Looking to start a business with little to no capital and worried it might take money to make money?
Well, there’s good news and bad news.
The bad: 29% of new businesses fail through lack of capital.
The good: you don’t need masses of money to get started. Simply, it doesn’t always take money to make money. Having cash from the outset is an obvious advantage. However, a lack of it shouldn’t dissuade you from giving it a shot.
After all, some of the biggest companies in the world had the humblest of beginnings. Jeff Bezos started Amazon from his garage; Steve Jobs and Steve Wozniak founded Apple in the same way.
That should give any budding entrepreneur huge amounts of hope. Money isn’t the be-all and end-all of your business ideas.
Does It Really Take Money To Make Money?
Looking for ways to make it happen regardless of financial circumstance? Keep reading for 7 strategies for starting a business with no money.
As someone who has started multiple businesses from scratch with zero funding, I can tell you that these tips are priceless.
1. Launch with Services (Over Products)
It’s pretty simply. Businesses can offer one of two things to their clients:
- Products, and/or
It’s for you to decide what your business will offer. However, most service-based businesses require low start-up costs and can be launched immediately.
Think about somebody starting a retail business. They have to fund the manufacture, shipping, storage, and fulfillment of their products. Each demand ramps up the capital required to be a success; cash-flow issues can cripple the operation in no time at all.
Services, by contrast, have none of these cost considerations. For example, you could start selling consultancy services, immediately. Or, resume improvement services, immediately.
Of course, there’s still the opportunity cost of setting up the business.
In other words, you’ll invest your time into establishing the service, which could, in theory, have been put towards alternative money-making endeavors.
Nonetheless, for cash-strapped entrepreneurs, service-based operations are nearly always the cheaper option for getting started fast.
2. Launch Lean
Another key to avoiding start-up costs is to launch your business lean. In today’s day and age, you really don’t need much set up before you start selling.
For example, all too many first time entrepreneurs get caught up designing a logo, establishing a business structure, and creating a content strategy for social media. Some folks even get bogged down trying to understand things like taxes or payroll, when taxes won’t be due for months and they don’t have employees. It’s no wonder they never start!
This is a major mistake.
All you need to launch a business in today’s day and age is a product and a way to start collecting payment. Thankfully, this is super easy with software like ClickFunnels or Shopify.
Once you start collecting revenue, you’ll have plenty of motivation to handle these other details.
You may also find that they’re altogether unnecessary, or better yet, can be outsourced to someone more knowledgeable than you in each of these areas.
3. Network Like Crazy
As the saying goes, it’s not what you know but who you know that matters.
In truth, boot-strapped business owners need both: high levels of insight into their chosen market, and a wide network of people in the industry.
It’s hard to overstate the value of connecting with influencers and key players. The relationships you forge can create opportunities, novel insight, mentorship, and encounters that drive business success.
Online and in-person, aspiring entrepreneurs should start cultivating relationships as soon as possible. Reach out to others to learn from their success and failures; follow them on social media and engage where you can. Do what it takes to expand your network in the field.
4. Get Up to Speed
Knowledge is power.
It always has been and always will be. In the absence of capital, you need a keen grasp of the marketplace you’re entering and the processes that drive success.
Remember, with no money, you have no financial means of overcoming mistakes. Misunderstanding something, missing crucial knowledge, and being behind the times can lead to mistakes. Any error can cripple a business before it’s even off the ground.
You have to turn yourself into an expert. Know the subject area like the back of your hand, realize the competition, and find out who your target customer is.
In short, get obsessed.
5. Seek Outside Investment
Let’s face it, some businesses do require some money to get started.
Even somebody writing their software from scratch needs the time to do it. And, they might have to quit their day job in order to free up the time, which would require a financial cushion.
Just because you don’t have money now doesn’t mean you can’t get it together. There are always ways to assemble sufficient start-up capital.
Friends and family, angel investors, venture capitalists, banks, peer-to-peer lending and crowdfunding campaigns are all potential outlets.
Each option has its own set of pros and cons; some will be easier to solicit than others. Nonetheless, investment opportunities are available if you’re willing to look for them.
6. Do It in Your Spare Time
Starting a business in your spare time has numerous advantages.
A primary benefit is financial in nature. You continue working in your current role, meaning your earnings remain the same. This mitigates the financial risk of quitting everything to start a business.
Instead, you dedicate your spare time to bringing the idea to fruition. Expect late nights and working weekends in the process!
Later, when the business is operational and generating income, you can leave to devote your full attention to its growth.
If you don’t believe me, this is always what the famed Gary Vaynerchuk advises too.
7. Start with the “MVP”
MVP is short for a minimum viable product.
In your bid to save money, it can be an absolute business lifesaver.
Think of the MVP as a prototype of your final product/service. It’s the cheapest, lowest-risk version of your final product or service that you can bring to market.
The MVP should be functional and demonstrate the key features of any final product. This allows you to test it out and see how people respond. The results reveal its potential viability and the possible need for alterations.
As such, MVPs are a way of testing the water without going all in. The fact of the matter is that you don’t know if your idea will be a hit. The MVP means you can verify that without investing excessive amounts of time and/or money.
Here’s some more MVP advice to read up on the topic.
Take Money to Make Money (Final Thoughts)
Money can be a boost when launching a new business, as many businesses fail through a lack of funds.
Nonetheless, there remains a long and reassuring history of businesses succeeding from humble origins.
They prove unequivocally that it doesn’t take money to make money. Rather, it takes creativity and commitment. As the great entrepreneur and investor Grant Cardone sales, “Money follows commitment.”
Looking for more money-making advice when you’re starting from nothing? Click here to learn how to start investing when you’re broke.
Do you have questions about whether it takes money to make money? Ask them in the comments below and I’ll share feedback!