Are you wondering how to start a business with almost no money and if it is even possible? Why should you, even if you just sold your last startup for millions and have plenty of cash?
No matter what business you try to start, there will be some expenses. Yes, even with those crazy “no money down, no credit required” real estate schemes and late-night commercials. Even a seven-year old’s lemonade stand requires a table, sign, cups, water, and lemons.
However, it may cost you far less to start a very exciting business than you think.
In fact, some of the biggest, most famous and profitable companies today started with less than $10,000. Barbara Corcoran from Shark Tank said she started her career and highly successful real estate business by borrowing just $1,000.
Facebook was started with just $1,000. One of America’s largest homebuilders, Lennar started with a young entrepreneur investing just $10,000. Today they have annual revenues of nearly $13B.
Airbnb started with just just an air mattress on a living room floor. They now have annual revenues of almost $3B. There are plenty of business ideas that were started with a lot more money that have gone bust.
Some of the smartest and most experienced entrepreneurs I have interviewed on the Dealmakers Podcast have turned around and bootstrapped lean startups, even after selling previous companies for hundreds of millions of dollars.
It Makes You Get It Right
When thinking about how to start a business with almost no money it is key to keep in mind that money only amplifies everything else. If you can amplify waste and the speed you go bankrupt if things aren’t set up right. Or it can scale a successful business model.
When you start out lean, you can’t afford to waste money or time or customers. You have to get it right. You have to have a profitable business model. You have to constantly delight your customers. Then when you have money, you are just multiplying your success.
Bringing In Other People
Whether it means raising outside money or leveraging other people when you bring in other people instead of just putting all of your money in and just doing it your way, you gain a lot of insights from others and you have a lot more people rooting for you and invested in your success.
It Gives You Flexibility
If you are thinking about how to start a business with almost no money, one of the best things here is that when you aren’t burdened by debt and owing others or having to work on their timeline and goals, you have more options, more flexibility and more freedom to do what you know is best for your customers, mission and the business for the long term.
You then have a strong negotiating position when you do decide to engage in fundraising or selling your company and M&A deals.
What Costs Money?
If you are wondering how to start a business with almost no money, the truth is that there will at least be some small costs you need to fund.
At the bare minimum this will probably include:
- Phone and wifi connection
- Incorporating your company
- The website domain name and landing page
- Hiring assistants
- Expanding your learning
- Gas, electricity or a MetroCard to get out and hustle
This may only be a few hundred dollars to get off the ground and gain your first customers.
Regardless of thinking about how to start a business with almost no money you should keep in mind the ways to make it with little money below.
1. Leverage Other People
There is a balance between hustle and capital. If you have little money, you have to hustle more. If you have more capital, you can be more strategic and hire more people to hustle for you. You can leverage their time, knowledge and expertise. That applies to salespeople, technical talent or even hiring an M&A advisor.
One of the best ways to make it work with little money is to be resourcefulness. It’s not about what you have or don’t, or even what you know. Success is far more about being creative and fully using resources out there, knowing where to find answers, and who to ask. You might be surprised at the help you can get if you ask.
3. Sell First
Focus on gaining sales and using those early revenues to fund your growth. Or in some cases, you may get pre-orders and advanced funds to go build it.
In some cases, you may really need more money to get to the next level and grow your startup business. You may have a really long sales process as is the case with enterprise customers. You may have to build an expensive prototype. You may have to get more users to make a marketplace work.
Ways to fund your startup include the following.
Maybe you can bring in cofounders or a capital partner to finance the start of your business.
5. Credit Cards
In my opinion, this is one of the most dangerous ways to make it with little money because it may be hard to rapy it back. Many now-famous founders started out financing their startups with credit cards. You may already have some available credit you can use to start.
6. Personal & Business Loans
If you have reasonable credit you may qualify for a personal loan or line of credit. Traditional bank business loans aren’t easy to get for new businesses. Though you may find it easier to get store credit, credit with vendors and small business credit cards.
7. Advances Against Orders & Contracts
If you prove demand and product-market fit by taking pre-orders, you may be able to use those contracts and commitments to obtain a working capital loan, merchant advance or other types of factoring loan.
8. Friends & Family
If you really have an idea you believe in and are confident will work, then you will want these people you care about to participate in that success. You don’t know if you don’t ask.
There are plenty of crowdfunding portals to choose from. There are industry-specific crowdfunding sites, peer to peer lending sites, donation and debt or equity crowdfunding options.
10. Angel Investors
The first step towards raise venture capital is to raise an early-round from angel investors. Pitch them, apply to startup accelerators and network.
Besides thinking about how to start a business with almost no money, you should remember that ultimately if you end up wanting to raise money storytelling is everything and for this, you need a killer pitch deck.
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE