One of the biggest problems for many entrepreneurs, which can see them get stuck in the planning stages, is a lack of start up finance. If you have a great business idea, money should never be a reason to hold you back.
However, starting small with a limited budget does mean that you need to be creative, be careful with every penny and make sure that every decision you make is a wise one. Seeking the right guidance is therefore essential. It is perfectly possible to start a business with no money at all, or close to nothing, but here’s what you need to do.
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MARKET RESEARCH
Before you take any steps to starting up, you need to make sure that what you are going to sell is something the market wants to buy. To do this you need to conduct extensive market research. There are many ways you can do market research; you can conduct surveys, study your competitors and how they do business, offer test products, or a free trial run of your service in return for feedback from the public. But you must gain answers to some key questions such as who your likely customers are, where you can find them, what they are looking for, what problems you can help them solve, and what you are going to do differently to your competitors.
Social media is an ideal medium to use for your market analysis. It allows you to communicate with potential customers, gauge their opinions, get their feedback, test ideas, follow trends and track what your competitors are doing. All of which is crucially important information for you to base your decisions on when looking at how to take your business idea forward.
HAVE A SOLID BUSINESS PLAN
When you have completed your market research, you need to take your findings and use them to create a business plan. Not only should making a business plan be an essential part of your planning stage, but it will be required of you for any application you make for funding.
Your business plan should include your business model, your sales and marketing plan, information on your competitors, your forecasts for turnover and profit, and your plan for how you will fund your business as you grow. Your business model must be sustainable and your plan must be realistic. You should set yourself short term targets as well as long term goals. Break your short term targets into even smaller, more manageable objectives that take you on a step-by-step progression through the various milestones on your journey to a profitable business.
USE YOUR SKILLS TO OFFER SERVICES BEFORE PRODUCTS
Starting a business without funds is hard if you’re offering products as you will almost certainly need to buy stock upfront before you have the sales, and you will also need a marketplace, whether that’s an online shop or a physical shop, both of which cost money. Selling services however, doesn’t require anywhere near the same level of (or in some cases, any) startup capital. If you have a skill set or expertise that can be used to generate cash flow, then concentrate on marketing these. If you want to then move on to selling products, you have some funds in your pocket.
SEIZE THE OPPORTUNITIES AROUND YOU FOR FREE MARKETING
Marketing will be an essential part of your strategy, and your budget when you have one. If you’re starting with nothing, then you need to take advantage of all the free marketing opportunities you can until you reach a point where you can set aside a budget for this key area of your business. Free marketing could include word of mouth; use your family, friends and satisfied clients to spread the word for you. You could even offer them a discount or gift if they recommend you to a friend who becomes a customer. Social media is also an excellent way to market your business without needing a big budget. Make sure you have accounts across all the popular social media platforms and spend the time on learning how to make the most of them. Writing guest blogs for popular social media accounts, and websites, and then linking back to your website and social media accounts, is a great way to make yourself look authoritative about your field of business, and also bring in leads which you can then convert to customers.
FUNDING
At some point or other, you are going to need to invest in your company, and that’s going to take funding. Whether it’s money for buying inventory, hiring staff, investing in equipment or taking your marketing to the next level, if you haven’t got the money saved up yourself, you are going to need to find it from somewhere else. There are various different avenues for funding that you can try. Some are more receptive to new businesses than others, but it’s important not to give up if you don’t find success with the first place you try. The banks are an obvious place to look for loans, but they may be reluctant if you don’t come with a solid business history and an impeccable credit score.
Alternative places to look for financial backing include crowdfunding sites such as Crowdfunder and Kickstarter. These online platforms provide a medium for entrepreneurs to pitch their ideas to those who wish to back a project with lots of potential. These platforms also create an avenue for pre-orders if you have products to sell. Or angel investors who look for a company to back in return for a share of the business and the future profits. A line of credit is another good way of providing temporary cash flow while you get up and running, and a facility many new startups rely on.
Traditional models of starting a business dictate that you need to have the funds in place before you start a business, which would rule out the vast majority of entrepreneurs and mean that many of the greatest business ideas that have revolutionised our world, would never have made it to market. Thankfully, modern business models and the availability of many different types of startup funding, from line of credit to crowdfunding, have meant entrepreneurs no longer need to be held back by a lack of funds. So take your cue from some of the greatest entrepreneurs in the world and get creative to get started!
