How To Start A Business When You’re Broke
HOW TO START A BUSINESS WHEN YOU’RE BROKE
Estimated Reading Time: 9 Minutes
Let’s start a business, grow it, do an IPO and become a billionaire!
Nice dream…….. but the insides of your pockets are plainer than the food your unemployed bachelor BFF cooked the other day.Starting your own business can be a great way of realizing your potential, becoming independent and generating an income that can sustain you and catapult you to new levels. Click To Tweet
Starting your own business can be a great way of realizing your potential, becoming independent and generating an income that can sustain you and catapult you to new levels. Unfortunately, some people just aren’t in the position to start a business anytime soon. Breaking into the business world can be intimidating, especially if you don’t have the money or experience to back up your dreams.
High levels of debt can be a huge obstacle. A report commissioned by nonprofit organization Demos, suggests that unstable financial situations cost more than we think. Mostly, they make people less inclined to take on risks like starting a business. Add more money to running or startup business expenses to a messed up financial situation each month, and we’re talking potential total financial collapse. On top of that, it might take several months or years before a business even turns some profit. We come up with amazing ideas, but our empty bank accounts paralyze us from moving forward with our goals.
For young people plagued with student loan debt, rising rent, wage stagnation, and massive unemployment, the prospect of starting a business, much like buying a car, maintaining a savings account or eating a meal that’s not some variation on instant noodles, can feel like an impossible feat to overcome. All this financial stress may explain why millennials, who, despite having a reputation for being entrepreneurial, are less likely to be self-employed than their counterparts in previous generations. According to a Wall Street Journal analysis of Federal Reserve data, just 3.6 percent of adults under 30 reported owning their own business in 2013, compared with 10.6 percent in 1989 almost two decades earlier.
Also, we see all these young entrepreneurs launching their startups and seemingly becoming millionaires online. Media is constantly bombarding us with success-stories of those entrepreneurs. It’s super discouraging when all these super cool people are starting their Vlogs and businesses, and you’re feeling left behind because… you’re dead broke.
However, most young people have very little capital to put to work in building their business. So how do you scale your idea anyway?It’s not easy, but with a creative approach, it’s possible! Click To Tweet
It’s not easy, but with a creative approach, it’s possible!
The honest truth is that, yeah, you do need money to grow a business, but that doesn’t mean the lack of finances should hold you back from starting. If you’re just as halfway as ambitious as you are broke, here are some tips for you.
Why more people need to start businesses
By the year 2020 40% of the labor force will be made up of freelancers according to a study by software company Intuit. Many reasons contribute to that, but mainly it is because the regular 9 to 5 is quickly becoming the nemesis of many salaried employees. Nowadays, you can easily find people who want to quit their jobs to live the glamorous entrepreneurial lifestyle at every corner.
One of the reasons is that the job market is already very tight and overcrowded and would only become even tighter in the next few years. Fourth Industrial Revolution technologies already changing many occupations and will destroy plenty of jobs.
We need many new startups to create loads of new employment.We need many new startups to create loads of new employment. Click To Tweet
Tips on how to get started and things to keep in mind
Quit worrying about being original
One thing that is holding many people back is the belief that they must have an original business idea.
A proven way to success is copying the idea of someone else.A proven way to success is copying the idea of someone else. Click To Tweet
And there’s nothing wrong with that! Because the truth is that most good ideas are already being worked on. Go ahead and copy something, but make sure that it aligns with what your interests are, and what you’re already doing. And when you copy it, copy it quickly and aggressively.
Don’t steal intellectual property while you’re at it; however, just copy for the sake of inspiration and try to make it better. Put your own twist on it. Improve it and make it your own.
At the end of the day it’s more about finding inspiration in what others are doing that is successful, or could be successful, and then put your own stamp on it.
Don’t focus on just one thing
This may sound counterintuitive because most people always tell you that you should be focusing on only one thing, but the reality is that if that one thing fails, and the likelihood is that it will, and you have nothing else to back you up, you will be in a world of trouble. So, avoid the single point of failure and instead see how you can have parallel things that complement each other. have several multiple projects that insulate you from the possibility of failure.
Figure out all the things you could do without money
There so many resources online, literally the entire universe of information is laying at your feet. Spending a few hours online instead of social media, you can research dozens of tried and tested business formulas that you can start with very little capital or even no money at all. All you need is a laptop or smartphone.
Get a Coach
A coach will help you see things from different perspectives and experience. A coach with years of business experience will help you tap into that experience without needing years of experience yourself.
However, coaches can be expensive. If you can’t afford one, then do your best to be a self-starter and write all things down where you lack skills or experience and that you need to figure out. This is the best way anyway because by the time you can hire a coach or consultant, and trust me you will need to eventually, you are already prepared and have an idea that they can help you with developing even further.
Market test with your friends
One of the best ways to check if your ideas are solid as well as to finance your initial product offering, especially if you’re short on cash, is to offer freebie products. Start with, friends, colleagues, family, and acquaintances who will pay for your brainchild.
Furthermore, it is a valuable way of collecting feedback on your idea. If they think your product isn’t any good, they will most likely candidly tell you what exactly is wrong with your product.
If you find it difficult to sell your product to your friends, family, colleagues or acquaintances, it is a great learning opportunity because it could mean that you must practice and develop your elevator pitch.
Often, when people who started a new business tell me that it is hard for them to find buyers, we quickly come to find out that they simply haven’t figured out how to talk about their idea.
Look at others
A good way how to build confidence about your endeavor is to look at other people who have started under similar conditions and have made it. For example, multimillionaire consultant Sam Ovens made $10 million by the time he turned 26, and he came from absolutely nowhere with limited business experience.
Such stories show that anyone could ascend to the higher echelons of the business world.Such stories show that anyone could ascend to the higher echelons of the business world. Click To Tweet
Think about a low-cost business
If you really have no money whatsoever to spend on your business idea, you could start with another business instead.
First, you could pick a business that you can do from home or from an Internet café, remotely, quickly anywhere, on your laptop or even your smartphone. You could think about business ideas that you don’t need capital for such as reselling, drop shipping, or writing, being a virtual assistant, tutoring, childcare, babysitting, administration, or even coaching.
Do market research
As already touched upon when we were talking about starting with your friends and family, you will have to do market research.
Many businesses fail because they have not done enough research about the competition. Knowing simply what the competition knows is not enough. You must dive in very deep to figure out what is going on, what people think and what people need. You must become an expert in your niche and scour Google for keywords and related keywords and read every single website that pertains to your industry.
Don’t get discouraged if you see that the market is already full of players.Don't get discouraged if you see that the market is already full of players. Click To Tweet
In fact, if there are many players, it means that there is money to be made. You can use that to your advantage because if you can do it better than them, or can put a unique twist on it, it will be so much easier to find clients.
You have to be fully aware of yourself
You might be thinking that money is the most important thing to get you started with your business idea. What is more important is that you need to have self-understanding.
If you don’t understand yourself, you won’t be aware of your strengths or weaknesses or how to utilize your passions, what prevents you from being productive or simply how you come across when you meet new people. Then it doesn’t really matter how much money you have, because most likely you won’t be able to utilize it wisely.
You will have to take some time to reflect on your goals and how you view yourself as you are actively pursuing them.
Willpower is hugely important. You need to have the willpower to achieve your goals. There are many people with great ideas but most quit way before they realize them because they don’t have the will to persevere. The mind is a very powerful thing. If you believe that you won’t be able to achieve your goals, then you simply won’t be.
You need to be aware of your skill-sets. Your idea might be great but if you don’t possess the skill-sets or experience that can help you realize it, it might never come to fruition. In such cases, it often helps to build the skill-sets first or to develop them as you are going on.
What are you passionate about?
One of the most important things to know about yourself is what you’re passionate about.
People usually succeed when they are pursuing goals that deeply matter to them and that they are somehow connected to on an emotional level.
People will do more to realize their goals because usually having a passion for something leads to people accumulating skill-sets and expertise in that specific field or related fields that they can utilize to realize their goals.
Build a network, but do the work yourself
If you don’t have any cash resources, it’s going to be difficult to employ your first team members. The best thing to do is to build a network of people who are professionals in fields that you might require or related fields and that might be able to connect you to others.
You must do the work yourself. You have to work long hours, work late at night, you have to work weekends because most likely you still have a job and your rent to pay. But if you have a good network, you can ask people for favors or information. But you need to be good at your people skills, and your idea has to be great.
You would be surprised at how many people will help you — realizing your idea for free or very little.
What is your audience like?
Who’s your audience?
Is it college students or single fathers, or teachers or shop owners?
You must be aware of who your audience is because you have to learn everything there is about them and you have to speak to them in their own language. You have to communicate to your audience the way they understand things; otherwise, you will talk past them, and your product won’t sell.
A Tip for business starters is to serve the audience that you are representing, the audience that you know most about.
Build what you know for who you know!Build what you know for who you know! Click To Tweet
Be online savvy and learn about branding
You have to learn how to build an online brand! It Is simply not enough anymore to put a website up and hope that people will stumble upon it and contact you for your services.
Since we agreed that copying might be the best option, one way of differentiating yourself from your competition is by branding yourself uniquely. You should learn how to create unique content, and how to use keywords as well as how to use SEO techniques to market that content and to attract traffic to your website and your products.
Start really small
Often the ideas that we have are ideas at later stages in the business and we have to build other stages and reach them first before we can get to the stage that we want to go. So, it makes sense to start small somewhere else and then work your way up and growing the business to your final idea.
Let’s say for example you want to have a restaurant, but you have no money to actually rent a place, hire staff and furnish a place. Instead, you could be thinking about starting a food truck. A food truck is not a full-fledged restaurant, needs less money to start up, and it’s easier to begin and quicker. However, you still need capital even though less to start a food truck business.
So, you can start even smaller than that!
How about cooking from home and delivering to offices?
What? No money for that either? Well, then how about a gourmet food blog on Instagram? That is easy to start, and you can build the authority to market as well as make some money and move on to the office delivery service.
And there is a bonus with that! You have to learn digital marketing, and you can use that at the later stages in your business.
There are tons of freelance jobs that don’t require to be in the procession of expensive equipment and can be started quickly.
Online writing comes to mind as well as virtual assistance. But there are plenty of other freelance gigs that many companies offer. It helps to have a good network so that the word-of-mouth on those gigs travels to you.
Utilize the sharing economy
Similar to freelancing, using the sharing economy can generate enough startup capital to move you to the next level.
The big difference to freelancing is that the marketplace does all the work for you when it comes to marketing and in many cases, there’s no real barrier to entry apart from your willpower.
Also, it can help you to create many connections and build your network that can benefit you in the later stages of your business idea
Learn from someone who’s been there
One of the smartest and proven ways of how to become a startup entrepreneur is not to start your business immediately, but instead to apprentice yourself to someone who operates in the industry that you want to operate in.
For example, you could apprentice yourself to a famous business coach or experienced HR leader as an assistant and learn the ropes of the business from her.
You could become the second shooter or assistant to a well-established photographer and learn all the tricks of how to operate a camera from him.
You won’t only learn the trade, but you will learn how to run a business as well because you have the chance to observe these people in their day-to-day lives as entrepreneurs.
Furthermore, you can use the chance to build your network and further your knowledge while you are working on your empire.
Make sure you ask
Many new entrepreneurs think they have to do everything alone and that there is no help out there. Well, to be honest, that’s kind of what I said above. But I was talking about employees that you won’t have money for.
I rather mean that you should be asking for help. Often entrepreneurs don’t ask for help or don’t know who to ask for help.
Forging partnerships with other businesses can help you immensely to cut your costs and establish yourself as a business if you learn how to pitch very well and if you have value to add. Other businesses are often inclined to figure out how a potential partnership could work, but it begins with you since you will have to reach out and be willing to ask for what you want.
Trial your product
This is going hand in hand with knowing your audience and selling to your friends and family. You need to figure out if your product is actually what the market needs.
Knowing how your product is received can push you to the next level and can mitigate any risks that might come up.
You can start very small by giving out freebies or discounted prices to a few people and see how they use the product and collect feedback on the product.
Which brings us to the next point.
Any type of business, but especially a completely new business, has to get opinions on their products or services, from people who know the market or are daily users and know the challenges involved with the product.
Your idea might look great on paper or is amazing in your head but might not be valid once it hits the ground.Your idea might look great on paper or is amazing in your head but might not be valid once it hits the ground. Click To Tweet
Trial it out. Give it out to your network. Ask your network for feedback and incorporate feedback into product development.
Don’t wait, and improve as you go
The most important thing that you need to do to get started: don’t waste any more time!
Many People don’t get started because They will try to get everything perfect before they get started and try to create the perfect situation, the perfect time for them to launch the business.
But the reality is there is no perfect time, no perfect situation, especially if you don’t have any capital and if you’re all alone.
You might not ever have the perfect chance or the best time to start.
That’s why you have to start now and figure things out as you go along and iteratively improve them step-by-step from stage to stage.Waiting any longer might make you wait forever. Click To Tweet
Nathan Latka, author of the book; ‘How to be a Capitalist Without any Capital’ is a very good resource on this topic and has some great ideas on how to realize your business idea without any financial backing.
If you want to start a business, but you have no money at all, don’t put your dreams on hold. The only way how to build a business is to build a strong foundation. When you don’t have money, it simply means you have to do the hard work, and you have to start now.
There are countless people who started exactly where you are now and became successful. Of course, they always worried about their financial situation, but they made sure they pushed on and developed skills as well as utilized any opportunity that came their way.
Do you want to start your own business? Are you struggling financially? You don’t know where to start and how to get to the next level?
Start by doing a lot of online research. This website is a good start and can lead you to further resources that could help you in achieving your goals. Talk to a coach or get a mentor. Make sure your friends and family know about your goals maybe even support you.
One thing you already have, which we can see by you reading this article, is that you have the passion for change and the passion for innovation.
You may feel too poor to start on your dreams today, but it doesn’t mean you have to give up on them completely or lose hope. If you put your mind to it and make sure you work hard and don’t give up, then you can make it!
An Industry 4.0 enthusiast, social entrepreneur and a changemaker by nature. He wants to see people and businesses prosper and reach their full potential.