start a business with no money.
As much as these questions are asked, only a few up and coming business owners were able to kick off after the financial setbacks. So, if you are still stuck with the thought of “I want to start a small business but have no money,” I advise that you read this article from the start to the finish.
Can You Rely on Financers to Fund Your New Business?
You may have been toying with the idea of getting a few investors to finance your new business. It is not a bad idea but how certain are you that you will get the needed funds?
You see, new businesses tend to be avoided like a plague, especially when it has to do with funding. Investors becoming particularly frugal with their investments at this time.
While they can sign a million-dollar check for an established brand, the investors will automatically become “bankrupt” when it comes to funding the up and coming/new businesses.
You wouldn’t blame the investors. They would rather stick to the companies and businesses that have been operating for some time and which have considerable understanding of the market.
So, the bottom line is that investors may discard the idea of giving out the funds you need to start a business.
How Can I Kick-Off My Startup with No Money?
So, how can you start a business without any money neither in your pocket nor in your bank account?
I have explained below, the five (5) steps to start a business without money.
1. Ask Friends and Family for a Small Loan
Your friends and family are the two main groups of people that will have firsthand knowledge of the business you want to float. They will not only be your cheerleaders but may also turn out to be the earliest financiers you will have.
The general rule is to come open and tell them “I am broke and want to start a business.” Provided you have a solid business plan and you have every other important aspect of your up and coming business under control, you may be able to swing some chunks of money from your friends and family.
Besides, they can also help you in many other ways. For example, you can write and practise your sales pitch with them for commendations and feedbacks.
2. Dip a Hand into Your Savings
You aren’t entirely broke, or are you? Even if you are broke, you may still have some funds saved for the rainy day.
Well, it’s already raining cats and dogs ahead of your new business and you being broke have tied your hands. Would you rather keep waiting under the rain for a car (investor) to stop by and ask you to get in? Or will you open the umbrella (savings) you have in your hands (bank account) and save yourself from drenching (being tossed out of business even before starting)?
The ball is in your court but if I were you, I will dip a hand into my savings to set my business up and running. Of course, if you have dotted your I’s and crossed your T’s, I am sure that your new business will stand on its feet after a few months.
As a rule of thumb, it is advised that you save up a good sum of money that can take care of the expenses you will make for six (6) months into the business. From the registration of your new business to the recruiting and payment of staff, you need to have some funds to handle the expenses.
The stipulation of building up a six month’s worth of savings is not unconnected to the fact that your new business may not have made enough money by then. So, what the savings you will put in will be doing is to keep the business afloat pending when it can stand on its own – which is usually about six (6) months.
In addition, I must mention that you have to “invest what you can lose.” Considering that doing business is a dicey situation, you may tell how the market will be the next minute.
Therefore, only invest the personal funds you are ready to lose if anything goes wrong. That way, you will be able to focus more on growing the new business into a bigger and more popular brand instead of waiting for the initial returns.
3. Woo Angel Investors to Start a Business with No Capital
Angel Investors are one of the best media you can use to when looking for how to start a business with no capital.
Depending on the relationship you have with the potential Angel Investors, they may also offer your helpful pieces of advice on what you need to start your new business fully. They may also suggest the cheapest business to start pending when you get enough funds to float your dream empire.
4. Cut Down on the Costs
Sometimes, part of the reasons why you need funds to start a business is because the expenses and costs you have lined up are not feasible.
It is time to look at the different costs you have at hand. See if you can cut down on some of them.
For example, instead of hiring a web developer at the onset to design your website, you want to make use of a social media page (such as Facebook Page) for a start.
5. Apply for a Loan When You Need Funds to Start a Business
When it seems like every other way to source capital for your business isn’t working, consider applying for a loan.
Of course, you need to have collateral that commensurates the amount you intend to borrow.
I strongly advise that you consider this as the last option when you are looking to start a business with no capital.
What Type of Business Should I Start?
Now, you need to figure out the type of business you have in mind. Is your new business going to go by the rule of “starting small and growing big” or will it have to be on a larger scale on commencement?
If you are looking at starting a small business, you will discover that it is not entirely impossible to start a business. That is because you will need little finances to kick it off.
However, if you are dreaming of having an Amazon.com kind of business at the onset, you will need to need funds to start a business.
You Can Start a Business with No Money
It is very possible to start a business even when you don’t have money in your pocket and in your bank account.
Using the tips I just shared above, I am sure that you will now realize that your state of being broke or short of funds doesn’t pose a hindrance to your quest to start a business.
What other ways can you start a business with no money?