Opening and maintaining your own business is not only a way to earn money, but also a way to achieve your dreams in life and find personal fulfillment. But, how to start a business with no money?
While it is easier to open a business when you have money to invest, it is also possible to start a successful business when you have no money in the bank. With intelligence, perseverance, and dedication it can be achieved.
If you are ready to work hard and learn from your mistakes, you have the unique opportunity in life to build a successful business.
In this article, we will show you how to start a business when you have no money as well as give you some resources that can support you along your journey as an entrepreneur.
Opening Your Business
1. Keep Your Current Job.
By keeping a secure source of income, you will not have to worry about mortgage payments, credit card debt, car payments, etc.
Ideally, when your business begins to grow, you can gradually move, from your current full-time job to a consulting or part-time employment.
Over time, you will be able to work full time in your own business. Although in real life this process does not usually happen as described. Some people tend to give up everything to pursue a dream that has not yet materialized.
This first step is important if you have to support your family. Do not risk the future of your family by abandoning your primary source of income to pursue your dream.
If you want to open a business soon, avoid signing an employment agreement with a clause that restricts your opportunity to look for another source of income. Do not hesitate to go to a lawyer to review the contract.
2. Design a business plan.
How will you earn money? If you can not answer this question, you should not start your own business. The goal of any business is to make money. That’s why you should have a detailed plan before embarking on the adventure of starting your own business.
Try to answer the following questions (they are fundamental):
- How much will it cost to offer your product or service to the client?
- How much will you charge the customer for your product or service?
- How will you scale your business?
- How will your business offer a better option than the competition?
- Do I need to hire a professional to help me get started? Can I start without the help of anyone?
3. Analyze the competition
Who is your competition? How much do they charge for the product or service that you will provide? Can you this product or service at a higher quality level or for a lower price? If so, congratulations, you may be successful.
Carry out a study of the market you intend to enter, as well as the businesses that have (and have not) been successful in the market.
Not all businesses have the same degree of difficulty when entering the market. The business research company, IBISWorld, recommends that in some industries it is better to aspire to have a small business that has low entry costs and high growth potential. Human resources, management of social benefits, online auction, online sales, ethnic product supermarkets, liquor stores, Internet advertising, among others are some examples of these industries.
4. Study and test your ideas.
Preparation and planning are essential before establishing a business. If possible, look for opportunities to develop “group tests.”
For example, if you plan to open a restaurant, first try cooking for a church, a group of friends or relatives so you can determine if you can handle the hectic environment of running a kitchen and also judge whether or not your food is well received.
Also, be sure to survey your target audience to help you find out if your potential customers will feel compelled to do business with you.
If the findings of your research contradict your current plans, do not hesitate to change your business plan or even start from scratch. Doing so can be frustrating, but it is better than risking your entire business because the original idea did not resonate with your target.
5. Look for opportunities to acquire skills without spending a lot of money.
If you have a business idea, but do not have the skills or training necessary to carry it out, get the training you need at a low price.
Try to reach agreements with institutions or companies that provide training to train you in exchange for a service that your future company can provide.
Look for a part-time paid internship. Look for opportunities to acquire practical knowledge through your friends, family, or some well-known expert in the field. You must maintain a source of income while doing this, in case you have to extend your training period.
If necessary, go back to the classrooms, apply for a scholarship and a financial aid package for which you are eligible. The paperwork can take time, but the results (that is, the money you will save) will be worth it.
6. Make the most of the goods you already have.
Are you starting a business from scratch? You should take full advantage of the resources you already have at your disposal.
For instance, you can use your car as a company car. Turn your garage into a store. Some of the largest companies today (such as the famous Apple and Facebook) started in simple places, such as garages, basements, and bedrooms.
If you have a house, instead of renting an office, use it as the initial location of your business. In this way, you will save the money that you would spend on rent. Regarding taxes, you could declare part of your house as the office of your company.
7. Optimize your employee planning
Paying employees can be expensive, especially if you want to hire trained professionals. In the beginning, keep your staff as small as possible to reduce costs.
The United States Small Businesses Administration recommends not spending more than 50% of the earnings on the salary of employees.
If you can carry out the entire business without having to spend a fortune on staff, do it. If not, employ the least amount of people possible.
As the business grows, there will be a natural need to hire more people.
Take into account, depending on where you live and the type of professionals you hire, you may have to pay for medical insurance and other benefits in addition to their salary.
8. You can request a loan from your friends or family.
If you want to start a business from scratch with no money, you may reach a point where you simply can not continue without a little investment.
For example, you may need an expensive piece of equipment that you do not have or can’t borrow.
Many small businesses can flourish with the help of a good friend or relative. However, before you get a loan, be sure to clarify the terms for the loan. How long you will have to repay the loan and how much each payment will be, are some of the specifications the loan terms should cover.
It may be a good idea to have a clause that specifies that, if the business fails, you will have additional time to pay the loan or not have to pay it at all if stipulated in the loan contract.
9. Apply for a government loan for small businesses.
Many governments offer loan or grant programs specifically designed for small and medium-size businesses.
Typically, these programs require that companies meet specific requirements to ensure that the money is appropriately spent, and are usually the following:
- Be profitable
- Meet the characteristics of a small business.
- Operate in the country or in territories of that goverment
- Have enough capital
- Be able to demonstrate the need for the loan
- Able to justify the investment of the money
- No outstanding credit with the government
10. Advertise your business
Even the best business in the world will fail if nobody knows of its existence.
If you can not pay to advertise on television or an advertising panel, you can print flyers at home and distribute them on weekends.
Do door-to-door advertising in your neighborhood. Make a poster and hang it at the entrance of your business. Put on a fun costume with your company’s advertisement and stand on a corner of a busy street. Every funny or shameful thing you can do to make your new business known, you will have to do it.
Nowadays, you also have the opportunity of reaching your customers through the Internet with a successful campaign via social media. For a small business, social networks are an effective way to reach potential clients.
The best part of social media marketing is that your company can join all major social networks at no cost. Create an account on Facebook, Instagram or other social networks, and encourage your customers to follow your pages and possibly offer a small benefit to those who do.
Remember, virtual clients, are constantly bombarded with ads. Try to make your digital content truly fun or eye-catching. This way you will stand out among your competitors.
1. Cultivate your passion and determination.
Opening your own business can be quite tricky, especially at the beginning stages when you have to deal with the complicated aspects of your business model.
If you love what you are doing and are passionate about it, being a business owner won’t feel like a job.
If you are passionate about your work, the determination will come to you naturally, and you will always give it your best until you are satisfied with the results.
Find a field that you are passionate about and hone your skills in those areas through training courses, school, self-training, etc. Find a way to earn money based on your passion instead of working for somebody else.
2. Prepare to reinvent yourself.
If you start your own business, you might see that you need to make drastic changes in your habits and even in your behavior to match the demands of being an entrepreneur.
Flexibility is a great advantage if you are the owner of a new small business since you might have to reinvent yourself a few times until you find the right approach to succeed in the niche chose.
Remember, starting your own business requires many hours, focus and determination. Adjust your lifestyle to make sure you can give your new job the time and attention it requires.
For instance, if you do not you like to get up early or have little energy and the grand opening of your new restaurant is in a week, change your habits now. Set your alarm earlier and make a waking up early a new habit.
3. Take advantage of unconventional funding sources.
Nowadays, for people who have a great idea (but not money), it is easier to get the attention of investors.
Consider, for example, promoting your project on fundraising sites such as Kickstarter. Fundraising websites allow you to pitch your business idea online so that potential investors can decide to invest in your business.
Another way to get funds for your small business is to enter funding competitions which are often promoted by business schools. Generally, in these competitions, the winners obtain a sum of money to start their business.
4. The customer is your number one priority
One way to ensure that your new business differs from established competitors is to excel in customer service.
Customer values when small businesses show they care. Make your primary goal to please the customer through quality products and or services. Strive to understand what the client needs and preferences are. Find the best way to meet their needs.
The main focus of any business is customer satisfaction (consequently, the second focus must be quality, costs, profits, appearance, the functionality of the product or service, etc.).
Remember that the client is always right, even if he starts to act unreasonably. However, this doesn’t mean you have to give in to any absurd demand of an upset, but that you have to treat them with respect at all times.
5. Provide a better offer than your competitors.
Money talks. For the average customer, money is the starting point.
Consumers are looking for something worth the money they are going to pay, and they hate the idea of being ripped off. Offering the same product or service for a lower price than your competition often guarantees great success.
However, ensure your profit margin is sufficient to cover all your costs when deciding the price structure of your business. You must always be able to cover your expenses; otherwise, you will be on a loss.
Always provide the exact (or better) product or services you advertised.
Don’t use deceptive advertising; it will ruin your business and your reputation in no time.
6. Let your creativity replace the money.
In the beginning, minimize the need for cash, something that will be difficult at the beginning, and increase sales activities to a high level through the development and implementation of your ideas and creative concepts. Always think big. A great idea can be worth thousands.
7. Make contracts and form partnerships with caution.
Be sure to take every partnership with caution. Hire or partner with only people you trust fully.
If you decide to partner with a person or company, be sure to register the company’s terms and your terms in documents before establishing an official business relationship.
Hiring a lawyer to formulate the contract for your business is an excellent idea. The fees of a lawyer can be high, but a well-stipulated contract can often protect your initial investment in the long-term operation of your business, preventing your partners from taking advantage of you.
8. Strengthen your ability to negotiate.
When everything else fails, negotiate, barter, sell. The ability to negotiate with confidence and sagacity is one of the characteristics that define a true entrepreneur.
Avid negotiating skills are a valuable asset to have since it strengthens your innate ability to do business.
Whether you’re hiring a new employee, buying a new team or starting a partnership, do not be afraid to make an offer that may benefit you, the worst thing that could happen to you is that it will not be accepted. If you take risks, you could achieve pleasantly surprising results.
1. Trust your family, friends and loved ones.
Family and friends can provide you with great emotional support on your journey to success. When stressed, this support can make the difference between success or give up on your dream.
Talk to your family and make sure they are aware of your business plan since you may have to resort to them for time, money, health, advice, etc.
After becoming the boss of your business, you could be tempted to become bossy in your home too. Keep family matters, and business matters separate, for example, establish the rule of not talking business during dinner.
2. Familiarize yourself with business legality topics
Knowing the legal aspect of setting up a business and running, it’s valuable for an entrepreneur.
Familiarizing yourself with business legal matters before starting your business is an excellent idea. By having solid knowledge in this area, you can save money that you would probably have had to invest in legal advice. You will also avoid headaches when trying to interpret complex business documents and taxes.
Nevertheless, if you are not familiar with a given business legal topic, it’s best to seek advice from a professional.
3. Take care of your physical, mental and emotional state.
If you do not have health, you could lose everything. A healthy body, mind, and soul are essential to succeed in your own business.
In the beginning, you will spend many hours working; nonetheless, always try to devote some time to exercise, sleep, friends, and any leisure activity you like to do.
4. Have the right balance between your life and your work.
Live a balanced life, even if you are going to open a business without a penny in the bank.
Losing the perspective of life will make you miserable in the long term (not necessarily on the financial side, but emotional), so it is a risk that is never worth taking.
Never miss a night of sleep, do not kill yourself working, always dedicate time to your family, to your hobbies and, of course, to yourself. Your life should be a source of joy and passion, not merely an opportunity to work.
Also, never use drugs to improve your performance or to replace your healthy diet or exercise routine. In the long term, this will cause you an imbalance in you, which could make you take irrational decisions guided by your feelings, which is never good for business.
Business tips before you begin your
Avoid committing to long-term contracts. When you start your business, avoid long-term rents or indeterminate employment contracts. Since the future of your business is uncertain, especially during the first year (the experimentation phase), undertaking long-term commitments of this kind is a bad decision. Just do not do it.
If possible, avoid applying for loans. Use cash whenever possible. Keep it that way.
Do not frivolously share your business ideas with others. New business ideas are hard to come by, and people could steal yours. Prevention is better than regret.