Starting a business without initial capital is a process of building a stable foundation while minimizing risk.
There are three things needed to start a company:
Since we’re doing this without money, we’re left with just Customers and Products. The easiest way to get this started is with a side-hustle. The main idea is that you keep a stable job to provide you regular schedule and the financial stability and work on your business during nights and weekends.
Your side-hustle doesn’t have to be the exact business that you will start but it should move you in the general direction of your interests. If you think your business will be in the food or restaurant space consider delivering grub-hub as a side-hustle. Want to get into real estate? Look into being an AirBnB host. If you’re starting a beverage company, consider working at a bar or restaurant at night.
Think of your side hustle as both some financial capital but also as market research. There are a lot of examples of entrepreneurs getting started this way. Michael Dell started his computer business being a student and having a side-hustle of putting together computers for your friends.
Daymond John, the founder of clothing company FUBU, was working in Red Lobster while he was getting his business off the ground selling hats on New York street corners.
The founder of Mattel sold picture frames as his main thing and used the scraps of the picture frames to start building and selling dollhouses.
Lara Merriken, was working in Whole Foods stocking shelves working on her product the Lärabar, which gave her insight into how Whole Foods works and it also gave her access to store buyers willing to try her product. This access ultimately led to her big break.
Starting your business as a side-hustle gives you the advantage of financial stability but it also gives you a unique view of business problems. It may also give you access to customers.
If you’re trying to start a company with little or no money one thing you try to do to get initial cash flow is to get a customer to pay upfront. How do we do that? You build a prototype or sample.
Prototypes don’t have to be expensive, they can be drawn on a piece of paper, cut out of cardboard, hand made models or recipes baked in your oven. Certain businesses are harder to start without funding but most business ideas can be prototyped.
If you’ve built a prototype or sample of your product then services like Kickstarter, Fiverr or Etsy can give you a platform to sell products your product directly to consumers. These types of services require very little or no up-front capital. You can get customers before committing to a lot of financial up-front risk.
If you have a service business you may also be able to charge an upfront-deposit or down-payment giving you initial cash-flow. This is common in many consulting, construction, and subscription businesses.
Your early samples and prototypes can also give you customer feedback on what people like or dislike about your product.
Initial sales are unlikely to have a significant initial financial impact but they will help you continue to improve your product and they will get the initial flow started. Initial sales are sold one-by-one, so expect to get personal when you start the business. As your product or service gets out into the real world, you’ll start to develop word of mouth about your business or product.
For companies that have Money – they can spend money to get customers. But starting a company with little or no money, you need to make your products really great to get the word-of-mouth and attract more customers.
As the business grows, the revenue flow starts to increase and you’ll be able to spend more on growth, hiring, and talent. Ultimately every small business can be the catalyst for a larger one and the hardest part of starting a business is actually starting.
Good luck on your journey!
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