How to Start a Business without Money
"I have a great idea for a business. But I do not have the money to start it." This phrase is something that I hear again and again. . . and again-from students, friends, and sometimes even colleagues. While it is true that the generous lines of credit, the team of investors, or uncle with deep pockets can be made starting a business easier, not having money is not an excuse. If you are sure that you have a product or service people want, do not allow the lack of capital to dissuade you from your business goals. By turning, milling, the more creative, and differentiate yourself, you can bootstrap your way to business success.
1. Pivot. Use the service to generate cash flow and fund product based business.
Starting a service-oriented business is easy: First, you provide a service, and then you raise funds. But based business products often require significant initial capital to get it up and running. If you are in this situation, consider selling services to generate cash flow and to build up funds for product-based business.
My current company, Outbox Systems, began in this way. We want to connect the two software applications, but we do not have the capital to build integration. Knowing we have to make money to fund the development of our products, I approached the channel partners in AtTask and asked if I could build software for their integration. Incidentally, the customer is required to integrate the company AtTask AtTask and Salesforce and are willing to pay us $ 125 per hour for building integration. Then we turn around and resell the product to others. A typical tech entrepreneurs think, "Collecting money, build the software." But we turned the model on its head and basically got a company to help us develop the intellectual property for our business.
2. Grind it. There is no substitute for sweat equity.
Sometimes you have to go into the trenches and make it happen. During the first two years of business at my previous company, Support Care PC, I knocked on the door, working the booth of my own, and my own close deals. I set up a table at a local college business school, hired five students to work only on commission, and knocked on the door of 7-8 hours per day looking for business. For those two years I did not receive a salary. But I believe in my service, and I believe we can succeed. I, as a billionaire entrepreneur Elon Musk said, "hell bent on making it work." The hard work finally paid off.
3. Get creative. Sources of funds everywhere.
Traditional entrepreneurial philosophy states that, to be successful, you have to stick with one thing and do not deviate from it. But desperate times call for desperate measures. If you are having trouble finding access to funds, there are some creative things you can do, as follows:
Using current resources in new ways. Like most young company, we are experiencing a crisis of cash flows on a PC Maintenance Support. We have about 50 employees, and we want to protect the work of everyone. We look at all the departments and all of our employees skills sets to see where we can generate revenue. Some employees in the technical support department stepped up and offered to develop software for other customers. Then some marketing department offered to develop a website. We added a website and software development services suite us and landed a contract with Nationwide Insurance, taking the company from negative cash flow to net income of 15% per month in three months. This gets investors interested in our company, and it allows us to have the money we need to return to our core services.
Get credit limit. It is not uncommon for most startup businesses rely on credit lines. The American Express Plum Card, for example, offers a 60-day period for payment rather than the usual 30-day period. Some banks or credit institutions offer loans that are designed to allow growth in the early stages of business. A word of caution: to keep from getting bogged down in debt when you are trying to expand the business, maintaining a minimum purchase.
Use Incubator. If you are sure you have a solid idea and a business plan that can be applied, you may want to consider a business incubator. Once received, the program is specifically designed to provide funds to help finance a startup company. Sometimes they offer office space or administrative services together. Most of the incubation program sponsored by the organization of local and regional economic development, and some are sponsored by colleges and universities.
Search Accelerator. It's like an incubator in that they are designed to provide funds. However, accelerator expect a quick response to investment. If you are prepared and ready to hit the market quickly, this is a great option.
Crowdfund. Crowdfunding platforms are changing the face of capital, whether you grow the business of technology, filming, or sell jewelry. Kickstarter and other crowdfunding platforms allow people to invest a small portion of the money in return for future buy-in.
4. Distinguish yourself. Little things make a big difference.
Once you get a million dollars in revenue, your chances increase exponentially funding. Banks, for example, look at the tight funds from this perspective. Bank does not matter what kind of company you-they just look at profit / loss and make a decision. If you are a profitable company with a million personal income and a good credit score, there is a good chance that the bank will lend up to $ 200,000.
1. Pivot. Use the service to generate cash flow and fund product based business.
Starting a service-oriented business is easy: First, you provide a service, and then you raise funds. But based business products often require significant initial capital to get it up and running. If you are in this situation, consider selling services to generate cash flow and to build up funds for product-based business.
My current company, Outbox Systems, began in this way. We want to connect the two software applications, but we do not have the capital to build integration. Knowing we have to make money to fund the development of our products, I approached the channel partners in AtTask and asked if I could build software for their integration. Incidentally, the customer is required to integrate the company AtTask AtTask and Salesforce and are willing to pay us $ 125 per hour for building integration. Then we turn around and resell the product to others. A typical tech entrepreneurs think, "Collecting money, build the software." But we turned the model on its head and basically got a company to help us develop the intellectual property for our business.
2. Grind it. There is no substitute for sweat equity.
Sometimes you have to go into the trenches and make it happen. During the first two years of business at my previous company, Support Care PC, I knocked on the door, working the booth of my own, and my own close deals. I set up a table at a local college business school, hired five students to work only on commission, and knocked on the door of 7-8 hours per day looking for business. For those two years I did not receive a salary. But I believe in my service, and I believe we can succeed. I, as a billionaire entrepreneur Elon Musk said, "hell bent on making it work." The hard work finally paid off.
3. Get creative. Sources of funds everywhere.
Traditional entrepreneurial philosophy states that, to be successful, you have to stick with one thing and do not deviate from it. But desperate times call for desperate measures. If you are having trouble finding access to funds, there are some creative things you can do, as follows:
Using current resources in new ways. Like most young company, we are experiencing a crisis of cash flows on a PC Maintenance Support. We have about 50 employees, and we want to protect the work of everyone. We look at all the departments and all of our employees skills sets to see where we can generate revenue. Some employees in the technical support department stepped up and offered to develop software for other customers. Then some marketing department offered to develop a website. We added a website and software development services suite us and landed a contract with Nationwide Insurance, taking the company from negative cash flow to net income of 15% per month in three months. This gets investors interested in our company, and it allows us to have the money we need to return to our core services.
Get credit limit. It is not uncommon for most startup businesses rely on credit lines. The American Express Plum Card, for example, offers a 60-day period for payment rather than the usual 30-day period. Some banks or credit institutions offer loans that are designed to allow growth in the early stages of business. A word of caution: to keep from getting bogged down in debt when you are trying to expand the business, maintaining a minimum purchase.
Use Incubator. If you are sure you have a solid idea and a business plan that can be applied, you may want to consider a business incubator. Once received, the program is specifically designed to provide funds to help finance a startup company. Sometimes they offer office space or administrative services together. Most of the incubation program sponsored by the organization of local and regional economic development, and some are sponsored by colleges and universities.
Search Accelerator. It's like an incubator in that they are designed to provide funds. However, accelerator expect a quick response to investment. If you are prepared and ready to hit the market quickly, this is a great option.
Crowdfund. Crowdfunding platforms are changing the face of capital, whether you grow the business of technology, filming, or sell jewelry. Kickstarter and other crowdfunding platforms allow people to invest a small portion of the money in return for future buy-in.
4. Distinguish yourself. Little things make a big difference.
Once you get a million dollars in revenue, your chances increase exponentially funding. Banks, for example, look at the tight funds from this perspective. Bank does not matter what kind of company you-they just look at profit / loss and make a decision. If you are a profitable company with a million personal income and a good credit score, there is a good chance that the bank will lend up to $ 200,000.
If you have some income coming but need an extra push to get a million-dollar mark, be sure to consider every possible way that your company can differentiate itself. Do you have a letter of commitment from the famous investor? Do you have some income or contracts to get some income? Do you have valuable intellectual property with the potential to generate revenue? Differentiators like this can make the difference between getting funded and ignored by investors and lenders.
The only real way to start generating revenue for your business is to roll up your sleeves and get to work. Despite what others may tell you, there is no easy way to earn a profit. But if you are sure you have a product or service that people want, you can push your way to the top by turning, grinding out, more creative, and differentiate themselves.
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