How to start a business with no money
Can you count how many times you’ve thought or said “I’ve got a great idea for a business. But I don’t have any money to start it up.” While some entrepreneurs are blessed to have a team of investors lined up around the corner or an aunt with deep pockets, not having money is no excuse. If you are confident that you have a product or service people want, don’t allow the lack of capital to deter you from your business goals. By knowing your product or service, understanding the basics for your business, and knowing where you’re headed, you can bootstrap your way to a successful business. Starting a business with no money might initially seem like a far-fetched idea, but it’s not impossible.
Before we get started, copy the Funding Primer Google Sheets template to your Google Drive and start organizing your thoughts.
How can you start a business with no money?
Know your product or service
In order to create a successful business, you need to know if there is demand for your product or service. You have to understand who your customers are, how much competition you have and you definitely have to be confident that you will be profitable. When thinking about your competition, think about what makes you different from others offering the same or similar products. And when thinking about your business, put yourself in your investor’s shoes, would you loan yourself money?
Understand the basics for your business
Before diving too deep, there are several things you should ask yourself (and know the answers to).
What are your goals?
What kind of business are you building? What does success mean to you?
What do you need the money for, and how much do you need?
What will you spend my money on? What are must haves vs nice to haves?
What is the financial condition of your business right now?
What is your cash flow and expected income?
Know where you’re headed
Once you have thought through the questions above, you need to plan for the future and know where you’re headed. There are three main ways for you to grow: small business, steady growth, and high-growth.
A small business is like a local market or a restaurant, they are low risk and likely to produce good income for owners and employees. With a small business, you can easily plan for a healthy revenue every year.
A steady growth business is like a chain (think Whole Foods or 24-Hour Fitness), they are also low-risk and likely to produce good income plus returns for investors. A steady growth business does just that, it grows slowly but steadily.
A high growth business is like an Airbnb, Uber or Amazon, they are high risk and rapidly scalable. With a high growth business you can plan for steep, fast growth with a strong risk management plan.
Skysthelimit.org has broken business funding into three main types: typical (or traditional), lenders and investors. Read our article on How to get money to start a business to learn more!