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 theseveral
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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