It can be very daunting to start a business with little money. However, with sufficient planning, it can be possible to achieve business growth and success with zero capital.
In fact, understanding how to start a business with little money can be incredibly positive. It will teach business owners how to be creative, lean and entrepreneurial.
There should be no reason why you cannot start your own business, as long as you have marketable skills and already own or can access some vital equipment. We outline some interesting ideas below on how to start a business with no capital or funding.
Choose a Low-cost Business Model
It is important to choose a business model that does not require a significant amount of funds in order to get started. For instance, service businesses can cost less to start than product businesses. This is because service businesses generate their income through skills and time, as opposed to physical assets that may need to be made, bought or stored away – all of which contribute towards additional outgoings.
As such, it is worth considering starting a low-cost service business. Ideas for these could include consulting, photography and videography, writing and editing, tutoring and training or translation.
Calculate Business Costs
It is a good idea to always calculate any anticipated costs that will come with starting a new business. This can then help you to build up some form of savings target so that you are able to launch the business successfully.
It is worth considering the following costs associated with starting a new business:
- Marketing and Branding – This could be anything from designing and building a website to printing out promotion leaflets
- Registration fees – It is important to note that in the UK it costs £12 to register as a limited company
- Assets – This could include your office and technical equipment, it may be worth purchasing this second-hand or loaning it to reduce initial costs
- Fixed costs – These could include anything from rent and employee salaries to subscriptions and insurance. It is always worth taking time to worth all available options to ensure that your business will receive the best deal possible
It is always best to overestimate costs so that you can understand whether your initial goals are achievable with little funds.
Minimise Business Outgoings
When starting a business with little money, you must try to keep your costs as low as possible. There are a number of ways in which you could do so, including the following:
- Work from home – This reduces any outgoings spent on rent, office equipment and furniture, utility bills and transport on behalf of employees
- Use free online services – There are a number of ways in which you can build a basic website for free or at a very low cost (less than $10 per month). These online services include Wix and WordPress. Additionally, it is free to organically market your business through social media too
- Seek our second-hand or free equipment – It is always worth using second-hand sites such as eBay or FreeCycle to find free equipment on behalf of your business. This will save a lot of funds that would have been spent upfront on brand-new equipment
Seek Out Investment Streams and Opportunities
It is important to remember that the US Government offers monetary support and funding for businesses from particular regions or in certain industries.
In addition to this, there are a number of alternative streams that could be considered to boost the funds available to your business. There are things such as cash advances, invoice finance or trade finance that can be used if you need money quickly for your business. Otherwise, you could consider borrowing from friends or family members, crowdfunding, and meeting with angel investors.
Plan for a Positive Cash Flow
Cutting down on costs as mentioned earlier will help towards balancing towards a positive cash flow on behalf of your business.
It is important that you are able to pay your outgoings, especially fixed ones such as employee salaries, in full and on time.
In order to do so, alongside building a new business, it may be worth monetising an existing interest or hobby, or taking on a part-time job so that you can ensure fixed costs can be met. This could include selling art or babysitting in the evenings or on the weekend outside of working hours.