After brainstorming over the weekend with his buddies, Todd decided it was time to start up a new business. He had a great idea for a new App to help consumers with their shopping agendas.
The only thing in his way? Very little money if any at all to kick it off. While this might be the case for many of you out there who want to start your own business or company, don’t let bad thoughts stand in your way.
According to Ryan Westwood who wrote an article on the very topic of “how to start a business with no money,” for Forbes, jumping into a new venture can often be a good idea even though you might be scared.
To begin, he suggests looking at what you’ve already got – i.e. resources – in a new light.
Maybe some help is staring you in the face and some you didn’t quite realize you had. For example, put on your thinking cap and start going through your contact files. Perhaps there is a friend who can donate some tech time, software, accounting. Do you have a friend in marketing, networking, or web development? Give them a call to see if they want to get on board and help your start-up.
Find Out About a Credit Line
Westwood also suggests getting a credit line; after all, it’s not uncommon for a start-up to rely on a line of credit. For example, some credit card companies may offer a 60-day term for payment rather than the usual 30-day term. Additionally, some banks or credit institutions offer credit designed to allow growth in the early stages of business. “A word of caution: To keep from getting bogged down in debt when you are trying to expand a business, keep purchases to a minimum,” Westwood adds.
Hunt for an Incubator
Another thing to consider, try using an Incubator. For instance, if you think your idea is solid and your business plan is ready to roll, think about a business incubator. Once accepted, incubator programs provide funding designed specifically to financially assist a start-up company, Westwood says. If you’re lucky, sometimes they even offer office space or other perks like shared admin services. Where does one find such a program? Many are sponsored by local or regional economic development organizations, and others are sponsored by colleges and universities. Check your local hometowns or where you went to school.
Accelerator, Another Option
You might also consider searching for an accelerator. Similar to incubators an accelerator is designed to also aid with funding. But, an accelerator expects a quick response to its investment. If you are all set to hit the market, this is an option to consider, Westwood says.
What about crowdfunding? Crowdfunding platforms have become increasing popular especially for start-ups whether it’s a tech business, producing a movie, or selling designer handbags. Try Kickstarter or other similar crowdfunding platforms that let the general public invest a small percentage of money in return for a future buy-in to your company.
Of course, Westwood adds that you should differentiate yourself from the rest of the crowd. Even small things make a big difference in the grand scheme of things.
After you obtain that $500,000 — or whatever you seek — in revenue, odds of funding increase greatly. Banks, for example, look at funding strictly from this perspective, Westwood says. “That’s because banks don’t really care about what kind of company you start—they look at your profit/loss statement and then make a decision.”
So, if you’re a profitable start-up or company with a good deal in revenue and a decent personal credit score, chances are better a bank will lend you up to $200,000, Westwood notes.
In the end, a great way to begin generating revenue for your business or start-up is to take the plunge and get down to work. Regardless of what others warn or tell you, there is no easy shortcut to profit, Westwood remarks. However, if you are confident about your product, or service, you can push your way all the way to the top to make your business a success that you will be proud of.