Money shouldn’t necessarily be the reason a great idea gets shelved but sadly, a lack of cash is often the biggest reason why entrepreneurs put their plan on hold. It’s easy to assume that the only way a business will get off the ground is with major funding or the ability to raise ridiculous amounts of money, but that isn’t always the case. Fortunately, starting a business with no money (or very little) is entirely achievable according to Instant Offices.
First, a few success stories for inspiration:
- Richard Branson’s probably one of the most inspiring stories for any entrepreneur. With just £300 from his mother he started his magazine ‘Student’, which was the catalyst for the entire Virgin Company. Today he’s worth over 5.1 billion dollars.
- Having pooled together $8000 of their own cash and taking out loans, the three founders of Starbucks took their idea and ran with it, turning the company into a billion-dollar company almost 10 years later.
- Billionaire founder of Topshop Philip Green started his company with $20 000. He used the start-up capital to import jeans from the Far East to sell to London retailers.
5 low-cost things to do in order to get started
1. Source cash in creative ways
When bank loans, pitching to investors and other funding methods aren’t an option, creative entrepreneurs find a way to raise the cash they need.
Start by looking at what you already have, like savings, investments or retirement funds, and only invest what you can afford to lose. If you don’t have any savings to tap into don’t worry, there are loads of creative ways to look at raising the cash you need.
In 2008 Cynthia Kersey threw herself a 50th birthday party and invited everyone she knew, asking them to each donate $100 instead of a gift. With the money she launched The Unstoppable Foundation, a non-profit which focuses on giving children access to education.
The two founders of Airbnb managed to raise $25 000 for their business by buying cereal in bulk and boxing it with a clever name. They sold their Obama O’s at a Democratic National Convention for $40 each and managed to raise the cash they needed to fund the now billion-dollar company.
Two more ways to source cash:
- Angel investors: These are wealthy individuals who invest in exchange for partial ownership of a company.
- Crowdfunding: If you believe your idea is good enough why not take it to the masses and try to attract funding
2. List your connections
It’s not what you know it’s who you know, a statement uttered so often in business because it’s inescapably accurate. Start by making a list of connections and consider how they could help you. Do you know someone you could trade skills with? Perhaps you know someone that could build you a website for a minimum cost, or introduce you to their network of business contacts in return for your skills on a project of theirs? You could even consider selling your services to raise money.
3. Start small
Instead of launching a business with a full product or service offering, simplify your strategy and start off small. It not only takes off the pressure significantly, but by concentrating on one product or service you’ll save on initial cash outlay. Offering a single service or product in the beginning also enables you to focus on a defined target audience, building from there as the concept strengthens.
4. Be creative
Make something that you can sell online. If the product is good enough, marketplaces like Etsy, eBay and Amazon may just do the work for you by marketing and selling it to their immense audiences. If you’re not into making your own products, how about reselling other people’s products? Some of the biggest fashion ecommerce sites are based on this principle, curating and selling items to their own communities. If you have a skill or a speciality, all you need are the tools of your trade to start a service business, this requires very little investment and is a great way to start small in your local area.
5. Stop procrastinating
Fear of failure is one of the biggest killers of great ideas. Don’t wait for everything to be perfect before you start your business, and don’t let a lack of cash stop you from developing something that could end up paying off in the long run. 4 Biggest Expenses to Consider When Starting a Recruitment Business (and How to Avoid Them)
Although it’s possible to start a business with next to nothing, here are a few of the unseen costs that often stump budding entrepreneurs in their tracks.
Here’s a few of the potential challenges and how to overcome them.
1. Paying for Supplies
Challenge: This includes specialised machinery, equipment like computers or printers, basic office supplies and raw materials. The cost of buying all the equipment you need can quickly become overwhelming.
Solution: Avoid stress by reducing your needs as much as possible, sourcing cheaper supplies wherever you can or whittling down your product or service offering as much as possible in the beginning. You could also trade services and barter to get your hands on what you need.
2. Office space
Challenge: There’s a reason why some of the most successful startups in the world launched in a garage. Office space can be notoriously expensive depending on which area you set up in, and for a new business it can quickly become a stressful cost, especially in the beginning.
Solution: Flexible office space is a fast-growing trend among solo professionals and entrepreneurs today. Renting space at a desk in a local business district is not only far more affordable for a new business, but flexible and shared offices also give you access to a host of pay-as-you-go office services that you can use as and when needed.
Challenge: All great ideas need momentum in order to grow, and the only way to get your idea out there is to market it, whether though a website, paid advertising online, print ads or other marketing services. When trying to market your business the costs can really start adding up.
Solution: Don’t underestimate the power of family and friends here. Tell everyone you know about your new business, including business contacts and past colleagues. Networking will help you market to a larger audience by simply using word of mouth from the people you already know. In addition – don’t spread your marketing efforts too thin, instead focus on one or two key areas and grow those. For example, start a Facebook page for free and build it up before you consider investing in a website.
4. Licenses and permits
Problem: Unfortunately this is one thing you can’t really avoid when starting a business. One of the first things you should do is research the types of permits and licenses required to operate in your area or industry of choice.
Solution: In the beginning you could tweak your business model to avoid having to spend money on a license right away. For example, some home businesses don’t require a license and some websites operate in jurisdictions where they may not be required for certain products.
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