Entrepreneurs will often have amazing business
ideas, but they put them on hold due to a lack of capital. They assume that
their idea will never get far off the ground unless they have major funding
behind them.
It seems that every day there is a new startup
receiving millions of dollars from venture capital firms, but what you don’t
hear about is the several
startup failures that burn
through millions of dollars only to fizzle out and shut their doors forever.
If your idea and plan of execution aren’t well
thought out from the beginning, no amount of money can turn it into a winner.
Have a great idea but very little money? Don’t let that stop you! Yes, there
will be ridiculously long days with little to no sleep. Yes, you are going to
be stressed. But those that want it bad enough will make it.
Here are eight tips that can help you get your
idea off the ground with limited funds.
1.
Build your business around what you know. Instead of venturing
off into uncharted territory, make sure that you build your business around
your skills and knowledge. The less you have to rely on outside sources the
better. When your business is built around your own personal expertise you can
eliminate consultants and outside assistance.
Also, having that knowledge is sometimes all that
is needed to successfully take the plunge into entrepreneurship.
2.
Tell everyone you know what you are doing. Inform your family,
friends, business contacts and past colleagues about your new business.
Call, send emails and make your new venture known on your
social-media profiles. Your friends and family members can help you spread the
word, and past business contacts can introduce your brand to their professional
contacts as well. This type of grassroots marketing can help introduce your
company to a much larger audience.
3.
Avoid unnecessary expenses. You
are going to have plenty of expenses, and there are some that just can’t be
avoided. What you can avoid though is overspending. Take something as
simple as business cards. You could drop $1,000 on 500 metal business cards
that give off the “cool” factor, or you could spend $10 on 500 traditional
business cards. Being frugal in the beginning can be the difference between
success and a failed business.
4.
Don’t get buried in credit card debt. There is a smart way
and a suicidal way to use credit when starting a business. New computers,
office furniture, phones and supplies can all quickly add up. Instead of
purchasing everything at once and throwing it all on a credit card, use your
company’s revenue to finance your expenses. Eliminating the stress and burden
of debt will greatly increase the chances of creating a successful business.
5. Make sure your receivables policy won’t sink
you. If
your business is a retail operation then this isn’t going to apply, but if you
are providing services such as consulting or products to retailers you need to
make sure that your payment policy is well thought out. Can you remain above
water with net-15 or net-30 terms? Don’t base your receivables on what you
think your customers will want. Base them on what is going to make your
business operate successfully.
6.
Build up sweat equity. When I first started my business I
worked around the clock, handling every aspect of the business as well as the
marketing and growth. All of the hard work and long days that you put in isn’t
for nothing. You are building a brand and your hard work is essentially
increasing the value of your business. Your sweat equity will come into play if
you ever decide to sell off a piece of your company or take on a partner.
7.
Take advantage of free advertising and marketing. There are several
ways to generate a buzz for your business without breaking the bank. Social
media is a great way to gain exposure and interact with potential customers.
You can also reach out to local media and offer your expertise.
Make as many local media contacts as you can and
be extremely responsive with their requests. This can lead to them to branding
you as the local authority, generating plenty of free press for your business.
8.
Get ready to hustle. Hard
work is an absolute necessity, but when you are starting a business with little
to no capital then you must be prepared to dedicate everything you have into
making the business a success. This might mean cold calling, handling customer
support, dealing with billing and accounting, and every other working part of
your business. You will wear many hats and it will require the majority of your
time and energy if you are to make it.
Don’t let limited capital prevent you from taking
a great idea and running with it. Will it be difficult and will you have some
stressful situations? Of course, but that is part of entrepreneurship.
Have you started a business with sweat equity alone? If so, let us
know about your experiences in the comments section below.
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