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Published on December 27, 2019

How to Start a Small Business with Little to No Money

How to Start a Small Business with Little to No Money

How long have you been itching to start a small business? What’s holding you back?

So many people put off starting a small business because they think they need a healthy injection of capital to do it.

That’s simply not true.

So, how to start a small business?

Simon Paine, co-founder and CEO of the PopUp Business School, said,

“You can easily start a business with no money. When you’re starting, good enough is good enough. It doesn’t have to be perfect. Perfection will kill your business before you start because it costs money, and you don’t need to spend money to get going.”

Bootstrapping is a great way to build a business.

According to Paine,

“The bootstrapped business is the one most likely to survive. Why? Because you’ve built your entrepreneurial muscle by figuring out how to start for free, and you’ve engaged yourself in your own business. This process is critical, so don’t skip it.”

So once you’ve ironed out everything you need to get started—permits, licenses, registering your business name, opening a business account, creating a basic website, business cards, etc.—bootstrap what you can and outsource the rest.

Here are my eight top tips for starting a self-funded small business.

1. Start with You

If you’re wondering, What would be a good small business to start? You might want to take a closer look at what you have to offer.

  • What are your skills?
  • What are you most experienced in?
  • What knowledge or insight could you share that someone would pay good money for?
  • Who needs your help?

There is no right or wrong small business, just like there’s no guarantee that some will succeed more than others. I’ve watched startups with incredible products fail because they didn’t know how to market themselves.[1]

I’ve also seen pretty average products do exceptionally well simply because the founders knew how to connect with their prospects and deliver a one-of-a-kind experience.

Dmytro Okunyev, founder of Chanty, said,

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“The best way to start a small business with a small budget is to start with a problem that somebody else is having and solve it, rather than coming up with something new. That way, you already have your target audience right in front of you, and you can make your first sale immediately instead of spending a fortune on marketing.”

So, grab a pen and paper and jot down your skills, your experience, what you really enjoy working on, and who your ideal customer is. Use this as a starting point for figuring out what business you want to be in.

2. Now Talk to Your Potential Clients

Marie Farmer, the founder of Mini MealTimes, said,

“Talk talk talk to your potential customers. Do not spend a penny before you do this.”

Conversations lead to conversions. They allow you to get inside your prospects’ heads, to discover what they’re struggling with, and to devise a solution tailored to their needs.

So often, as business owners, we think we know our target market. We think we know what they want, where they consume media, what message would drive them to buy your product or service, and we couldn’t be more wrong.

I’ve met many entrepreneurs and small business owners who’ve invested thousands of dollars into getting their company off the ground, only to realize six months down the line that it’s all wrong. The business name, their offerings, pricing—all that money and time wasted, simply because they didn’t do their homework.

By talking to people, you build relationships and you get valuable feedback. Listen to what they’re saying and how they’re saying it; they’re gift wrapping your content strategy. You already know what they’re googling so you can create a video or article that talks directly to them.

This on-the-ground market research will also show you:

  • Whom you enjoy dealing with.
  • Where they’re based.
  • What their daily routines look like.
  • What their pain points are.
  • If they have an appetite for what you’re selling.
  • What they’re prepared to pay for it.

Then you need to figure out:

  • Who your competitors are.
  • What they’re doing that you can do better.
  • How you’re going to differentiate yourself.

The experience you deliver is your unique differentiator. Do it right, and not only will you win your first customer, but you’ll give them an experience that will keep them coming back for a lifetime.

3. Leverage Relationships

Networking is a lifesaver for small business owners. Building a circle of people who have experience in starting and growing a company is essential to your success.

They can be three or four steps ahead of you, but these are people that you can learn from and bounce ideas off of. They’ve been where you are, and they know what it takes to start a small business. Their experiences won’t all be the same, but that’s a good thing.

Richard Michie, CEO of The Marketing Optimist, shared his startup’s story:

“When I began, I sat at home and tried to learn how to run a business. It didn’t work, so I joined the Entrepreneurial Spark and then the NatWest Business Accelerator. Here, I was able to share my triumphs and disasters with others who were facing the same struggles. By sharing and listening, I became more resilient to the ups and downs of running a startup. Plus, I was able to build an even bigger network of valuable connections, which helped grow the business massively.”

The benefits of leveraging your entrepreneurial network include:

  • Finding new leads to pursue.
  • Re-engineering your mindset.
  • Building your confidence and alleviating your fears.
  • Easy access to free advice and support.
  • Help with goal setting and holding yourself accountable.

Take a moment to scroll through your phone contacts and email database. Note whom you can reach out to. These are the people you can leverage to grow your network and find new business opportunities.

4. Make a List of Everything You Need to Get Going

Now that you know what you’re good at, whom you want to work with, what their pain points are, and what you’re going to be selling, you need to make a list.

This is a checklist of everything you need to do to start your small business. Yes, you can google it. Or, and this is a better idea, you can reach out to your business network for advice on what to include on this list and whom to contact to assist you in getting things done.

I’m talking about lawyers, accountants, creatives, you name it. They’ll have these people on speed dial, and you’ll know they come highly recommended.

Once you’ve completed your list, Simon Paine suggests,

“Go through your list of what you need to start your business and see what you can get for free, borrow, barter for, sell something to get cash for, or sell your value before you create it. You absolutely can start a business with no money by following these principles.”

5. Be Ruthless with Your Spend

Whether you’re starting your small business as a side hustle or you’re investing your life savings into launching it, you need to be very careful about what you spend your money on.

Keep It Lean

Santiago Navarro, CEO and co-founder of Garçon Wines, advises to keep it lean in the early stage of launching your startup.

“Spend as little as possible, work hard, and focus on the main goal of developing a quality MVP (minimum viable product) to take to market for testing or selling.”

Don’t Pull a Salary

Danny Scott, CEO and co-founder of the CoinCorner, suggests not taking a salary.

“Throughout the first six months of our business, the founders took no salaries to help give the business the best chance to get off the ground and gain traction.”

If you don’t need to pull a salary, don’t.

Work from Home

You don’t need a fancy office. Duncan Collins, the founder of RunaGood.com, says,

“Work from a house. There are no business rates to pay and no rental or service charge.”

Plus, you can write off a percentage of your costs when tax season rolls around.

Barter Your Services

Do you have any skills, extra time, products, or services you could swap? Maybe you’re a copywriter and you need a designer to create your logo and business cards.

Barter your skills for their assistance. You could offer to proofread their content or recommend their services to any clients you get.

Maybe you’re opening a coffee shop and you need help with licensing. You could swap unlimited free cappuccinos for their assistance in acquiring and handling the matter. Bartering is a great way to achieve a lot without spending a cent.

How can you cut costs? Who can you barter services with? Go back to your list and add this information to it.

6. Think About How You Want to Position Yourself

Don’t be afraid to go after a premium client. In business, profit comes from the way you market yourself and positioning determines how much you earn. It allows you to attract a higher quality customer.

I’ll give you an example:

If you’re a professional musician and you position yourself as a subway busker, your “customers” will treat you as such and pay you accordingly. You’ll work long, hard hours to earn a small amount of money.

Conversely, if you position yourself as a professional concert performer, you’ll attract a very different customer and get paid accordingly.

Position yourself as a commodity and you’ll always compete on price.

7. Focus Your Energy Strategically

While business owners wear many hats, at some point, you have to be realistic about where you should be investing your time and energy. In the early days of starting a company, it’s normal to do everything on your own, to work crazy hours, and never get out, but this isn’t healthy for you or your business.

A study by Small Business Trends found 78% of small business owners report experiencing burnout in the first two years of running their company.[2] And if you’re too tired, stressed, and sick to work, you’re not going to make any money.

That’s why I always tell my clients to master one thing before moving on to the next. That could be one niche, one social media platform, or the first three modules of your online course, whatever.

But when you try to do too much, nothing gets done. Just ask Dani Mancini, founder and owner of Scribly.io:

“It wasn’t until I took stock of just how much I was trying to do that I realized I was setting myself up to fail. Rather than trying to do everything at once, I now focus on one thing at a time and commit to doing it well. That’s meant making difficult decisions like stopping our content strategy entirely until I’ve nailed other high-priority activities like prospecting and referrals (which have by far been more effective tactics).”

Knowing where to focus your energy is so important. Ask yourself,

What is critical to my success? What do I need to do now to guarantee growth over the next six months?

Once you’ve got this up-and-running then move on to the next project.

8. Outsource Whatever You Don’t Need to Be Doing

This leads me to my final point, outsource whatever you have limited knowledge in or isn’t a good use of your time.

Melissa Sinclaire, founder of Big Hair Beauty, said,

“Sometimes you may feel that your business can’t afford it and you’ll just do it all yourself, but most of the time you can’t afford not to.”

If you’re clueless about accounting, outsource it. If you know nothing about web development, Google AdWords, Facebook Ads, SEO, SEM, CRMs, or creating your standard operating procedures, outsource it to someone who does.

There are countless freelance websites where you can find talented professionals willing to take a fixed price for a fixed outcome.

Here’s a guide to help you delegate effectively: How to Delegate Tasks Effectively (Step-By-Step Guide)

The Bottom Line

Some of the most successful small businesses started as bootstrapped businesses at home, from coffee shops, and even college dorms.

They launched with a product or service that was good enough. They spent $100 on a website template, a domain name, and an opt-in form.

They regularly engaged with their market to uncover where improvements could be made, what worked, and what needed to go.

They set goals, called in favors, lived lean, borrowed equipment, bartered services, outsourced where necessary, and reinvested profits back into their companies—this is how you build a small business with little to no money.

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Featured photo credit: NeONBRAND via unsplash.com

Reference

More by this author

Allan Dib

Rebellious Marketer, Serial Entrepreneur, Business Coach, and #1 Bestselling Author

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Last Updated on July 27, 2020

How to Find Your Entrepreneurial Passion and Purpose

How to Find Your Entrepreneurial Passion and Purpose

I wrote a few articles about starting a business based on something you love doing and are passionate about. I received several responses from people saying they weren’t sure how to go about figuring out what they were most passionate about or how to find their true purpose. So I’m dedicating this article to these issues — how to find your entrepreneurial passion and purpose.

When I work with a new client, the first thing we talk about is lifestyle design. I ask each client, “What do you want your life to look like?” If you designed a business without answering this question, you could create a nice, profitable business that is completely incompatible with your goals in life. You’d be making money, but you’d probably be miserable.

When you’re looking for your life purpose, lifestyle design isn’t a crucial component. However, since we’re talking about entrepreneurial purpose, lifestyle design is indeed crucial to building a business that you’ll enjoy and truly be passionate about.

For example, say you want to spend more time at home with your family. Would you be happy with a business that kept you in an office or out of town much of the time? On the flip side, if you wanted to travel and see the world, how well could you accomplish that goal if your business required your presence, day in and day out, to survive? So start by getting some clarity on your personal goals and spend some time working on designing your life.

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At this point, you may need a little prodding, and you may want to hire a coach or mentor to work with you through this process. Many people are very used to the idea that there is a particular way a life “should” be. There are certain milestones most people tend to live by, and if you don’t meet those markers when or in the manner you’re “supposed” to meet them, that can cause some anxiety.

Here’s how to find your passion and purpose:

Give Yourself Permission to Dream a Little

Remember that this is your life and you can live it however you choose. Call it meditation or fantasy, but let your imagination run here. And answer this question:

“If you had no fears or financial limitations, what would your ideal life, one in which you could be totally content and happy, look like?”

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Once you’ve figured out your lifestyle design, it’s time to do a little more soul-searching to figure out what you’re truly passionate about. This is a time to really look within and look back.

Specifically, look back over your life history. When were you the happiest? What did you enjoy doing the most? Remember that what you’re looking for doesn’t necessarily have to be an entire job, but can actually be aspects of your past jobs or hobbies that you’ve really enjoyed.

Think About a Larger Life Purpose

Many successful entrepreneurs have earned their place in history by setting out to make a difference in the world. Is there a specific issue or cause that is important to you or that you’re particularly passionate about?

For some, this process of discovery may come easily. You may go through these questions and thought experiments and find the answers quickly. For others, it may be more difficult. In some cases, you may suffer from a generalized lack of passion and purpose in your life.

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Sometimes, this can come from having suppressed passion in your life for too long. Sometimes, it can come from eating poorly and lack of exercise. But occasionally, it may have something to do with your internal chemistry or programming. If the latter applies to you, it may be useful for you to seek help in the form of a coach, mentor, or counselor.

In other cases, not knowing your true purpose may be a matter of having not discovered it yet: you may not have found anything that makes your heart beat faster. If this is the case, now is the time to explore!

The Internet is a fantastic tool for learning and exploration. Search hobbies and careers and learn as much as you can about any topic that triggers your interest, then follow up at the library on the things that really intrigue you. Again, remember that this is your life and only you can give yourself permission to explore all that the world has available to you.

How Do You Know When You’ve Found Your True Entrepreneurial Purpose?

I can only tell you how I knew when I had discovered my own — it didn’t hit me like a ton of bricks. Rather, it settled over me, bringing a deep sense of peace and commitment. It felt like I had arrived home and knew exactly what to do and how to proceed.

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Everything flowed easily from that point forward. That’s not to say that I found success immediately after that moment. But rather, the path ahead of me was clear, so I knew what to do.

Decisions were easier and came faster to me. And success has come on MY terms, according to my own definitions of what success means to me in my own lifestyle design.

Dig deep, look within, and seek whatever help you need. Once you find that purpose and passion, your life — not just your entrepreneurial life, but your entire life — will never be the same.

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Featured photo credit: Garrhet Sampson via unsplash.com

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