You may be considering starting a small business for many different reasons. Maybe you want to earn extra income to pay off some debt. Maybe you are tired of working for “the man”. Whatever their reasons, entrepreneurs come up with the most amazing business ideas. But there are even more businesses that never get started because of a lack of capital. Someone may have a winning idea, but they assume that it will never take off without major funding behind them.
Even though it seems that every new startup receives millions of dollars from venture capital firms, we often don’t hear about all the startups that burn through those millions of dollars just to finally fizzle out and shut their doors forever.
If you have a dynamite idea but no money, don’t let that stop you! Of course, you will have ridiculously long days and you are going to be stressed much of the time. But they will just make your success that much sweeter when it all comes together.
Here are seven tips that can help you get your idea off the ground with limited funds.
1. Do what you know — Start with the familiar, rather than trying to start something new. Harnessing your existing skills and knowledge means that you can rely on them longer before turning to expensive outside help for answers and advice. Sometimes the only thing that you need to be successful is sitting right between your ears.
2. Play on your home turf — Don’t keep your pursuit a secret from the ones that can help you the most. Tell everyone you know exactly that you are doing. Start with your family and friends, then announce it to business contacts and past colleagues, so that they can help spread the word or put you in touch with the right people. Start calling everyone number in your book, and get it into your social-media profiles. It is these contacts that will believe in your brand before strangers will, and bring credibility to your company when it spreads to a larger audience.
3. Low cost equals high profitability — Don’t spend any money that doesn’t directly lead to revenue. It might seem like a good idea to boost your image with metal business cards or renting an office in an expensive building, but your initial customers aren’t going to care. They may prefer to see your business sense if you work out of your garage, than if your invest in antique office furniture for your downtown office. Knowing the value of each dollar invested can mean the difference between a growing budget and a blown budget.
4. Don’t let debt management replace profit reinvestment — It can seem like a quick solution to simply use your credit card to finance your startup and wait for the money to start rolling in. While this can help to purchase essential items or services that drive revenue or boost profit margins, acquiring debt by purchasing new computers, office furniture, mobile phones and other supplies can add up quickly. Rather than buy everything up front and try to keep up with interest payments, use company revenues to finance your purchases. Not only with this eliminating debt stress, it will allow profits to grow more quickly and increase the chances of your business being successful.
5. Track your sweat equity — Any new venture will require you to work around the clock to take care of every aspect of the business. You will be required to do the job of several people at once. But this hard work should not be for nothing. As you build your brand, you increase the value of your business. Your sweat equity will be very important if you ever decide to sell off a portion of your company or take on a partner.
6. Use free tools before paying for them — Never before have there been so many free tools available to business owners. From online training courses to free advertising and marketing. Social media is also changing the way that businesses small and large gain exposure and engage with their customers. With a little bit of self-instruction you can spur some buzz for your business for no money at all. Not only does this allow you to reach out to your customers and let them know what you are offering, you can listen to their feedback and adjust your strategy without engaging expensive marketing firms.
It is also possible to engage with traditional local media who are often very responsive to interesting requests. Not only can this establish you as the local authority, it can be a stepping stone to a larger audience and help generate free press.
7. Get ready to dance — Any new startup requires you to work. Everything needs to be planned, organized and built. When you are starting your business without capital, you need to do everything yourself until you have the revenue to hire someone to take it off your hands. This means that you may be making cold calls, handling customer support, tracking down accounts receivables, and running the core business as well. But, if you are successful at dancing every position, you will also enjoy the applause.
If you have an idea, but don’t have extra capital, don’t let that stop you from taking the first steps and testing its potential for success. Will it be a walk in the park? No! But a true entrepreneur would never let a thing like hard work and no money stop them from turning that idea into a the next Uber success.
Featured image credit: www.shutterstock.com
Mar 02, 2016
Mar 02, 2016
