A lot of potential entrepreneurs have been asking us- we have a good business idea but little/no money to invest into it, what should we do. Let me assure you – nothing is impossible if you have the determination to do it. It shouldn’t be just a dream but a passion. What is required for Business success is combination of skills for your area of business, discipline in your work and marketing skills.
Sadly a lot of people leave their startup dreams just because they think that they don’t have a lot of money to back their business idea. But believe me, money is not the most important factor- neither absence nor abundance of it.
Here is what you need to focus on, to startup with no money :
Make your expertise your capital: When you are venturing with very less capital be sure that you are venturing into something you have knowledge and skills for. This will minimize your need to rely on outside sources like consultants, who will obviously need to be paid if consulted. If you have the required level of expertise in the domain you can cut down on this cost and use it where absolutely required.
Marketing Marketing and Marketing: Marketing is the mantra. Let the word spread..tell everyone you know, family, friends, ex- colleagues about your venture. Use all available networking/ social media platforms that obviously you can signup for free and let the world know about your venture. This is how you can market your business without incurring any cost and this is how you will get to meet people who directly or indirectly might be interested in your venture. Along with that these platform will help you expose your product to a much larger audience. This is just like your marketing and advertising department working on little/no money.
Cap your expenses: Whenever you are venturing into some business you will certainly have a number of expenses. If we classify these on the basis on absolute requirement, they are – Avoidable expenses and Unavoidable expenses. Also make sure that you are utilizing your existing assets judiciously. Unavoidable expenses is something that you don’t have a substitute for, Avoidable once are those you can do without or have a much cheaper substitute for. Lets start from the very basic things. If for start you can work from your home, there is no need to spend all your cash in hand on a fancy office. Remember Google started from a garage. Keep your focus and your money for the product you are about to launch, a grand office will follow suite.
Keep the Credit Card away, make purchases only when required: Personally, I feel, Credit Card is pure evil. Buying new computers, furniture, phone, office supplies using your credit card might look tempting but remember it will drag away your focus and your money from your goal. If it is absolutely necessary for you to buy – a) Buy in parts not everything at once, make a preference list of what is required first. Once you start making money you can use that to buy the second in preference b)For a start look up for things on reselling sites that will help you save money and get the same utility.
No Unnecessary staffing: Please do not hire unnecessarily, push your self to the limit and beyond only then look out for people. If you absolutely want more man power approach friends and family first, obviously after analyzing if they have the required skills for the piece of work you are offering them. They may be willing to work for you without a salary package. Yes, you can treat them regularly. Who knows one of them might actually become your partner if they really like it and are equally passionate about it. You will be cutting down on the pay part and still have your work done. A lot of startups hire a lot of people and then later lay them off, which is absolutely not recommended.
Sweat Equity – power to you: What does sweat equity mean – it is your contribution to a venture/ product in the form of effort and toil(read sweat). You work round the clock for your business idea and thus increase your ownership interest. Sweat equity is claimed to be the most preferred mode of building equity for cash-strapped entrepreneurs in their start-up ventures, since their contribution may be little financially. You are working towards making your idea a brand name, you are working tirelessly towards it, marketing it, giving your time to build it and make it work, which is simultaneously increasing the value of your product. This equity will be of significance when you decide to sell off a stake of your company or get a partner. There is no substitute to Hard-work. It is especially important when this is all you can give to your business. Work hard and give it your all. All this is possible only when you are passionate about your business venture. You will have to wear many hats, be the boss and the worker yourself.
Unofficial / official loan:If you have absolutely no money and can’t do without it for your venture, seek help from family and friends financially. The advantage of this is that you will have more flexibility terms for paying the loan back.
If you can’t take help from that front approach financial institutions for small business loan. You can also take help from Credit Guarantee Trust for Micro and Small Enterprises and gradually move towards other methods of funding