If you aspire to become a business owner but are unsure whether to dive in the process due to lack of funding, it’s time you know that it’s possible to start a business with no money.
By Nikita Tambe | Forbes Staff.
Lusaka, Oct, 20 – The reality is that all businesses require some type of investment. But if you don’t have money at the moment or have minimal financial funds at your disposal, don’t worry. You may still pursue your venture, as long as you come up with a solid game plan and plan for hurdles you might come across along the way.
Also Read: Sustaining a business in a struggling economy – Valden Findlay.
Intrigued? Keep reading to find out how to do just that. If you’re exploring the idea of entrepreneurship or would like to launch a business with no money, these tips can set you up for success.
◾Keep Your Day Job
Once you decide to start a business, it may be appealing to immediately leave your 9 to 5 job and fully commit to your venture. Doing this, however, can be risky, especially when you have no to minimal funds available.
If you maintain your job and focus on your business in the evenings, on weekends or whenever you’re not at work, you won’t have to live off your savings. You’ll have a steady income that allows for greater flexibility.
◾Perform Market Research
Before you move forward with your business idea, you should determine whether it’s actually viable through market research.
Identify your competitors and figure out your unique selling point, which is essentially what you can do better than them. Perhaps your services will be faster, more innovative or less expensive.
Also, you can host focus groups and speak directly to potential clients to get a better feel for their wants, needs and buying behaviours. Additionally, don’t hesitate to use social media and online reviews of similar businesses.
◾Write a Business Plan
A business plan is a road map for how you’ll grow your business. With a well-written business plan, you can anticipate potential challenges and plan for them accordingly.
You may also interest employees and investors as well as secure financing. As you write your business plan, emphasize on why your offerings stand out.
Also, avoid industry jargon and utilize plenty of visuals to break up the text and make your plan more appealing. The key parts of a business plan include:
▪️ Company Overview: This is a description of the business you’re about to start. Be sure to mention your business model and legal structure, such as a sole trader or limited company.
▪️ Market Research: You need to summarize your market research findings. Don’t forget to mention details on how your service or products will meet the needs of your targeted audience and highlights you from your competitors.
▪️ Marketing Strategy: Marketing strategy refers to how you plan to promote your business to reach new customers. This may include email marketing, social media marketing or event marketing, depending on the nature of your business.
▪️ Financial Plan: The financial plan should primarily outline what you’ll do to earn and spend funds. Ideally, it would feature a cash flow projections, balance sheet and other financial documents and data.
◾Wear Many Hats
In the future, you may be able to hire help for your business. But while launching, you’ll want to be a “Jack of All Trades,” and handle various challenges and responsibilities on your own.
For instance, if your venture idea is virtual assisting, it’ll be up to you to market your services, perform the work, create client contracts, send invoices and collect payments.
Keep in mind that while you may not be able to do everything perfectly, you’ll learn a lot and save a great deal of cash right off the bat. Hiring help too soon is risky, especially when you don’t have much money to start with.
◾Run a Trial
While you can go ahead and officially launch your business once you have a legal structure, business name and marketing strategy in place, it’s wise to have a small local launch before you go big. This way, you’ll be able to pinpoint potential challenges and make proper adjustments.
During your trial, ask your customers for their honest feedback and what you can do to improve your offerings and service. Chances are you’ll learn about some pitfalls that you didn’t know about before and reduce your risk of failure.
◾Scale Up
Your business will possibly start small. But as you achieve success, meet your targets and goals, don’t be afraid to grow. This may require you to cast your products and services to an expanded market, hire some employees to boost productivity, increase your marketing efforts or find a larger workspace. It will be in your best interest to scale slowly but surely so that you can make and adapt to small changes without impacting your limited funds.
◾Use Free Resources
Believe it or not, there is no shortage of free or low-cost resources to help entrepreneurs and aspiring business owners such as yourself. To find them, perform a Google search and look for workshops, mentorship programs and networking opportunities in your area.
You can also visit your local library and ask about any resources it might offer. Don’t forget to check out national options as well, such as the National Institute for Entrepreneurship and Small Business Development, a premier organization of the Ministry of Skill Development and Entrepreneurship. By taking advantage of free resources, you can lower your spending and launch your business in the most cost-effective way possible.
◾Network
Sometimes, it’s not what you know but who you know. If you’d like to start a business with no money, network, network and network. Build connections with industry professionals, potential investors and other entrepreneurs. They can share meaningful advice, introduce you to others who can help you, promote your offerings to their customer base and even provide you with funding. You may network online or attend networking events in your local community. It’s also a good idea to look for conferences and trade shows related to your industry.
◾Design a Savings Plan:
As an aspiring business owner, it’s up to you to build a savings account for your venture. To do so, track your expenses and identify your costs. You might want to get a business credit card with perks like cash back and travel points.
Additionally, set up a monthly budget and mostly stick to it. While your unique situation will dictate how much funds you should save, a good rule of thumb is to save up to at least six months’ worth of savings for business expenses.
◾Look for Alternative Funding
Fortunately, there are many places you can turn to for small business funding. Here are some options.
▪️ Friends and Family: If you’re loved ones who support your business venture, they might help you with some capital in the form of a low- or no-interest loan or grant. Just ensure that you put the terms of the loan or grant in writing so that everyone is on the same page.
▪️ Venture Capitalists: Professional investors such as venture capitalists offer money in exchange for a percentage of your business profits or stock. You’ll likely need to share a business plan and financial statements to secure this type of funding.
▪️ Angel Investors: Angel investors are different from venture capitalists because they use their personal funds to help fund your business. In many cases, they’ll serve as mentors and provide guidance as you launch and grow.
▪️ Grants: While grants for small businesses are difficult to find and land, they do exist. To find them, turn to federal and state government entities as well as community development corporations.
▪️ Incubators and Accelerators: These programs are solely designed to mentor high-potential businesses. If you happen to be a part of one, you may be able to receive capital too.
▪️ Crowdfunding: Crowdfunding is when you ask prospective customers to provide you with money upfront in exchange for a unique perk or promise down the road. Fortunately, there are many online crowdfunding platforms to help you set up a campaign, such as Kickstarter, Fundly and SeedInvest.
▪️ Small Business Loans: Banks, online lenders and credit unions all offer business loans for small businesses and even startups. Typically, you need to have good credit to lock in favorable terms and low rates.
◾Bottom Line
While money can make it easier to start a business, it’s certainly not necessary. If you don’t have a lot of cash at your disposal, you can still fulfill your dream of becoming your own boss.
As long as you’re persistent, work hard and take advantage of all the resources available to you, you’re likely to succeed.
Unlimited income potential, flexibility, personal satisfaction, creative freedom, and unlimited income potential are several of the many advantages of owning your own business.
Also Read: How to handle risks, criticism, and negativity in business – Valden Findlay.
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