Starting a Business with No Money: Making Things Work Without A* Finances
The dream is that a distant, rich great-aunt will leave you a fortune to set up your own business. But if she doesn’t like you all that much (or she’s fictional), you may have to be more realistic and think about viable ways to start a business with no money.
So for everyone without that rich, elderly aunt, this short guide offers practical advice on market research, funding, keeping your job, and marketing for free.
How to Start Your Business With No Money
Before you even start looking like a business, there’s going to be a lot of research and your vision might look a lot like your friend’s spare room for a while. That’s fine. Starting small and scaling up is always the best way to go when you’re setting up a new business.
Test the Market
Make sure that what you produce (whether it’s a service or good) is needed. Find out what your market wants by conducting market research via social media or search engines. If you make an initial bad product, it could wound your reputation – even if the next product is better. No one wants to be a real-life Del Boy. So test your market to determine what your customers want and who they are.
Establish a Good Business Plan Early On
To gain funding from a credible source other than friends and family, you need a coherent business plan. To keep costs low, you can write it yourself, or pay someone else for a fee.
Focusing on the numbers and being modest on the projected sales will enable potential investors to see how you forecast your business to grow. There’s no point starting a business if it is unlikely to create profit in the future.
Need a Course?
Our Starting a Business Course explains how to successfully start your own business. It teaches you how to write a professional business plan and familiarises you with the legalities and regulations associated with starting a business.
If you require funding from elsewhere to run your business, there are several ways to access it. The most traditional route is to ask a bank for a business loan. However, you should try to keep purchases made with this form of credit to a minimum to avoid getting into lots of debt. Don’t buy everything at once on a credit card, instead try to use your companies’ revenue to finance your expenses.
Try crowdfunding platforms like Kickstarter and CrowdFunder. These allow the public to invest small anonymous donations to a product they believe may work, in return for a reward. You may be able to take pre-orders via this platform too.
Look out for startup competitions for entrepreneurs such as The Pitch and the Responsible Business Awards.
Know Your Service Strengths
To generate cash, a service-oriented business is easy to set up and cheap. If you provide a service that you know people need, you can easily collect funds. These funds can then be built up to generate a cash flow for a secondary business that is product-based.
Try something like trading on eBay, selling stock photography, personal training, cleaning, flyering, and tutoring.
Learn to Barter
Starting a business without access to a laptop or the internet is difficult. Therefore, it may be necessary to barter for a laptop or other services you need but can’t afford. It’s also worth nothing that some competitions for startups include winning tech that can help your business succeed. You could also try prize drawers to try and win the tools you need.
Access Free Technology
You don’t need a fancy custom website when you have no customers. Promote your business for free within a few hours using an online website builder such as Moonfruit, Wix or Basekit. They’ll also host your site for free on their server.
Use the WiFi at a local library or a relative’s house to keep costs down when accessing the internet.
Signing up for Google Adwords can help websites climb higher in the search engine rankings. Adwords is free, but it costs to bid for a paid advert. Alternatively, understanding how to make a website appear higher in an organic search is efficient and free, so this can work well for a startup business.
Market Your Business for Free
Inform friends, family, business contacts and past colleagues about your new business. Use social media to promote your business without spending money. Sign up to Twitter, create a Facebook page, and join LinkedIn. You can also manage business accounts for free on Twitter and see who is tweeting about you or the product in real time. Make contacts with local media, and they may be able to provide you with some free publicity.
You could even try a bit of ambush marketing to get a piggyback from bigger brands (it’s cheeky, but it might be right for you).
Replace Fixed Costs with Variable Ones
Link your costs to your sales. For example, hire meeting rooms by the hour and staff by the day. This means you can control how much you are spending and change costs quickly to meet the demands of your business.
It’s easy to hire freelancers through sites such as People Per Hour. And there are companies out there who will take delivery of your stock, manage orders and pack them as well as distributing them to customers, all on your behalf. myWarehouse has no set-up fees, no fixed fees and no minimum contract, you simply pay for the service as you require it.
Make Use of Low-Cost Services
An excellent way to get hold of branding materials such as business cards is by using websites such as Vistaprint. Online services are often cheaper than similar high-street businesses and can be a good way to save money. Before purchasing, make sure you take a look at coupon websites to see if you can save even more money.
How to Keep Your Business Viable
Starting small allows you greater flexibility to tweak things to get them right, and creates a lower risk should the business struggle or fail.
Build Your Business Around What You Know
Make sure you use your skills and knowledge, at least for the first product or service. Venturing into uncharted territory can be deadly and will require you to rely on outside sources. Building a business on your personal expertise eliminates the need for excessive amounts of outside assistance and expensive business consultants.
Understand the Law
When it comes to legal and financial services, Melani Gordon, CEO of TapHunter, claims that “cheapness isn’t always the best”. You may need help with contracts, patents, trademarks, taxes, bookkeeping or financial reports. Find companies that can provide an effective service. Quality should take priority over price.
Hold Onto Your Job!
If you are currently employed, keep working. Setting up a new business is risky, so only leave when your venture can pay you a wage. It’s not easy, but it is feasible to combine working with starting a business in your spare time.