A huge capital isn’t always necessary when starting a small business. Sometimes a business can start without prior funding. Having all the capital you need is good, but that won’t be the case for many people.
Some will want to know how to start a business with no money. The good news is that when you’re starting out, you’re not obliged to start out big at once as you can go as small as you like. However, it’s still business and you need funds to get it off the ground. The point of this article is that you don’t have to immediately possess the capital to start a business, you just need to know where to get the money or how to raise the capital to make things happen.
Whether you’re planning to start a laundromat business, food business or a t-shirt business with no money, there are many ways to get the funds needed to get started. For example, you can always begin by selling your products to your friends and relatives. Let them spread the word about your products, and once the money starts rolling, you can scale your business then.
Take it a step further by selling them online. You can use a third-party website like Amazon or you can host your own website.
There are many ways you can start your business with little to no funding. You just have to know what the opportunities are and how to utilize them.
- Valuable Tips on How to Start a Business with No Money
- What Businesses Can You Start with No Funds?
- Starting a Business: When Can I Start Working on My Taxes?
- Working a Full-Time Hove and Running a Licensed Business
- Do Your Research and Take Action
Valuable Tips on How to Start a Business with No Money
Create a business plan
Your business plan is the blueprint for your business. Not only will it help you stay on track but it will also help give you an idea of how much money you need.
A business plan should include your goals, strategies, and how you plan to achieve them.
A well-made business plan will help you have a clear vision for your business, identify potential threats and opportunities, and map out steps towards your achieving your goals.
There are lots of business plan templates out there but these are some key components that should always be included in yours:
An overview of your business plan. Include your business concept, business objectives and financial projections in this section.
Company description. This section should have the full description of your business, its history, the product or service you’re offering, your target market and your competitive advantage.
Market analysis. You should have a page summarizing your market research and analysis.
Marketing strategy. A marketing plan indicates how you plan to promote and generate demand for your products and services.
Operational Budget and Plan. A detailed description of how the business will operate. This includes inventory, manufacturing process, delivery and facilities needed.
Financial projections. A forecast of your expected revenues and expenses.
You can use a business plan as a tool to close deals with investors, lenders and stakeholders. With a business plan, you’re giving yourself a higher chance for success.
Determine how much money you need
It’s clear that you know the problem: funding your business. Now, it’s time to come up with a list of opportunities that are quite obvious to you. Stop and think about what you can do at this moment and don’t let the thought of starting a business without money intimidate you.
List down the things you need. What’s essential to your startup right now? Do you need funds for production? Do you need to find a supplier for your product? Do you need your own website? Do you need business insurance?
Note that you can find a way to get the things you need for free. For example, you can save costs on bookkeeping in your first year if you can do it yourself or ask a family member to do it for you.
Another thing that you can save on is marketing. Marketing your business is very important so it’s crucial to have the budget for it. However, you can save on the cost by focusing on one strategy at the beginning.
For starters, you can choose from social media marketing, SEO or affiliate marketing.
It’s important to determine how much you need for your business and what expenses cut at the beginning. This will be different for every business owner.
Once you’ve set a number, it’s time to find a way to get it.
Determine your funding opportunities
Now that you have a business plan and you know how much you need to run your business, it’s time to find out how you’ll get the funds for it.
There are three popular ways to fund your business:
Self-funding or bootstrapping is the best way to fund your business without taking on unnecessary debt.
Bootstrap yourself by using the money you’ve already got, like retirement funds or savings. This gives you complete control of how much goes into making investments for-profit.
Bootstrapping your business also looks good on paper as it shows potential investors how serious you are. It lets other people know that they can trust what you’re doing.
Note that a self-funded company doesn’t rely solely on external sources such as investors who may demand a huge amount of equity. But, be careful not to spend too much or more than what you can afford.
Investors can give you the funds to start your business but there are different kinds of investors. There are angel investors or venture capital firms who will invest in your business in exchange for a portion of your company. Aside from ownership, they will also have a say or control over your business decisions.
Investors can also come in the form of crowdfunding where a large number of people, called crowdfunders, raise money for the business. Unlike angel investors, they don’t receive shares of your company and they don’t expect any form of financial return.
Crowdfunders expect a token of appreciation from your or a gift. This all depends on what you have set in place. It can be giving them each a sample of a product you want to sell, holding a meet and greet, or adding a particular product to your offering.
This is a low-risk investment method for business owners because aside from getting full control of the company, they don’t have any obligation to repay the investors.
You can also ask friends and family to invest in your business idea.
Note that you’re not asking for charity. You are going to pitch them your dream and your solid business plan.
If you need more capital and need a little push, then consider applying for a loan. Different types of lenders offer varying levels of loans to customers in need. Some may be willing to give better terms than others depending on what you can afford or prefer.
To increase your chances of getting a loan, you should solidify your business plan and have an expense sheet prepared. It will also help if you can provide a financial projection for the next 3 or 5 years.
Set up your website
Websites are important today and one of the absolute essentials that every company must-have. It allows you to connect with your customers and potential investors. It also enables you to be seen and be competitive no matter what size of business you are in.
A website is your online business card, but better. Your website houses everything people and investors need to know about your business. It makes it easier for people to connect with you and have a clear idea of what your brand is all about.
Thanks to today’s drag-and-drop website builders, you don’t even need to learn to code to create a website. For a startup, this is a good thing.
But if you want to be competitive in the long run, you have to invest in a proper website builder once profit starts rolling in. You can take up online courses on how to build a proper website or hire professionals to build and optimize your site. This is crucial because there are technical aspects in website building that needs to be addressed if you want to compete with the big boys in the industry.
Here are the basic pages your website should have:
The homepage is your first impression to visitors. It needs to be eye-catching, informative and engaging without being too salesy or overbearing.
This is the page where your visitors will form an opinion of what they’re looking at before even getting into the other pages of your website. This should contain the highlights of your whole website.
Your homepage should be able to show and tell your visitors what makes you different from your competitors.
Keep your homepage simple. Your website as a whole should have a cohesive theme that appeals to the emotions of your target audience.
The about page is where people would go to learn more about your business. It should contain information about the founder, what the business’ mission is, and what makes your business different from others.
This is a page that makes it easy for people to get in touch with you.
The FAQ section should contain all the answers to frequently asked questions about your business.
A blog page is important because it will house fresh content that will attract and engage your target audience.
Services Page (If you offer services)
The services page should focus mainly on the services you’re offering and should offer complete information about them. If you offer a number of services, then each service should have a page of its own. Make sure to create the main service page that can act as a directory for all your other service pages.
Product Page (If you offer products)
The product page should have a list of all the products that you offer. If you have numerous products, then make sure to organize the pages and have the main page where people can quickly find what they’re looking for.
Always include a search bar on your website so that users can access pages easily.
What Businesses Can You Start with No Funds?
Here are some businesses that you can start without having to shell out a lot of money:
- Online lessons
- Selling arts and crafts
- Selling ebooks
- Web Design
- Social media services
- Digital marketing services
Starting a Business: When Can I Start Working on My Taxes?
You should start working on your taxes at the date of incorporation as that’s when the IRS sees your business as a running business. This can be important for getting tax deductions too.
Working a Full-Time Hove and Running a Licensed Business
It’s not uncommon for a person to have a full-time job and run a business on the side at the same time. However, there are some things that you need to consider.
- Think about how you utilize your time. Having a side business running a marketing company offering social media services is different from a business selling shoes. This is why having a website and doing business online is easier. Decide how you’re going to manage your time and your business when you’re not working full-time.
- Mind your taxes. Make sure that you have an employer identification for your business You’re going to have two sources of income so dealing with this will be a bit different once your business is up and running.
Do Your Research and Take Action
The first step is always the hardest. Starting a business and getting the funding you need won’t be a walk in the park. However, it’s important to keep going no matter what setback or challenge you encounter.
Don’t overthink everything, but at the same time, always have a solid plan as you go through this journey. Do your research, analyze your competitors, and study the market. Do everything you can to gain useful insight into your product, competitors and consumer preferences.
In-depth research will help you fully identify what sets your business apart from competitors. This will be crucial when you work on your branding and marketing strategy.
There’s going to be a lot of work, but nobody said that having a successful business is easy, so expect it to be hard and enjoy the ride.