The general assumption is that you need a lot of money to start a business. Meanwhile, that is not always the case —you can start a business with little or no money!
Not everyone has a rich uncle or enough money in their bank account to set up a business. However, this doesn’t mean they can't start a new business. This guide will walk you through the tips and steps to start a business with little to no capital.
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You’ve probably heard about people taking loans and investing a lot of capital to build a startup. So, how feasible is it to start your new business without money?
The truth is it’s not impossible.
With the increase in digital tools, entrepreneurs have many opportunities to start a business without money or with as little as possible. So, the answer is yes. Yes, it’s possible to start a business without money if you follow the correct procedure and tips.
Starting a business can be a difficult journey especially when you don’t have enough money. Fortunately, there are steps that simplify the process of building a new business. Here are ten essential steps to start a business with little to no money:
Finding a good business idea is half the battle of starting a new business. Only 50% of small businesses survive up to 5 years1, so if you have long-term plans as an entrepreneur, you need to find a marketable business idea. Also, once you have a business idea, it becomes easy to go ahead with other steps.
There are many businesses you can start with no money; you just need to find something suitable for you. If you aren’t sure what business to start, here are some online businesses you can consider:
Investing your knowledge and skills is a great way to start a business with $0. Are you exceptionally good at something? You can consider creating a service business based on your skills. If you are good at writing, try blogging or freelance writing. Good at marketing? Try social media marketing.
The point is to package your skills and sell them as a service to people who need them. Meanwhile, if you don’t have a particular skill set, you can invest in learning one.
Dropshipping is a fast-growing business with a market value estimated to grow to $476.1 billion between 2021 and 2026.2 This is a good business idea for entrepreneurs who want to start a business with little to no money. Dropshipping is a business idea where a business owner sells goods without keeping the goods. Technically, you work as a middleman for suppliers/manufacturers, and you get a fee once customers order.
If you have a creative hobby or talent that involves building and creating stuff, consider selling them to people. Crotchet, beadwork, jewelry, and handcraft are some of the things you can sell on platforms like Alibaba.com.
You can make money by offering people an online product that solves a particular problem. Online products may include eBooks, recipes, online courses, videos, etc. For example, if you love cooking, you can create a recipe book. If you are good at fitness, you can make an instructional video for fitness enthusiasts. All you need is to find your area of expertise and sell it to people.
Many people are leveraging social media platforms to reach more customers. However, not everyone has the time or the skills to create content or strategies that actually sell. In this case, you can come in as a social media marketer to help brands manage their accounts and create effective strategies.
Whether you are starting a business with millions or no money, it is essential to conduct market research to ensure you are on the right path. Good market research will help you validate your business idea before pouring your efforts and funds into it.
Are there people who will be needing your services? Who are they? Do you have other competitors in the industry? What can you learn from them? These are some of the questions your market research should answer. Some tools to research your market include social media, search engines, surveys, focus group discussions, and so on.
New business owners often make one mistake: rushing to launch a business without writing a plan. It would be best if you created a plan for your new business idea, whether you have the money to invest or not. Once you have a business idea, you have to flesh out how you’ll grow your business.
A business plan often highlights your business goals and the framework to grow your new business. What do you want to achieve with your business in 6 months? How will you get people to buy your products and services? How are you going to differentiate yourself from competitors? A business plan is like a roadmap that clarifies your goals and the strategy to achieve those goals.
Typical business plans include:
While you can start a business with no funding, investing some money can help you scale faster. Also, some business ideas are impossible to start with zero money, so you may need to find investment if your business falls under that category. Some funding methods you can consider for your business include:
The benefit of getting funding from friends and family is that you do not need any big collateral. If you have friends and family willing to invest in your business, go for it. Meanwhile, you won't know unless you ask.
Another way to secure funding for your business is by seeking a loan. This is very risky, but if you are very confident in your idea, you may be able to get a small business loan with collateral.
Some governmental and private bodies offer grants to support would-be business owners. You can do some research to know if there is a program like that in your region or industry. Meanwhile, when looking for a grant, ensure you look for those that apply to your situation—e.g., women-owned, under30, tech, etc.
Angel investment is usually for tech startups where an angel investor who believes in your idea funds your business. Meanwhile, angel investors often invest in businesses in return for some shares. You can look for potential angel investors for your business and woo them to invest in your idea.
This is a popular way to get people to fund your business by publicly appealing. Crowdfunding allows the public to donate anonymous donations to a business idea they think is excellent. Business owners can easily solicit funds or investors with platforms like GoFundMe and Kickstarter. Crowdfunding has helped numerous companies and people to build up their ideas.
It's possible to start your business yourself, but it will take time and effort. You'll need people to build up some elements of your business, so it's a good idea to create a team and divide roles. Someone may be in charge of social media management, another for inventory, someone else for graphics designing, and so on.
If you plan on hiring people, you’ll need to account for the costs. However, if you are limited on cash, you can do most of the work all by yourself by investing time.
Also, if your products need to be sourced from someone else, you need to look out for vendors. When looking for B2B vendors, it’s best to do a lot of research to ensure you work with the right person.
A good approach to becoming a successful business owner is building a compelling brand for your business. Branding involves elements like business name, logos, company website, product packaging, marketing, and so on. It's essential to incorporate these creative elements across all your business platforms for consistency.
Building a brand also involves finding your brand voice, creating a compelling brand story, and shaping the perception of your business.
Today, a website is like the home of your new business. This is especially true now that almost everyone uses the internet to search for things. Your website is where people can see you, learn more about your business, and view your products.
For this reason, it’s essential to invest some cash in creating a professional-looking website for your new brand. If you are super tight on funds and can’t afford money to build a website, consider creating social media pages. Also, you can create a free website on platforms like WordPress and then later switch to a premium package with a domain name.
If you have a good business idea but not marketing it, you may end up stagnant. An excellent way to succeed with your new business is by implementing strategies to grow it.
One of the easiest and cheapest methods to market your business is social media marketing. It’s no wonder that 90% of marketers use social media for their business.4 With a social media account on different platforms, you can reach out to more audiences. You can also invest in paid ads to boost your business posts and reach targeted customers.
Another option is Search Engine Optimization which involves implementing strategies to increase your ranking on Google. This way, people who need your services or products can easily find you once they search online. Also, consider collaborating with influencers and other established brands to drive growth in your business.
The digital age has made it easy to access any information and resources in just a few clicks. Look out for free resources and tools that will offer you a guide to starting your business and building your idea.
You can also use free services or software to save costs on some of your tasks. Some digital platforms/websites useful for business owners include:
Situations are constantly changing, so you must prepare to adapt if you want to scale up your business. You may need to rebrand your business, offer new products, learn new skills, or hire more staff, depending on your circumstance.
Learning the steps to start a business is the first half of your entrepreneurial journey; the next half is to familiarize yourself with tips to start a business. Here are some tips you should know on starting your business with no money:
If you don't have money to invest in a new business, it’s best to go for a business idea that doesn't require much money. An expensive business idea that needs a lot of money before will be challenging to implement without any money. For example, selling your skills as a service will always cost less than starting a store that sells products. Also, starting a business from home will cost less than renting an office for your business.
Your business idea may sound good in your head, but have you tried telling your trusted circles about it? A great way to ensure your business idea is good is worth your time is by vetting your idea. Asides from a trusted third party, you can run up your idea among an online audience to see what they think,
Also, it’s best to build your business idea around what you know to eliminate the need for expensive investments or services. Make sure you have some knowledge or skills to start and launch your business idea. Fortunately, you can leverage online courses and guides to build your skills as a business owner.
Many top companies started small; they started selling from a garage or basement. Please don’t be worried about starting small, as it allows for more flexibility and gives room to expand.
You can start small, but you don't have to stay small. One thing about successful businesses is that they don’t stay the same; they keep growing and expanding. Once you have successfully launched your business, you should make investments to expand your business. As time goes on, you may need to improve on some aspects of your business to serve customers better. This may include hiring more people, offering more products, or getting a physical company.
One of the best ways to amplify your services and make yourself public is through digital media. Be comfortable publicizing your business and skills on online platforms. Social media offers a direct line to meet your potential customers and market your business to them.
If you currently have a job, it’s best to hold onto it while building your business. It’s not advisable to quit your day job because you may need some money to support yourself before your business takes off. Also, if your idea doesn't take off immediately, you have a job to support yourself until you revitalize your ideas. However, if you decide to quit your job, ensure you have something to fall back to.
So, you sold your first product, or someone hired your services! Instead of blowing out the money, consider reinvesting it in your business. Save up a few months’ profits and try to use it to cover the expenses of your new business.
Whether you’re into drop shipping or selling handmade crafts, it’s best to deliver good customer service. Offering excellent services will help you build a good reputation for your business and encourage more customers to buy from you. For example, if you sell a great product to someone, they are likely to patronize you again and tell others about you. However, offering a fake product or poor services can hinder the growth of your business.
An excellent way to grow as a business owner is by learning from analytical insights3 and feedback from others. Seek reviews from customers and work on areas that may need some improvements. Also, take advantage of analytical tools to understand your marketing performance and develop new strategies to improve.
Ask any business owner, and they will tell you that starting a business isn't as easy as it sounds. It takes a lot of hard work, patience, and persistence to build your business and succeed. For this reason, you should take it slow, expect some little difficulties, and leverage strategies to scale up your business.
Yes, you can start a business with no money. There are different small online businesses you can start with no capital – all you need is to find a profitable business idea, do your research, write a plan and launch your idea. You can also gather funding for your business through options like small business loans, crowdfunding, and angel investment.
The easiest business to start with no money is the one that requires little to no financial investment. Drop shopping is one of the easiest businesses to start with no money. This online business involves creating an online store by selling products available through partners of your choice. When a customer makes an order, your partner company will be responsible for fulfilling the order. This way, you save yourself from the hassle of buying, storing, and delivering goods while getting a commission on goods sold.
Another easy idea to start a business without money is by packaging your skill as a service. People often need services like writing, SEO consultation, and translations. If you are good at it, you can start selling yourself already.
The basic steps to starting a small business include:
There are many ways to start a business without money; the trick is to follow the proper steps and leverage valuable tools. One of the best platforms to launch your business and sell online is Alibaba.com.
Alibaba.com is a great B2B marketplace that makes it easy for sellers to find customers and make a profit. With Alibaba.com, sellers get to build an online storefront, post their products, reach millions of customers and sell their goods. To get started, open a seller account and start selling to customers.
References:
1. https://www.successharbor.com/percentage-businesses-fail-09092015/
2. https://www.statista.com/statistics/1264272/dropshipping-market-size/
3. https://online.hbs.edu/blog/post/importance-of-business-analytics
4. https://www.statista.com/statistics/203513/usage-trands-of-social-media-platforms-in-marketing/
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