How to Start a Business With (Almost) No Money

Entering the field of business can be very fascinating and fulfilling. On the other hand, it can be challenging and exhausting, most especially if you have no money in your bank account. So, how do you start a business without any on-hand financial resources? Don’t worry because we will be answering this tough question through the information below. Plus, we will include some relevant tips to make your entrepreneurship journey much more efficient and effective.

Key reasons why businesses need financial capital

First and foremost, it’s important that you know why businesses should have start-up money. On the surface, the amount of capital varies depending on your needs as well as the type of business you want to venture into. Therefore, it’s crucial that you create and evaluate your plans carefully to know the requirements. To give you an overview, below are some of the pivotal uses of money when jumping aboard your own business.

• Permits and other licensing requirements 

For a business to be legal, you have to acquire permits and licenses from your region. The requirements and the corresponding fees, however, differ according to your location.

• Office or workspace

This aspect covers a substantial percentage of your capital, particularly if you’re vying for a medium-sized to large-scale business. You have to take into account the workspace where you’ll manage your business, along with its correlated expenses such as utilities, internet bills, janitorial fees, and the like.

• Operating expenses

On top of the above-mentioned fees, there are also operating expenses incurred by most businesses. These include accounting fees, advertising/ marketing, insurance, subscriptions, and maintenance costs.

• Equipment and supplies

If your business is into production, then you will need to buy machinery and equipment to generate your goods and items. And of course, supplies are part of your resources too, along with other raw materials. Even things like name ID cards, lanyards, badge reels etc. need to be considered, 4inlanyards is a not-bad supplier.

• Employee salaries

Unless you run your business alone, you have to hire the right set of people to assist you in reaching your objectives. This means you need to allocate money to pay for their salaries and benefits.

Now that you have an idea of the common start-up expenses, you are given three options so you can eventually start your business even with limited to none resources.

Assess your business type and limit your needs

This is relatively the most imperative strategy if you want to kick off your business venture as soon as possible. Knowing your business methodologically allows you to make necessary adjustments. Ideally, you should opt for a business model with fewer demands. Or you can choose for something that would require less of the above-mentioned start-up expenses. There are many businesses that would involve cheaper costs. It’s just a matter of selection, and of course, your preference.

Moreover, you can reduce or even diminish the salary portion if you fully make use of your personal capacity. Being a sole employee of your own business has a great impact on your expenses as you won’t have to consider the wages of your employees. However, this can be quite challenging, especially with the division of tasks. Technically, you only have yourself or your family members to help you. Another useful tip is the utilization of your personal abode as your office space. Yep, you can definitely commence your business in the comfort of your home. Additionally, make sure to research thoroughly and find cheaper yet quality suppliers for your products. By directly dealing with third-party suppliers, you limit your expenses. This also makes your business processes more efficient. On the other hand, there are costs that are totally unavoidable such as permits, licensing, legal fees and the like.

Outsource your capital

If you really don’t have enough money, don’t worry because you have other ways to make it work. And that is outsourcing your capital from other people or organizations. Below are some potential sources to help you start your business.

• Family and friends

Of course, your personal acquaintances should top the list. You can get financial support from your loved ones, so don’t rule out the possibility of them assisting your business goals.

• Bank loans and online lenders

Banks are also notable platforms for your start-up capital. So, if you’re eyeing to commence your business but don’t have enough funds, you can apply for a small business loan. Traditional banks are highly recommended because of their terms. However, if you want leniency in terms of requirements, you can opt for online lenders. Just be wary of the interest rates because these creditors often have higher charges.

• Government loans and grants

Another option is to get help from the government. There are a number of local government agencies that back up small businesses through loans and grants. So, it’s best that you do your research and comply with the application requirements.

• Angel investors

These people are considered wealthy individuals who fund start-up businesses in exchange for partial business ownership. Because of the nature of the support, you need to carefully weigh your options so you still get your business’ worth.

• Venture capitalists

Just like angel investors, venture capitalists provide financial support to businesses. However, these aren’t individual persons but normally partnerships and organizations. And often than not, they prioritize those who already have existing businesses.

• Crowdfunding

Lastly, there’s crowdfunding, which is quite popular yet challenging. If you choose this one, you have to generate a fascinating idea that will attract potential donors for your business. It’s something that you need to work on methodically so you get support from other people.

Bootstrap your business to success

Ever heard of bootstrapping? This is a method where you build your own business from scratch using your personal savings―and a dose of luck! Bootstrap serves as a warm-up period so you can assess our company strategically before you go directly into a full-sized business. By entering this phase, it will be easy for you to adjust and eventually establish the company you’ve always dreamed of. More so, this helps you reduce major costs. And if ever you have decided to partake in bootstrapping, do consider that there will still be minimal expenses including supplies, equipment, and other operating costs.

Clearly, money is an essential factor for anyone who wants to start a business. That is why it’s pertinent that you build up enough money to make your business work. Generally, profits go in after 6 months, hence you have to be realistic enough to cover expenses from your commencement until such time revenue kicks in. Furthermore, entering the business world is something that needs planning and patience. This means that you have to be fully dedicated to your passion to make it work.