Are you looking to start a business but have little to no cash? Are you wondering how other founders have built million and billion dollar companies from nothing?
You are in good hands in this article you will see how some of the biggest brands have managed to start and build mega corporations with no funding or little funding upfront.
I will cover all of these items in this article:
-Overview of Starting a Business With No Cash
-Case Studies
-Data Insights
Overview of Starting a Business With No Cash
Starting a business with no money is not new. Today, more and more businesses are starting and building high power companies and have a history of bootstrapping or starting with little to no money.
Usually, there is a person, the entrepreneur, or a group of people who have an idea and desire to bring it into reality.
Ideas that are new or ideas that already exist but have their personal spin on it. Ideas are the easy part the execution is hard and difficult.
Most entrepreneurs fail for a lot of reasons and one of the biggest ways they fail or dont even get started is money or start up capital.
Traditionally, entrepreneurs make pitch decks or any resource for the purpose of pitching to investors so money so they can get started on their operations.
This method can take a long time and is not for everyone. For decades, entrepreneurs have by-passed the traditional way of raising money from investors starting with nothing and then obtaining the money they needed to start.
Check out all of these resources related to starting a business with no money.
There are a many general ways to start businesses with no money i will share a few of them.
Consulting
Consulting allows you to share information and other things to help clients make informed decisions. One of my favorite entrepreneurs start his company when he was a teenager but didn’t have capital to start so he began consulting to raise money for future business ventures.
When you consult and are just beginning many people dont know you so you will have to be aggressive with finding your first client.
The easiest way to do this is to join marketplaces that connect you, the person consulting, to others who are in need of your consulting services.
A widely used tactic is making your services the lowest price so people will flock to you.
This allows you to get customers and bring in cash quicker verses if you charge the same prices that other well established consulting brands charge.
This can put you at a disadvantage if you have no customers and expect clients to choose you over another consultant if the price is the same and they have more reviews and experience.
By lowering your price this increases your chance of getting clients faster with all the competition on on these marketplaces.
Additionally, dont just use one consulting marketplace use multiple ones because you may find one marketplace gets you more customers then all of the other combine.
Aim for 10 or more but organize yourself so you’re not confused when using these marketplaces. Lastly, take the time to learn the dynamics of the marketplace your using.
You may through learning the platform find hacks to help you conquer the space your in. The most important thing is that after you register for these consulting marketplaces that you play offense and not defense.
Play offense not just here but in the entire process of raising capital for your business.
To play offense means your not passive but are actively marketing and searching for clients. Defense is just signing up and waiting for your email notifications from the marketplace letting you know some is interested in your consulting offering.
Student Refund Checks or Tax Refunds
This is a high-risk technique and i dont recommend this tactic for all entrepreneurs. I’ve been to college and graduate school and both times i received a refund check in for several thousands of dollars.
This is a huge boost for those who channel this amount of money into a business venture. When i was school i never really though about it this way but as i got older i started to see people can utilize this strategy to start their business.
This money is borrowed money so you will still have to pay it back plus interest. It might even be a person;s only option.
It is sad but i have known other people with the desire to start a business and they think that cant unless they have a certain amount of cash to begin with like lets say $1000.
It may be true in some cases but it is all about tactics. Saving money from your own job will work but takes a long time and some people cant save for what they dont have or they dont make enough to save for a business.
If you have already finished school but still have enough FAFSA to allow you to get a refund by going back to school it is worth doing it to get the refund as your startup capital.
You dont have to actually take classes just make sure you read the school’s guidelines on withdrawing and the consequences and penalties before making a decision.
I’m not telling you to do this because you must decide for yourself if this is worth the risk.
Lastly, if you do decide to do this and withdraw at the school you went to after getting your refund check make sure to place the money in a business account and not a personal account because if your not careful you will start spending it.
A friend of mine during my college years received a $9000 refund check from school and blew all the money. Dont let this happen to you.
The same concept applies for a tax refund as well. People can get a chunk of cash that can be used to make big moves in business.
Digital Products
A digital product is anything sold to others in a digital form. Examples are ebooks, online courses and audio books. It makes me laugh when people say there is no opportunity all you have to do is look around you.
This is hard to execute but worth it if you can pull it off. Plus nothing good ever comes easy so no excuses and move forward with whatever you think will benefit you.
My crash course version of raising capital or starting a business with no money selling digital products involves these stages. Even if you dont know what to sell still pick a niche and start.
You can decide later what to sell. This is often the best thing to do anyways since you need a audience first to validate your digital offerings.
- Pick a Niche you want to be in (Ideally a Profitable One)
- Create a social media account aim for a business account
- Design your profile and space
- Market, Market, Market; Promote, Promote , Promote
- Ensure your audience is growing daily and weekly use metrics like followers to measure progress
- Survey them using tools from survey monkey to see what problems you can help them solve
- Use a landing page to make a offer based on the data you collected from survey then promote offer to your audience
If you dont fill like making the product yourself then you can find affiliate products which is basically other peoples products you sell to your audience and you get a commission from the sell.
Some people are so good at this they have a day job and make money with digital products. This will take time to master so it is better to start sooner then later.
Case Studies: Companies Who Have Bootstrapped Successfully
Before Facebook started, Mark Zuckerburg had made facemash, a earlier experiment from his creative skills in coding. Later, facebook came in 2004.
Facebook grew through word of mouth physically and digitally .
The point here is that most people dont have funding dollars so when starting a business to market it consider posting and creating content around the products and services to your ideal customer on the platform they hang most.
Apple Corporation
Both founders Steve Job & Wozniak started out to raise capital by selling personal items. Jobs sold his Volkswagon and Wozniak sold his HP calculator.
When they receive an order for 50 computers they didnt have the cash to produce products. Jobs secured a credit line to get started.
The point here is to use anything you can to sell or raise money to start. Dont be afraid to start just begin with a plan and brainstorm solutions for challenges that arrive.
Data
Source shows the data on bootstrapping so basically building a company from the ground up with nothing but personal savings and the cash coming in from the first sales.
Another way to look at it is an entrepreneur with little or no outside cash or other support launches.
Source: Neil Patel
The data is as following:
$185.5B (Personal Savings)
$60B (Friends Family)
$22B (Venture Capital)
$20B (Angel Investors)
$14B (Banks)
$5.1B (Crowdfunding)
Many companies have bootstrapped and you dont always have to raise money from investors to get started. Many successful companies have used these bootstrapped method to grow.
Take a step back to learn the avenues of raising capital without having to use investors.
Other Data, from fact finder, includes that 83.1% of US business owners started their companies. “In the true entrepreneurial spirit, 83.1% of owners built their companies from scratch” by Smallbizgenius.net.
Starting a business can help you retire early. There is a whole movement on this called FIRE (Financial Independence Retire Early). Read this article here: “What is the FIRE Movement”
Also, check out these articles.
How Regular People are becoming Millionaires
Conclusion:
In total, the point is to use your brain and hustle to allow yourself to raise the money and get the resources needed to begin your company.
Just because you dont have the cash to start doesn’t limit you it is meant for you to think creatively to make the money.
Other ways to raise money that was not mentioned in this article is but not limited to leveraging student college refund checks, consulting, and Private Placement Memorandums (PPM).
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What are your thoughts?