Starting a business sounds like a risky and difficult but feasible endeavour. Starting a business with very little or no money, on the other hand, sounds downright ludicrous. You may wonder if it’s even possible to build a business from scratch if you don’t have the necessary funds. Well, history teaches us that although it’s hard, it’s not impossible.
There’s no denying that money plays a key role in the success of any startup. In fact, it might be the most important factor of all, with 47% of startups citing insufficient funding as a reason for their business collapse while another 44% attributed failure to running out of cash. Without money, many of the activities and tasks of running a business, like purchasing equipment and hiring staff, may be out of reach and can lead to an early demise.
However, for those who are daring enough to take the entrepreneurship path, the absence of financial resources doesn’t represent an insurmountable obstacle. What they lack in funds they usually make up in creativity, energy, determination and perseverance.
So, let’s see how one can use these attributes to overcome financing shortages and make things happen even on a limited budget.
Set realistic expectations
Dreaming big is great when you plan to set up a business as it will give you the motivation and drive to keep going despite the challenges and obstacles, but you also need to be realistic about your possibilities. For example, fantasizing about opening a fine dining restaurant when you have zero money in your bank account is not exactly realistic.
Instead of chasing rainbows, you should keep your feet on the ground and make use of your practical sense. Since you’re not swimming in cash, it’s a good idea to maintain your day job until your financial situation becomes more stable and dedicate your spare time to starting your business. That way, you won’t be pressured to rush the process (and make mistakes along the way) or deal with financial hardship.
You also have to establish goals that are attainable, meaning you should come up with a business idea that is doable from a financial perspective. Not all businesses require large upfront investments; some don’t require any money at all. It will cost you nothing to build a business that’s based solely on the skills and resources you already possess.
Virtual assisting, tutoring, content creation, bookkeeping, social media management, and graphic design are just some examples of businesses you can start with zero funds, as long as you have the necessary abilities. Then, once your business starts producing money, you can think about making investments to grow your venture.
Research the market
A business idea can sound great in theory but there’s only one way to find out if it’s going to be just as great in practice: doing market research. Businesses don’t exist in a vacuum, so the success of your startup is going to be heavily influenced by the realities of the industry or sector you’re planning to enter. This is as true for construction and telecommunication businesses as it is for financial companies or any other types of ventures. A thorough market research is going to bring you up to speed with all the relevant information and help you accurately assess the viability of your business idea.
This usually implies gathering data about your target audience, your competitors, the strategies they employ to sell their products/services, industry trends, market dynamics and so on through interviews, questionnaires, surveys, focus groups and experiments. You can apply the insights to tweak your business plan or come up with a new plan altogether.
Explore financing options
You need to use the little money you have smartly to make it stretch as further as possible. For that, you need to learn how to create a budget by making an estimate of your expenses and deciding how much money you’re going to spend on each.
If you don’t have any money to start with, you’ll have to look into different financing options for startups. It might be difficult for you to get approved for a small business loan since you’re just starting out, but there are various possibilities to consider. You can obtain funds through crowdfunding, incubators, business grants or angel investors. Business credit cards can also help you cover the initial expenses of setting up a business and they’re easier to access than a loan.
Alternatively, you can turn to friends and family to get the money you need. If one of your family members is willing to support you financially, make sure you write all the terms of the loan in an agreement so there are no misunderstandings regarding repayment.
Take advantage of free resources
The best things in life are free is an adage that doesn’t stand true in the business realm, but even the harsh and competitive business space can sometimes provide things for free. In today’s day and age, there are all sorts of free and easily accessible business resources that all entrepreneurs can take advantage of, including mentorship programs and business development centres, so make sure to run a Google search and check them out.
Networking is also going to open a lot of doors for you. Sometimes knowing the right people can make your path to business success a lot smoother and solve some of your money-related woes by giving you valuable advice, providing solutions or even helping you financially.
But don’t forget that you are the most precious resource your business has. This means you’ll probably have to wear multiple hats and run your business as a one-man show until you can afford to hire employees, so get ready for some long work hours and sleepless nights.
Final thoughts
Becoming an entrepreneur is never an easy journey, as skilled and strong-minded as you might be. When money is short it can be even more difficult to turn your dreams into reality. But you can carve your path into the business world even if your budget is limited or non-existent as long as you put your creativity into practice and work hard towards achieving your goal.
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- Source: https://www.fintechnews.org/big-ideas-little-money-getting-a-business-off-the-ground-on-a-shoestring-budget/
