Editor’s note: This article was first published in July 2018. The note that it was “updated in 2018” and the advice on Facebook advertising reaching “millions of people” reflect the situation in 2018.
If you’ve ever wondered how you can start a business when you have no money, you should know that a lack of money shouldn’t be an excuse. We’ve often seen entrepreneurs with plenty of money to start their business make worse decisions than others who, because they lacked capital, had to use their creativity. We updated this article in 2018 to include a video on how to start a business for less than 1,000 euros.
I want to start my own business, but I have no money. What do I do?
It’s true that money makes it easier to set up a business, but it’s even truer that when we have just enough to get started, we avoid many of the usual mistakes and lay very solid foundations for the company.
For example, an entrepreneur with plenty of money at the start might rent an office and hire a secretary even before having the sales and profits to cover that cost.
When creativity comes into play because resources are scarce, at first we’ll probably have to be both the salesperson and the receptionist, and we’ll add whatever we need only once we can clearly see we can afford that investment.
It goes without saying that not every business can be started without money, although some businesses really can be launched with practically no investment.
First of all, we need to be very clear about some of the concepts Tim Ferriss talked about when it comes to making a business profitable quickly. We need to be clear on whether we’re going to create demand or satisfy demand, and whether our idea is to compete only on price in a saturated market or whether our product will be very exclusive.
Will our product be aimed at everyone, or only at one sector? Answering all these questions in advance will give us the route to follow.
People usually advise drawing up a business plan, but if we’re not writing the business plan to raise funding, the truth is that there’s no better business plan than landing our first customer. Then a second customer, then five more. If we have no trouble landing our first 100 customers, our plan works, and it’s a matter of repeating or improving that process to win more.
See also: What entrepreneurs wish they had known before starting their business
It may sound silly, but as we’ve said more than once, what we need is a travel plan, not a business plan: knowing that we want to get from point A to point B, we’ll change our plan as many times as necessary.
Steps to start your business with no money
1. Start your business before you open it
You don’t know how long it will take to make a profit, so try to start your business part-time while you’re working full-time (if you have that option). That way you’ll have funding. Start looking for some customers, provide them with some services or start selling to them. That way, when you decide to open your business, you won’t be starting from scratch.
Needless to say, if what we’re creating is an online business, we can take our time until the business’s income exceeds the salary from our job. Let’s say this reduces the risk of loss as much as possible.
2. Surround yourself with experienced people and widen your circle
As the saying goes, success leaves clues. It’s a matter of bringing into your circle people who have already done what you want to do. You can learn a lot from other business owners, and they can help you avoid a great many mistakes. Above all, they can give you excellent advice.
3. Learn everything you can about the business you’re going to start
Closely tied to the previous point: learn, study and read everything you can about business, the sector you want to enter and so on. Prepare well and start out as an expert in the field. You’ll probably make plenty of mistakes even if you go to market well prepared, but the more experience you bring with you, the better.
Remember that in most cases a business succeeds or fails before it even opens. This way, customers also won’t see a novice trying their luck in business, but a serious professional.
4. When you feel ready, take the leap, but not a big one
Think big, but start small. This principle should always come first when it comes to starting a business.
Start the business at home if you can. Before plunging into the costs of an office (rent, a secretary, cleaning, electricity, water and so on), start your business at home. At the beginning, finding customers happens out on the street, not in an office. To get started, all you’ll need is a space at home, a phone and internet access.
5. Your first salesperson: the internet
Hire your first 24-hour salesperson. Set up a blog, a website or some web presence, although you should already have done this in step 1. That way some customers would already be reaching you online. Try to make your site as professional as possible. Today, if you’re not on the internet, it’s as if your business didn’t exist.
If your product can be sold online, start looking into reaching millions of users through the advertising that companies like Facebook offer today, which can put your product on the feeds of millions of people.
6. Your first sales reps
When you feel your tasks are piling up, that you’re growing and can take on more, hire your first sales reps. Look for people who work on commission. Try to find sales professionals, people used to working for incentives, or reps who are already established in the market with products similar to yours.
We’re assuming we’re at the start of the business and keeping financial risk to a minimum. Later on, of course, the sensible thing is to hire salespeople dedicated exclusively to your company and offer them good terms.
7. Take stock of your situation
How is your business doing? Have you grown in these months? Is my customer base growing every week? Can I take on more? Do I want to take on more? If the answer to all these questions is yes, it’s time to take the next step.
If your profits can now cover the rent on an office, go ahead. But don’t make the mistake of neglecting your customers to decorate your office. Your business is now your job. So handle all those premises-related tasks part-time.
See also: How much a business needs to grow each year to be profitable
8. Expand your network
You now have your own customers, those who come in through the internet and those your sales reps bring in. Broaden your scope or the number of sales reps, and increase your business’s sales in one of the ways we’ve already discussed.
If you’ve reached this point, it’s because in a way you’ve succeeded. But this is where you either establish yourself as a successful business owner or go bankrupt. The decisions you make from now on are decisive and key to how your business works. Once you reach a considerable volume of sales, not just anything will do. You need people on the payroll, your legal situation properly sorted out, and so on. Now is when you really need to invest.
How to start a business with less than 1,000 dollars or euros and make it work
In this video, an interview with Charles Denney, who is considered a business guru in the United States, he gives some ideas and tips on businesses we can start with less than 1,000 euros or dollars.
I want to highlight one idea from the video that some may find absurd: advertising inside pizza boxes. Well, it’s not an absurd business idea at all, because some years ago a man who had lost his job came up with it.
He ordered a pizza and, when he opened it, realised that the inside of the lid is the part people look at most when they open the box, so it would be advertising space that didn’t spoil the pizzeria’s logo on the outside.
This entrepreneur went to the pizzeria and asked how many pizzas they delivered on an ordinary day. The answer was around 700 on weekdays and about 1,300 at weekends. He immediately set about finding advertisers, and today he handles a large share of the advertising inside pizza boxes, earning a percentage as an intermediary.
As we can see, and as Charles Denney rightly says, opportunities are hidden everywhere; it’s a matter of paying attention.
See also: 5 ways to grow your business, by Charles Denney
Watch: Charles Denney on businesses you can start for under $1,000 (YouTube)
Featured image: Infrogmation of New Orleans, CC BY 2.0, via Wikimedia Commons.
