How Can I Start a Business With No Money and Without Going to The Bank?
If you’re thinking about starting your own business, whether or not you have something to sell in mind, you must be thinking about how or where to get the money you need to launch everything… And you’re absolutely right: business funding is no easy task. It needs to be planned and will be done differently regarding who you’re asking for money.
In this article, we’re going to focus on the DIY way to start a business, with no money. That is, without asking a bank for a loan or searching for investors. We will see how you can raise money and sell products even before creating them… all of this legally and honestly of course. Let’s go!
An Idea That Helps People
Best-selling products are ones that improve people’s lives. Even if the exercise is slightly different depending on if you already have your business idea or not, the aim remains the same: you need to determine what about the product you’re selling will help people. The best way to do this is to focus on your own daily life and ask yourself what could help to improve it.
If you’re starting at square one, start by making a list of all the tasks you have to accomplish regularly and try to find something you could do to facilitate these processes. Think about home or work, or even holidays: what annoys you, what would you change, what do you wish was easier?
If you already have a product, go back to what inspired you. Don’t focus on the product but think of what it’s going to do, what does it facilitates. Maybe one feature is going to help a certain type of person or be applied to a particular situation? Make a list to keep your thoughts on this matter organized.
Show this list to your friends and family, people that you trust. It will help you see who shares your ideas and experiences, and perhaps highlight some new ones. Likewise, if you came up with an idea that you think you can do business with, ask around to see if people will be ready to buy it, maybe it will give you some extra features ideas. However, be careful who you speak to, as good ideas can get stolen.
Organise a Pre-Sale or Crowd Funding Campaign
The reason I insisted on finding what about your product can improve people’s lives is because it’s precisely those people you’re going to “ask” for money. That’s what pre-sale and crowdfunding are all about: presenting a product or a service you want to create to the people who are actually going to buy it in the end. The presentation needs to be simple and focused on the result. Keep in mind that what you sell is not the product but what it does, how it is better than the others. Let’s dive a little deeper into these two business funding options.
What is a Pre-Sale?
A pre-sale consist in selling a product or a service at a discounted rate before it’s on the market. To organise a pre-sale, the first thing you need is a clear view of what it’s going to look like in the end. Put together a 3D model or even build a prototype if it’s not too expensive to do. It’s a win-win process: the customer gets a discount on the product and you get to see if there’s a real market for your product before producing it! For those interested, we’ll soon make a detailed article on how to organise a successful pre-sale.
What is Crowdfunding ?
Crowdfunding consists on finding funding by asking a large amount of people a small amount of money. It’s basically the opposite of traditional business funding, where you ask a small amout of people to give you a lot of money. It’s a good thing because instead of limiting your option to a few key players like banks, venture capital firms or angel investors, you can ask everyone to get involved. Like a pre-sale, it’s also a good way to see if you have buyers!
Now, how does this work? You register on a crowfunding platform – Kickstarter is the largest one – and showcase your product or service. Go into the details of how it works and tell people what you’re going to do with the money they give you. You also need to prepare different levels of rewards in exchange for donations. For example, if people give you $20, they can have goodies or a discount and if they give more, like $200, they may get exclusive distribution of the product. Again, we’re going to explain all about crowdfunding techniques in a further article.
Write Your Business Plan Yourself
Even if you don’t reach traditional investors like banks, venture capital firms or angel investors, you still need a solid business plan. If you don’t have money to invest in a consultant, you’re going to need to write it yourself. Do it and take the time needed for this. It will help you achieve a global vision of your business: who are your customers and competitors, how much will everything cost and what do you really need to start and a lot of other things, like the risks you face. Writing your business plan is also a good way to learn about the entrepreneur world if you are new to it !
Actually, we’re all about helping you do that by providing a free financial business plan template to download by clicking this link. You can also learn a little more about the content and use of a business plan in this article.
Partners or Sponsors
Finally, if you go with a pre-sale or crowdfunding and it works, then you can reach for professional partners or sponsor for your idea. What company wouldn’t want to have his name on a brand new idea that already has a customer base? By aiming to the right partners or sponsors for your market niche, you’ll discover that you can raise a lot of money. Plus, you’ll benefit from your partner’s customer base and extend your own!
We hope this article gave you some potential solutions to start your business with on a budget and without going to the bank. Starting small is not a disadvantage and should not stop you. Stay tuned for more info on pre-sales and crowdfunding soon.