This article contains some of our most important principles for starting a business with no money.
Whether you’ve got thousands in the bank or you have nothing, you must read this article before starting!
If you’re thinking about getting a loan to start, then;
1. Don’t.
2. Complete a Rebel Course.
3. Still Don’t.
If by the end of this article you still think you need money then call our co-founder Alan. If anyone can convince you to start a business with no money, he can.
Business has changed. Even since we started the Rebel Business School in 2011. The conversations we’re having now are completely different from the ones we had in the beginning. In case you need some proof:
- Who is the world’s biggest retailer? – Alibaba and they don’t own any physical shops.
- One of the biggest media companies? – Facebook and then don’t produce any content.
- The world’s largest accommodation provider? – Airbnb and they don’t own any property
- The world’s largest taxi company? – Uber and they don’t own any taxis.
Can you see the trend?
This is why: Business is about having money not owing money.
When is the WORST POSSIBLE time to have debt when you’re running a business?
In the beginning, when you have no customers, and it will take you 9 times longer than you think to get one.
You don’t need a business plan to start a business, you don’t need money and you definitely don’t want to be starting a business in debt. What you need is hope, confidence, and a customer.
How do you start for free?
Here’s the traditional approach that society teaches:
- Make a list of everything you need to start your business
- Write your estimated cost next to each item, then add everything up
- Double it
- That’s the amount of money you need to borrow
- Put this in a business plan (Once you’ve spent weeks writing one)
- Present to the bank
- Get money (If you’re lucky)
- Go into debt
- Spend money
- Maybe make money in year 2 (if you’ve not already closed by then)
Can you wait two years to make a profit? Do you want to go into debt?
You don’t need to spend that money at all; you can easily start a business with no money.
When you’re starting out, good enough is good enough. It doesn’t have to be perfect.
Perfection will kill your business before you start.
Perfection costs money and you don’t need to spend money to get going. We meet so many people who have wasted thousands on starting their business.
Nine times out of ten, here’s what happens:
Most people, after six months, realise they got stuff wrong. The business name, what they’re selling, how they’re selling it. Imagine you’ve just spent £10K on setting-up, only to realise you got everything wrong!
The bootstrapped business is the one most likely to survive. Why? Because you’ve built your entrepreneurial muscle through figuring out how to start for free and you’ve engaged yourself in your own business. This process is critical, don’t skip it.
This is the secret to falling in love with your business and not being seduced by it.
Idea generation is just dating your business. The real love comes when you start creating your future together and dealing with some challenges along the way.
How to Bootstrap Your Business
1. Get stuff for free
Google this: How do I get (enter what you’re looking for) for free?
You’ll be amazed at the results that come up. People advertise free stuff on sites like Facebook Marketplace and Freecycle. You can get business cards for free (usually + shipping), flyers for free plus lots more! One of our favourite free resources is web builders like Canva, Wix and Square. You can build a website for free and start selling straight away. Alan built a free website and took tens of thousands of pounds through it without spending a penny on web development.
2. Borrow
Borrow space, borrow equipment, borrow a restaurant, borrow a kitchen, borrow people, borrow whatever you can. We had a songwriter attend a workshop in Nottingham, UK who was about to spend two thousand on recording equipment until we pointed out that her local university had several BRAND NEW recording studios at 40% occupancy that she could borrow – not only that, the university would even throw in a team of sound engineers, producers, and a technician! Why? Because the students usually need real-world experience to pass their course!
There are resources lying all around you that are underutilised. Get creative and borrow what you need.
Want to find out how to borrow a restaurant? Come on one of our courses.
3. Barter
It’s how co-founder Alan got some branding and marketing done for free in the early days of his first business. He trained the staff of a marketing agency, and they helped him with marketing in exchange. Co-founder Simon secured some accountancy services for free for three years in exchange for building a website.
What skills, time, products or service could you swap so you can get what you need for free? Find someone who has what you need and swap what you have for it. You have incredible skills that other people need. Swap them for what you need to get going.
4. Sell stuff you don’t need
Joanna runs a mobile beautician business and when we first met her she needed a portable treatment table but couldn’t afford the £120 cost. The money for this had to come out of her bills fund and the risks felt too great for her!
“If I buy this table and don’t get enough customers in the same month, I won’t have enough cash to cover my bills!“
With a nudge from us, she sold the running machine that was gathering dust in her spare room (like many home exercise machines it was being used as a clothes horse) and was able to get the treatment table to get going.
This is why this really makes sense. We are psychologically tied to the money we need to survive – and rightly so. Selling some of your unwanted stuff creates a ‘start-up slush fund.’
By the way, this is smarter than blowing your savings AND MUCH SMARTER than starting a business in debt! We all have unused stuff lying around in our house. Sell it and use the cash to get going.
5. Sell your value before you create it
This is the most important of all and a foundational principle of the Rebel Business School. This is about getting paid in advance for your product or service so you can use your customer’s cash to get started.
At this point, lots of you would be thinking ‘Yes, but that wouldn’t work with my business.’
You can make this work with ANY kind of business, you just have to think differently about how you make it happen and your customers have to TRUST that you’ll deliver on your promises.
Fiona spent nearly 18 months writing a training course only to discover that no one wanted to buy it. Pitch the ideas for the course first, then you can shape the course based on the feedback you get from the market. Then ask your customers to pay upfront (you might have to incentivise them with a discount). We pitched the first Rebel Business School free start-up event in March, got paid in April, wrote it in September, and delivered it in October.
You could also try Kickstarter or Indiegogo and create a business funding page – your customers pledge money in exchange for your products and you get the cash when you hit your target. This is also a great way to test the market and your idea.
When does Amazon want payment for their products? Imagine going to the supermarket, loading your basket with food, and going straight home to eat it all, only returning the following week to pay! Can you imagine Walmart or Tesco standing for that? Of course not!
Small businesses are saddled with a debilitating notion that we have to deliver before we get paid. The pop-up restaurant that got their customers to pay for their meals in advance and used their customer’s money to buy the ingredients got this spot-on!
The very first person to make a profit at the Rebel Business School was Dennis. He took orders for the lunch break of one of our courses and convinced everyone to pay in advance for their lasagne. When he left the room with £88 in his pocket we weren’t sure if we’d see him again but luckily he returned with trays of pasta and salad.
Figure out a way to sell your product or service before you build it.
The only real way to know if your business is going to be successful or not is to make a sale.
Now is the time to attack your list. Strengthen your entrepreneurial muscle. What can you bootstrap?
Go through your list of what you need to start your business and see what you can get for free, borrow, barter, sell or show your value before you create.
You absolutely can start a business with no money by following these principles
