Do you want to start a business but you lack capital and ideas? If YES, here is an in-depth guide on how to start a business with no money and no credit.
9 Best Ways to Start a Business with No Money and No Credit
1. Re-orient your mindset
The first step to starting a business without money is to re-orient your mindset on the possibility of the feat. Most people don’t believe that it is possible to start a business without money. They believe that it takes millions of dollars to startup a business, but the creative, innovative and determined entrepreneur knows that it is possible to pursue your dreams and ideas even if you have no money.
“There are three keys to starting a business. One is the idea, two is the people and three is the money. But rarely do these three keys come together in the beginning. However, it is your duty as an entrepreneur to find one of these keys and start the journey. You will find the rest along the way, though it might take years for these three keys to come in place.” – Robert Kiyosaki
What the quote above is saying in essence is that it is possible to start a business even if all you have is an idea. However, you must accept and believe the fact that it is possible to start a business without money if you are to succeed on this mission.
Now that you have understood the fact that there are three keys to starting a business, the question now is: Which part of the puzzle do you have? Do you have the money, the idea or the people? If you have any one of these, then it is a strength; a good ground to start.
You might think the question asked above is unrealistic or impractical but I tell you, it is. I have met people with money that don’t even know what to do with the money. These set of individuals are the ones that ask questions like:
- “I have $5,000; what business do you recommend I start?
- ”Where do I invest my money?
On the other side of the table are individuals with brilliant business ideas but with no money to finance their ideas. Now regardless the side you are on, the good news is that you have one of the keys; so you can start with that. You will find the rest along the way.
The next step to starting a business without money is to develop a good business idea. Your proposed business idea must satisfy a need or solve a problem. Your idea must be good enough to arouse the interest of anyone who hears a pitch of it and above all, it must have strong profit potentials.
Since this article is about how to start a business with no money, then I assume you are that person with the idea but no money. If you are yet to find an idea or opportunity that is worth pursuing, then you need to find one because that is going to be your leverage or starting point since you don’t have money.
Now if you already have an idea of what you want to achieve, then you need to write a business plan. A business plan is a written document containing your goals, your business idea and its profit potential. It is a document that tells an investor that you have spent time working on your idea and you are ready to move to the next phase. If you have an idea but you have no money and no business plan, then you have probably not made up your mind to become an entrepreneur.
Okay, I know you are reading this now because you lack the capital to finance your business idea but I will bet that you have something of value inside of you. What business skills do you bring to the table since you don’t have money?
Okay, maybe you are incompetent when it comes to running a business because this happens to be your first business. What technical skills do you have, as related to the business you have at hand? This are questions most investors will want an answer to.
Most people dream of someday owning a business and becoming rich. They start a business with the hope of becoming rich overnight. Now while I am not against thinking big and setting big goals, it is important you know that big goals are fragments of small goals put together. So you must be prepared to start small and work for free especially when you are starting out with no money.
However, the funniest part of this is that most people cringe at the thought of working for free. Most people can’t see themselves working for long without earning an income or getting a steady paycheck but the truth must be told.
If you are really going to start a business and succeed, regardless of whether you are starting with money or not; you must be willing to work for free at least for a year or two. This is probably one of the reasons why most people are afraid to start a business; the fear of working without earning an income.
Now from my personal experience, I know that working for free is a natural phenomenon especially when in the startup phase of building a business. The reason is because getting a business off the ground takes a lot of work, resources and capital. When I started my first business, I worked for three straight years without paying myself. Am I alone in this? My answer is no.
Virtually every successful entrepreneur I know started from scratch and worked for free to get their businesses off the ground. Richard Branson worked for free to get his “Student” magazine and “Virgin Music” business off the ground. Henry Ford worked for free on his automobile company until he was able to get the attention of investors.
Larry Page, Sergey Brin, Mark Zuckerberg, Michael Dell all worked on their businesses for free, from their dormitory of their various institutions before they attracted investors and rose to fame. One key trait investors want to see in every startup entrepreneur is commitment and sacrifice. If you can’t envision yourself working for free, then forget about starting a business.
After getting yourself in the right mindset and writing your business, the next step is to start. Now most people can’t imagine starting a business without money and they often ask:
- How do I rent an office space or store when I don’t have money?
- How do I manufacture my products when I have no money?
Well, the answer is that you can’t do any of these things without money but you can definitely do something.
Most people still believe in the conventional way of starting a business, which is renting an office space, stocking your goods, employing staff and finding customers. However, a creative entrepreneur can take a different approach especially when there is no startup capital.
Rather than sit on your idea, you can work on designing and developing a prototype of your product, attending seminars and entrepreneurial summits, writing and submitting proposals to investors and companies, looking for a partner, doing business plan presentations and talking to investors, borrowing money from family and friends. The most important thing is to keep moving and avoid being idle. Never sit on your ideas.
For instance, when I decided to become an entrepreneur, I had no idea, no money, no business skill and no friends of like minds. All I had was a vision of where I want to be in the future.
Rather than sit idle and dream about the future, I started attending seminars, talking with other entrepreneurs, reading books and learning about business models. It was during this process that I developed a business idea, wrote my business plan and started my business. I advice you take the same approach especially if you are starting out with no money.
You can also start a service based business since it requires little or no startup capital. But you will definitely have to invest time and sweat equity to get things going. A little bit of creativity, marketing and sales skills will also be needed to give your business a head start.
When I hear people giving lame excuses about their inability to start a business due to lack of capital, I boil inside of me. I have seen people start businesses right from their home and grow from there. Julie Aigner Clark, Bill Gates, Larry Page all started from either their home or dormitory.
I have seen people borrow $50 or less from family or friends and launch themselves into tremendous wealth through network marketing. I have seen young internet enthusiasts start a business from a friend’s computer or a public connection (cyber cafe). So I don’t think you have any excuse for not starting a business; even if you have no money.
Lastly, you can bootstrap your startup by operating on a lean budget. Bootstrap financing is an alternative for those who are finding it difficult to raise funds for their business.
Bootstrapping financing is simply the art of running a business on internally generated funds which are often limited. It involves the tactical deployment of resources while giving little room for waste. Effectiveness and efficiency are two watchwords in the game of bootstrapping.
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