You’ve got to spend money to make money. Well, that’s the familiar phrase you may have heard. Yet if you have no money then how can you start a small business? How will you scrape together the cash needed to buy equipment or materials? Plus, starting a new business often means it’ll take a while before you begin collecting a paycheck. So how will you manage the business expenses and your personal expenses too?
Check out our 7 lucky tips for starting a new business when you’re flat broke.
1 – Keep Your Current Job
Deciding if you should (or shouldn’t) work while launching your new business can be a really tough decision. Many entrepreneurs wonder if they can keep their day job and devote enough time to get their company off the ground. There are a few points to consider when debating about leaving your current employer for your side hustle.
Will your new company’s business hours conflict with your steady gig? Do you have a complete start up budget that also covers personal bills? Will your employer be ok with you cutting back to part-time hours? When in doubt, keep your current job until you are more confident in your new business.
2 – Build Your Skills Cheaply
You don’t need to pay for a fancy MBA to start a new business. You also don’t need to bankroll a life coach or pay thousands of dollars for an inspirational workshop series. Instead read books or check-out online forums. You can also chat with other business owners for their free insights into starting a new business. There are plenty of ways to gain new skills or insights on the cheap.
3 – Get Your Resources for Free
A quick internet search will give you plenty of free business resources. If you look around in your community, you may find no cost business tools provided by professional associations or local schools. Kiwis starting a new business on a tight budget may want to visit https://www.business.gov.au/ for free assistance. Remember, paying for information doesn’t necessarily mean it’s better or more reliable.
4 – Build-Up Savings for Expenses
You can easily save some cash for your new business by avoiding simple luxuries like eating dinners out, satellite or cable television, and vacations. Other entrepreneurs go even deeper into savings mode by cutting back on utility use or downsizing their homes. You may want to talk with a banker to find out if there are any financing options available to assist in beginning your company.
5 – Ask Family and Friends for Help
Your loved ones want your new business to go well just as much as you do. That’s why family and friends are great people to ask for help. Often those closest to you are usually more than willing to provide counsel, donate time, and maybe even lend some start-up money.
6 – Apply for a Small Business Loan
Grab your business plan and visit a nearby bank for a secured business loan. There are important questions you’ll need to ask yourself. Like you’ll want to be sure you can afford the monthly payments even when cash flow is low or tax time arrives.
Is the interest being charged by the lender reasonable or could you do better? Even if you aren’t yet ready to apply for a loan now is still the time to develop a solid relationship with your branch manager. This can help you down the road when you have finance questions or are finally ready to borrow.
7 – Look for Funding Opportunities
Besides standard business loans, you can also tap into free government grants or funding schemes. You can also rely on peer-to-peer (P2P) financing which is an unsecured loan from another business person. The internet has opened a lot of alternative funding opportunities for new businesses like loans via apps (e.g. PayPal or Kabbage) and crowdfunding (e.g. GoFundMe). Many individuals that want to start a company but don’t have cash will rely on investors too. Investors can be anyone including friends, family, mentors, co-workers, or other business owners.
Starting a new business without any money is challenging but not impossible. Of course, you’ll need to find financial resources to cover all your start-up costs like securing inventory or buying business insurance. In the end, your financial risk could pay-off beyond your wildest dreams.