Building a business without upfront investment is tough, but not impossible.
Many individuals are looking to start a business, but they often feel like it's an unconquerable challenge. If the case that you have not acquired any capital either through personal funds or investors, you might even be asking yourself how to even get the process started.
While it’s true that you might not be able to launch a cutting-edge business with a significant marketing campaign without having to use funds, it does not mean that business ownership or entrepreneurship is out of your reach. There are many zero-to-hero success stories that have started with “i had nothing other than an idea.. And now I have sold the company!”.
Businesses and revenue models come in all shapes and sizes, whereby many do not require significant funding to start. Bootstrapping (using little, or only personal, funds) can go a long way, but there are a few things to keep in mind that could be valuable and help you get to where you want to be.
Four points to consider when starting a business:
Build a team of smart, adaptable people looking for a win.
Keep your costs low by avoiding unnecessary spending.
Utilise technology that mitigates the need for additional resources.
Prioritize sales and marketing.
Hire like-minded entrepreneurs.
One of the biggest mistakes founders make is trying to do everything themselves.
Trying to carry the entire business on your shoulders and at the same time to deeply understand every aspect of your business (although is undeniably valuable), is unwise. During the initial business phases (especially when bootstrapping a venture) it will be necessary to perform different roles and take on more responsibilities, but once you have proved your business model, it is necessary to find the right help to take over the role.
A business in its initial stages is an ever-evolving entity. Things don’t always go as planned and ideas do not always align with reality. For these exact reasons, and many more, it is important to hire like-minded entrepreneurs or individuals who are adaptable and share your vision. Look for people that have a great varied set of skills that serve them well in different contexts.
Experience is one thing, but a great attitude is perhaps even more important in the case of starting a new business. A smart person can learn new skills, but require drive and passion to survive in a business with limited budget.
Keep your costs low.
One of the biggest challenges of starting a business is managing the costs incurred as effectively as possible. Rent, equipment, software tools, marketing and advertising that all form part of the greater business assembly and usually have recurring costs that inflate your overhead. If you do not have upfront investment, or are generating revenue, these costs can quickly drive you into the red. If these costs are not managed effectively, you may even reach a point of no return.
To avoid this, keep your monthly costs as low as possible. A low-budget business launch means problem-solving with hard work and creative solutions, not cash.
There are going to be unavoidable costs, but keep in mind that there is also always more than one way to fix a problem. For an example, as opposed to renting a new space, furnishing it and incurring a range of monthly costs that come with it, try using a co-working space where you can meet, utilise their boardroom space and enjoy the benefits of the included office amenities. There are plenty of resources at your fingertips so keep your costs low with creative problem-solving.
No one is going to dump money on your desk when you first start out. You will need to fight for every penny along the way, each cent just as important as the next. Avoid spending and focus on earning at all costs.
When you are solo, or a small team without investment (or only minor investment on hand), you will notice areas where additional support is required. Whether it be small tasks or repeated efforts to keep the business moving. However, with low/no budget you may not be able to hire someone to assist you. This is where tech comes in.
Fortunately in 2020 there are tons of great solutions for startups that can help you significantly scale your operations with only a few/no additional employees required. It’s all about working smarter, not harder.
Keep a keen eye on the daily activities of your business, taking note of the repeated and manual tasks, there is a ton of potential for you to embrace technology solutions to save yourself and your team significant time.
Too much time is wasted with completing small tasks that can easily be avoided through using tech solutions and some creative thinking! Do be a time waster. As a startup founder, time is everything.
Make marketing and sales a top priority.
You need a clearly defined product or service before you can sell anything, but in a low-budget startup environment, you may not have every aspect of your brand as close to “perfect” as you would like it to be. While there is no debate surrounding the fact that you need something to sell before you can market it, the reality is that, if you do not have money to dedicate toward product development, you will need some form of revenue to keep your business operational.
This might mean that you need to start selling before the "perfect" launch date. This gives you the opportunity to learn from your customers and improve whatever you are trying to offer.
Sales are the engine that keeps your business moving forward, but it is still important to be honest with your potential customers. Let them know that your business is still in its early stages and you will be continuously refining your service and product.
Consider offering early adopters a discount or "lifetime" deal. This will give you a base of customers who understand what you are trying to do and are open to providing feedback that helps you build a better solution for them. This is known as testing and it is a very important step in making sure you are headed in the right direction with your business.
These are only a few recommendations that may be of assistance to you on your entrepreneurial journey. It is important to note that each business is unique and will always be faced with challenges, especially when keeping your startup operation as lean as possible.
The most important thing is to stay creative and apply critical thinking in your work, remain flexible and adaptable, and always learn from your mistakes to continuously evolve your approach.
The road is long and filled with many challenges, but your perseverance will pay off!