It's easy to start a business when you've already secured the funds for the crucial first year, but what happens if you have no money whatsoever? Is it possible to bootstrap your way to having a sustainable business that is keeping its head above water and is making at least a little bit of profit every month?
DashTickets, a leading New Zealand magazine run by an enthusiast Mark Dash, was created that way, with zero upfront investment. That's why we invited Mark to give us some of his own tips for you broke entrepreneurs out there.
You'll have to do all the work yourself...
If you have no money to hire people, you can only rely upon yourself to do all the work. If you got friends and family that can be helped out with some stuff that's great, but everything from top down will probably have to be done by you. This includes both planning and execution. You are first the boss telling a person what to do, and then you're the person that has to do it.
...unless it's a family company.
If you can take the 'friends and family' approach a step further and get the family members on board, then you can have a real small company on your hands. But beware - taking family ties into a company is often bad news. Family members also tend to be much more relaxed in business terms than people who were hired to do the job.
You need a clear business plan
A clear, concise business plan that is rooted in reality is the single most important element of your business. Don't dream. Write up what will happen in the real world and how to get there. This business plan includes everything related to your business, from finances, sales, growth plans. A bird's eye view of everything, as detailed as it can be. Things will inevitably change as you go along and gather more information that you didn't have before - this is when the plan needs updating.
You need to know your customer
If you're marketing to individual customers (B2C), then it's vital to know your customer and to have your product or service fulfill their need. If you can do that for one specific customer persona, then it's likely the others will follow and you'll have a bunch of happy ones.
If you're marketing to businesses (B2B) or to the government (B2G), it's the same thing. In all cases, you need to know what your customer needs, and then if you fix that need then your business has a purpose.
Without any money you're probably down to services...
Products are a much different thing that inevitably requires some sort of an investment, regardless if you're reselling something or building some prototype. Services, if you're doing the service yourself, are free in terms of up front cost.
...unless someone handles the product cost for you.
Think dropshipping, or anything else where you're relying on an existing framework, such as publishing your book but having the book company print it and deduct the cost from the sale price of the book.
Conclusion
If you want to start a business without any money, your focus will always be on the same things.
One, you need to know what you want, what you have to offer to the world and why the world will want to pay you for your product or service. You will have to connect with your customer.
Two, you need a clear business plan with clear execution. This is easier said than done, as many people find the transition to a company owner challenging. Difficult decisions need to be made and you need to be as professional at all times, especially with money, as if you were just hired to be the CEO of some company.
Three, you'll probably need at least some sort of small funding for daily expenses and promo materials, unless you're relying on some existing framework to market your product or service for you.