Do you have a great idea for a new business? Are you unsure how to start a business with no money?
This is an all-too-common dilemma for entrepreneurs. You have confidence in your idea, but not enough money to get the business off the ground.
Thankfully, it’s possible to start a business with little or no funding. Continue reading to discover seven essential ways to start a business with no money.
1. No Substitute for Hard Work
In the beginning, you’re going to have to get in the mud and get dirty. You will probably wear a lot of different hats to grow your business while your team is in its infancy. In fact, your company might be like many others that start with a team of one – you.
Starting a company isn’t as glamorous as it’s often portrayed. Mark Cuban is a perfect example of this fact. He’s a famous billionaire now, but his journey into business started in a run-down apartment, where he worked tirelessly to get his business off the ground.
Cuban didn’t take a vacation for seven years while he taught himself to code and worked with a partner to create Audionet. They ultimately changed the name to Broadcast.com and sold the company to Yahoo for $5.7 billion.
Cuban’s example teaches us the importance of sweat equity. Do as much as you can in the beginning. Make sales calls. Attend networking events. Learn how to do all the functions your business will require.
It’s hard work but if it were easy, everyone would be doing it.
2. Keep Your Job
Resist the temptation to ditch your job to work on your business full time. Instead, use your job as a fund to start your company.
Starting a new business inherently comes with taking calculated risks. If you don’t have a steady income, you won’t be in a position to take risks. As the saying goes, you need money in order to make money.
As hard as it may be to balance your job and business, doing so will help you scale your business faster and allow you the flexibility to try new things.
Take the time to build a solid foundation before you become a full-time business owner. With proper systems and sales processes, it will be easier to grow your team and expand responsibly when the time is right.
3. Perform Services to Generate Capital
Product-based businesses usually require significant income to launch. Research and development of your products is a time-consuming and expensive process.
And even if you go with an existing product, you may have to buy in large quantities in order to get a lower price that is necessary to create a profit margin.
A good solution to this problem is to perform a service as a means of generating startup capital.
Services require little to no money to start. You provide the service, and then you collect the payment.
For example, let’s say you want to develop web design software. You can perform web design for various business to generate cash flow for the development of your software program. Then once the product is complete, you can even market it to these same clients.
4. Seek Small Business Grants and Loans
Be careful about acquiring debt in the beginning. But if you are making sales and need money to grow, a small business loan may be right for you.
Surprisingly, traditional banks usually provide more favorable terms, while online banks are typically easier to meet qualification requirements. Of course, you will want to pay attention to the interest rates so you can pay off your debt quickly. Good credit is usually required although it is possible to secure abusiness loan with bad credit.
Securing a grant is even better than small business loans. The Small Business Administration (SBA) provides federal grants to help small businesses launch and grow. Contact the SBA to see if you qualify.
Even if you do not meet the criteria for a grant, the SBA may match you with funding programs that can help you get your business off the ground.
5. Use Crowdfunding
Crowdfunding is an increasingly popular platform for entrepreneurs to get capital for their business idea. No matter the business venture, popular sites like Kickstarter and Indiegogo are funding new businesses like yours every day.
These businesses allow the public to make small investments of money in a company. In return, the investor usually receives “one-of-a-kind experiences, limited editions, or copies of the creative work being produced,” according to Kickstarter.
There is a science to running a successful crowdsourcing campaign. Do your research and consult with those who have successfully launched a business on Kickstarter before you draw up your offer.
6. Apply for an Incubator
Business incubators are an excellent resource for entrepreneurs with a good idea and a solid business plan. You can apply for these programs and receive helpful assistance upon acceptance. Incubators are known for providing services to startups such as office space and management training.
Most incubators work in conjunction with local and regional economic development organizations. Other incubation programs are financially sponsored by universities.
7. Run a Preview Test
Making a preview offer to prospective customers is a great idea to raise money while validating your business idea.
For example, you can offer a trial or a slimmed-down beta version of your product at a lower price. Customers benefit from “getting in early” for a good price. And it gives you the chance to gauge the viability of your offer and if there is a market for it.
A successful pilot test will give you the funds and confidence to take your venture to the next level. It also allows you to get an accurate picture of your sales process. You can identify where your process excels and where it needs work.
How to Start a Business With No Money: The Bottom Line
Starting a business seems expensive and difficult at the beginning. But, as you can see, plenty of options exist to help you fund your business.
Successful businesses solve problems for their customers. They also solve problems within their business by overcoming obstacles. The first obstacle for most entrepreneurs is how to start a business with no money.
Don’t let money keep you from making your business a reality. Look at it as a chance to overcome an obstacle and start your company. Use the above tips to take the next steps now.