Start Your Business With Little Or NOTHING

   Somehow in our present version of reality,  the word 'Entrepreneur' has become more fashionable than it used to be a couple of years back, largely because of the scarcity of well paying jobs the world over.  More and more people want to run their own businesses,  some even have fantastic ideas but cannot get it out of their head because of the lack of necessary funds to bring these ideas to life. 
Empty wallet
Photo Credit: viconsortium.com

      Finance does not necessarily have to be a problem in starting your business. There are several ways to circumvent this stumbling block . Fortunately,  I'm in the mood to share them. Read on.

      I will start by outlining the usefulness of start up capital ( ironical,  I know) to give you a very clear view of what you really need to spend on ( or don't)  so you'll know exactly how to minimize irrelevant spending and manage your limited resource. 

Take into consideration the following uses:

1.  Employees and Contractors:  No,  they don't work for free,  they'll need to get paid somehow. The cash to be spent on them should be an important part of your start up cost estimation especially when it's a business you can't do alone. 

2.  Operating Expenses :  Surely, there will be day to day expenses like transport,  marketing,  and if you're lucky enough to reside in an environment with epileptic electricity , you'll have to pay for diesel and gasoline, everyday. 

3. Office Space: This is a major part of the cost estimate.  You certainly cannot neglect cost of utilities......  and internet ( if you do,  you won't get to read my helpful tips) 

4. Associations : Subscriptions and Memberships : Not exactly something I or anyone else enjoy spending hard earned money on, associations and memberships are still necessary for businesses.

5. Equipments and Supplies:  Heavy ( or light)  machinery and specialized software should be planned for as well as needed raw materials if necessary.

6.  Legal Fees and Licenses : Paperwork,  registrations,  more paperwork and lawyers to help sort out the paperwork may be needed at some point.  Plan for them. 

     Now that we are done spelling out what needs to be spent on,  let's look at how we can reduce what needs to be spent on.

     Firstly,  REDUCE YOUR NEEDS 

    Chances are you may not need everything listed above.  You may feel you do need them but your bank account won't support your dreams.  Consider changing your business model a bit.  Tweak it in such a manner that the business will run with the essentials that your cash can afford.  You could reduce the number of employees,  look for a smaller office space,  do away with some subscriptions etc.  If you still feel the need for these things after you have successfully started and can successfully run the business without those needs putting a king size hole in the pocket of your business,  then,  by all means,  enjoy yourself.

      Alternatively , you can START SMALL

      Also known as bootstrapping, in lieu of starting on a large scale,  you can choose to start with just the basics.  For instance , if you own a blog you, don't necessarily have to cover every niche in the world if you can't afford it ( I know,  I've tried)  . Granted,  you'll be working with a reduced scope,  reduced audience and ultimately,  reduced profit, but it's all for a greater good.
     Once you eventually start realizing some revenue, you can choose to invest in yourself and build the business one step at a time,  piece by piece.

      Or,  OUTSOURCE 

     I am not really a big fan of this option because nothing goes for nothing.  They'll want a percentage of your profit,  more than a couple of shares in the business etc.  Unfortunately,  it may be your only option and I'll advice you to take it if you feel it's absolutely necessary.
     Here are a few potential sources you can try out:

 1. Family and Friends

2. Angel Investors : These are wealthy individuals who either have some money to spare or are genuinely interested in your business.  They see your business as investment opportunities and expect return on investment.

3. Venture Capitalists: Just replace the word 'individuals' in angel investors with organizations or partnerships and you'll get venture capitalists.  They tend to scout businesses that are already in existence.

4. Government grants and loans

5. Crowd funding

6. Bank loans

    Sure,  we can all agree that finance can be a problem when starting a business,  it doesn't have to be THE problem.  Consider the above options and enjoy your entrepreneurial journey. 

Comments

  1. I realised that the thing holding back my company from real growth was old, outdated software. So I reached out to one of microsoft dynamics partners and got Microsoft Dynamics instead. So much has changed since!

    ReplyDelete

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