Search SMBresource

The honest truth, how to start a business with no money.

"No Money" is a relative term, you'll need to eat.

But starting a business without any money is in fact, achievable. There are limits to what you can do of course. You don't be able to start a manufacturing company, or retail store without any money. But surprisingly, you may be able to start a restaurant. And you can certainly start a service business, where you are the only employee.

First, a case study.
When I was younger a couple of my friends started a restaurant with essentially, no money. The restaurant sold only pizza, and was either pick up, or delivery. The location was the first hurdle. They found an older building that had been abandoned for a few years. They contacted the owner and told him they wanted to start a business, but they had no money. The building needed a thorough cleaning and painting. They offered to do it for him if we would buy the materials, and let them lease the building free of charge for the first three months, while they got on their feet. The landlord agreed. While they were painting the building they had to continue to work to feed themselves and pay for gas, housing etc. One decided to go to work in a pizza parlour to learn the business. The other continued with his job, which paid only slighlty better. Between the two of them they saved a little more than $200 in just a couple of weeks. This time was not wasted as they were painting and cleaning their new restaurant. With the $200 they found someone who had developed his own pizza sauce recipe, and agreed to make them several large batches, free of charge again, until they got on their feet. With the $200 they found a pizza restaurant that had gone bust about two hundred miles away. They borrowed a truck and went to see the owner. He sold them his ovens for $75. It was only two small ovens, but they could make four pizzas at a time. With a few extra dollars (less than $500) they were able to get a telephone installed, print out a bunch of fliers, and buy some dough, chesse and toppings to get started. Because this is a cash business, they were making money the first night, and eventually they were generating over $10,000 a month in revenue with very little cost.

Now the real world.
The pizza restaurant idea of starting a business with no money worked because hard work met opportunity. But the bottom line is, they actually had some money, and you will need a few hundred dollars. Even if you are going to start a business cutting grass, you need a lawn mower and gasoline, plus transportation if you're going to work outside of your own neighborhood. There are a few common charecteristics of businesses you can start with little or no money.

Service business are the best option because you generally need very little in the way of overhead.
The business should be built around something you actually enjoy doing.
Be prepared to barter and trade for the things you need to get started.
If you have even a mild credit rating, you can get a credit card to buy things you absolutely need.
Low skill businesses are easier to grow initially, because you can find employees at a lower cost.
A business that can grow with marketing, as opposed to sales will work better. If you have to go door to door to businesses to arrange meetings, it takes much longer and much more effort to get the deal. As opposed to hanging a flier with tear off tabs at the local grocery story.

There is a huge difference between starting a business, and working for yourself.
If you want to truly suceed you'll need to expand your business by hiring employees and always going after new customers. This is partuclarly difficult for those who have started out essentially broke. When the money starts rolling in, it is to tempting to keep it for yourself, instead of directing it back in to the business. If you make this mistake, a rough patch is impossible to get over. Let's say you start a computer repair business, because you're having trouble finding a job, or your sick of working for someone else. After a few months you land a contract at a medium sized company, and you're working their forty hours a week. What happens to your existing customers? This is the perfect opportunity to expand. It isn't easy, but you're going to have to find another free lance technicians you can rely on to handle the work while you're not around. And every free minute you get, you need to follow up with those customers, and fix the things that didn't get fixed.

The summary:
If you've made it through the phone and resume' process, the interview is always the hiring lynchpin for executives. For technical people, or other employees where skills and experience are key, the interview is generally just a validation process. For an executive, the interview is the decision making process..

The John Galt approach to business.

Managing difficult People