8 Ways To Start A Business, Even When You're Low On Funding
A fresh new crop of future entrepreneurs with brilliant business ideas are currently graduating from college, but many won't pursue their ideas because they feel a lack of capital will create too many obstacles.
I'm here to tell you that you don't need major funding to start a business.
Sure, you hear about startups receiving millions of venture capital dollars almost daily, but a large percentage of them burn through their money, fail and fade into the sunset.
If you want to start a business but lack funding, don't let that discourage you. Of course, there are going to be insanely long days and you won't sleep much (if at all).
You will be stressed, often. But, if you want it badly enough, you can turn your business dream into reality.
Here are 8 tips to help you start a business with limited funds.
1. Create a business around what you are knowledgeable about.
Starting a business based on your expertise and knowledge reduces the amount of outside sources you will be dependent on.
When your business is built around your own personal expertise, you eliminate the need for consultants and outside assistance.
On a past episode of “The Profit,” there was an individual who spent millions of dollars building a car dealership.
He was $6.9 million in debt when he brought in Marcus Lemonis.
He didn't have experience running a dealership, so the fact they weren't selling any cars wasn't shocking.
2. Tell everyone — friends, family and social contacts — what you are doing.
Make sure you let your family, friends and social media contacts know about your new business.
They can be your biggest brand advocates in the beginning, helping to spread the word by introducing your business to their contacts.
Call and text everyone in your phone; send emails to your entire address book, and announce your new business on your social media profiles.
3. Roll up your sleeves and build sweat equity.
You have to be prepared to put in the work and wear many hats in the beginning.
When I first started my company, I worked nonstop, handling every aspect of the business.
You are building a brand; the long days and hard work are, essentially, increasing the value of your business.
The sweat equity you build will come into play if you ever decide to sell a piece of your company or take on a partner.
4. Utilize free marketing and advertising.
It's possible to generate buzz for your new business without spending a fortune.
Social media provides you with a platform to interact with your target market. You can also reach out to local media in your market and offer your expertise.
Make as many local media contacts as you can, and be extremely responsive with their requests.
This can lead to them to branding you as the local expert, generating consistent, free exposure for your business.
5. Make sure your business model generates fast revenue.
The quicker you can generate revenue, the better your odds of survival.
Starting a business with little to no money means you need to bring in enough revenue every month to cover your operating expenses.
You have to set small, achievable revenue goals, starting with covering your expenses.
If you can't cover your operating expenses each month and you don't have a pile of funding capital to dip into, you will quickly be so far in the red it will be nearly impossible to recover.
If your business is a service provider, you need to make sure your receivables policy won't sink you.
Can you remain above water with net-15 or net-30 terms?
Don't establish your receivables policy based on what you think your customers will want. Base it on what will make your business operate successfully.
6. Avoid credit card debt like the plague.
There is a smart way and a reckless way to use credit when starting a business.
New computers, phones, furniture for the office and supplies can quickly add up. Rather than purchasing everything at once and going into debt, spread your purchases out.
Use your company's revenue to pay for them. By eliminating the stress of debt, you greatly increase the chances of building a successful business.
7. Avoid pointless expenses.
Your business will have some expenses that can't be avoided, but what can be avoided is unnecessary overspending.
Take something as common as office computers: Do you need to spend $24,000 on a dozen 27-inch iMacs for your sales team, or would spending $3,600 on basic machines to get you up and running be a smarter move?
Being frugal in the beginning can be the difference between success and failure.
8. Be prepared to hustle hard.
When you start a new business with very little or no capital, you have to be prepared to dedicate everything you have to making the business successful.
As I said before, you will have to wear many hats, and the majority of your time and energy will be spent working.
If you want to be successful, you have to be willing to put in the work.
Don't let a lack of funding stop you from pursuing a great idea and turning it into a thriving business.
Will it be a journey filled with obstacles and stress? Yes, but that is part of entrepreneurship.
Embrace it and don't let anything, including limited capital, stop you from chasing your dreams.
Jonathan Long is the Founder & CEO of Market Domination Media, a digital marketing agency specializing in creative outside the box branding campaigns designed for aggressive online growth. Connect with him on Twitter.
Subscribe to Elite Daily's official newsletter, The Edge, for more stories you don't want to miss.