How Can You Start a Business Without Money? Tips for Beginners
Starting a new business can be both exciting and overwhelming! Two questions that I often hear are, “How can you start a business without money?” and “How can I get funding for a business idea?” This post aims to give a realistic approach for the everyday entrepreneur starting a local business. The world of internet startup advice is rife with myths and half-truths. Many people wonder, 'How can you start a business without money?' and I find the idea both challenging and inspiring.
The idea that you can start a business without money is a half-truth. As the old adage goes, “It takes money to make money,” and it’s nearly impossible to open a business without any money at all. However, there are cost-saving strategies that can save hundreds to thousands of dollars for business owners who are willing to get creative and resourceful.
Determine Where to Invest Your Resources
When considering how can you start a business without money, let your industry and customers guide the process. For example, a tailoring business requires sewing machines capable of meeting customer needs, while an ice cream shop will need a freezer. That doesn’t mean the most expensive freezer or sewing machine. It’s easy to get caught up in needing the “best” and go over budget. Drawing from my experience with thousands of business owners, here are my favorite tips for starting a business on a budget. I’ll also highlight key areas where it’s wise to invest early on.
Wait to Register Your Business
Many new business owners start by registering their LLC and purchasing a URL for their future website. While these steps are important, I recommend waiting until you’ve done some initial research. Some business ideas sound great until you jump into the details–especially if it’s an industry that is new for you. For example, I love shopping for kids' toys and love the idea of curating a kids’ toy store. However, because of my experience as a coach and startup expert, I know that I wouldn’t thrive as a long-term storefront owner.
Entrepreneurs tend to think creatively and we get a lot of good ideas. Answering the following questions can help you avoid jumping into a business that isn’t a good long-term fit, saving you time and money:
- Is your business name available and not already in use?
- Is your URL (website address) easy for customers to understand and remember?
Once you’ve confirmed those two items, ensure you can confidently answer these questions about your business idea:
- What do you sell?
- Who are your customers?
- Why does your product or service make a difference in the lives of your customers?
- How do you sell your product or service, and how do your customers find you?
- Why do you want to sell?
- How much does it cost to sell your product or service?
- When do you sell your product or service? Is it always available, seasonal, or dependent on other factors?
Answering these questions may take a few weeks or even a couple of months, and while I know you are eager to move forward with your business, investing the time now will pave the way for a smoother launch.
An additional way to invest early on is to consult a CPA and a lawyer. They can explain legal and tax implications and ensure you avoid investing in a name or product that’s already owned by someone else.
Buy Used and Wait to Purchase
Fifty percent of businesses close within five years, which means a lot of equipment or machinery becomes available at a fraction of the cost. From furniture to espresso machines to decor, buying used can significantly reduce your startup costs. It may require more effort, such as searching used restaurant sites or reaching out to industry peers, but it’ll save your bottom line.
Additionally, avoid buying items before they are absolutely necessary. For example, I’ve wasted money on software subscriptions I didn’t use immediately. These small expenses add up over time. It’s pretty amazing how $15/month can add up when you use multiple services.
The same caution applies to equipment. Wait until customer demand justifies the purchase. Buying prematurely can lead to unnecessary financial strain. I have worked with business owners who spent tens of thousands of dollars on new vehicles or equipment that didn’t reflect the financial health of the business. They wanted a fancy vehicle to make the business look successful but ultimately, the business closed and the equipment was sold at a loss. If the business owner had waited to invest in the more expensive equipment, they would have kept their costs lower and had an easier time paying the monthly bills when sales didn’t meet their expectations.
When to Invest
How do you know when it’s the right time to invest in equipment? If you’re turning customers away because you can’t meet demand, it may be time to increase your capacity. However, remember that increasing capacity doesn’t automatically increase customers. Start small and scale gradually.
Plus, an added benefit to buying used? It’s better for the environment and reduces your carbon footprint as a business.
Free Marketing Works
When exploring how can you start a business without money, free marketing can be one of the most effective ways to grow your business. Leveraging these strategies answers the question, 'How can you start a business without money?'
What do I mean by ‘free marketing?’ Activities that have little or no cost but directly impact your sales. Here are some of my favorite free marketing activities:
- Networking Events: These events give you the opportunity to build new relationships and strengthen existing ones.
- Referrals: Ask friends and family for referrals but be specific about what type of referral is most helpful for you.
- Google My Business Reviews: These are a must if you have a physical location or serve a local area.
- Word of Mouth: You are your best salesperson. Talk about your business everywhere you go!
- Partnerships: Collaborate with businesses that serve a similar customer base. This will often help both businesses accomplish more!
Consistency is key! Your customers need multiple touchpoints before they make a purchase decision.
Building a Digital Presence
A cohesive digital presence can be a wise early investment. A simple website that clearly states who you are and what you do helps build trust. There are many free or low-cost templates options available at a reduced price and you can work with a local graphic designer to provide the level of polish that your customers expect.
Good Enough is Perfect
Knowing how can you start a business without money also means recognizing when "good enough" is sufficient.
In the era of aesthetic marketing, it’s easy to think everything must look perfect. But your product or service doesn’t have to be flawless to sell well. If it resonates with your ideal customer and provides high value, then focus on sales! As a consumer, I’ve been disappointed by many products or services that were pitched as “the best” and fell short. Pretty pictures don't make a high-quality product and a stunning logo won’t be as valuable to your customer as a good experience.
Tiny Tweaks Add Up
You likely have a vision of how you want your business to look in the next year or two. However, your to-do list might feel overwhelming in the face of that vision. I’ve coached many business owners who have felt trapped because they just weren’t sure what to do first. My advice: Start selling in a way that is affordable and manageable now. For instance, if you’re opening a tailor shop but can’t afford high-end machines, offer basic repairs first. Making ice-cream? Start with micro-batches. It’s okay if it’s not exactly what you want, you can make small adjustments and improve as you go. What matters most is listening to your customers and consistently providing value.
Remember, things rarely turn out exactly how we envision they would and this also applies to starting and running a business. The value in starting to sell before you have the “perfect product” is that it’ll cost you a lot less time and money to make changes than it will once you have higher costs.
Learn from Others
One of my favorite sources of startup stories is the podcast, How I Built This. It shares founder stories and highlights the challenges and triumphs of building a business. Learning from others’ experiences can help you navigate your own journey.
Investing in Your Business
Figuring out how you can start a business without money is challenging but you can save a lot of time and money by using cost-saving strategies, prioritizing value, and making thoughtful investments. If you’re curious about financing options, check out this post on grants and small business loans.
Getting Started
Ready to take the next step? The Guided Small Business Planner is your go-to resource for building a solid business foundation, minus the guesswork. It walks you through every stage, from identifying your target customers and crafting a marketing plan to setting prices and defining sales goals.
You May Also Enjoy
- How to Start a Business from Scratch
- What is an example of a Good Business Plan?
- How to Pay Yourself as a Business Owner Without Hurting Your Business
About Flourish In Growth
We help business owners navigate the ups and downs of building the business they want. Our rules are: Clear, simple, no-fluff, and actionable! Stop doubting yourself. Meet your small business map — The Guided Small Business Planner™. This is a workbook guide with step-by-step instructions for building a strong business foundation. It's your go-to instruction manual with clear instructions for creating a sustainable business. It's not a calendar. It's a guided workbook.
