Learn How to Start a Business With No Money
A lot of entrepreneurs get caught up in the old cliche that you need money to make money. Thanks to the "lean startup" paradigm, much of that "conventional wisdom" has been turned on its head. You can start a viable business with little or no money. Even if you want to open a cupcake store or build an ambitious startup, there are ways of getting your business off the ground for little or no cash. Here are four of our favorite tactics
Invest Your Profits
David Osorio, the founder of CrossFit South Brooklyn, decided that he'd build his business brick by brick by investing his own profits:
"When I wanted to start CFSBK, it didn’t seem like the smartest approach to find partners, take out a huge loan, and rent some ludicrously overpriced real estate in Brooklyn in order to start a gym based around a niche training concept that no one had heard of," Osorio writes in a post on his blog. "My entire "financial plan" was to simply work to my best abilities within the resources I had and to never spend a single dollar I didn't already have available. My rule was that if I didn't have the funds to obtain something I needed, I would have to work harder with what I did have until I was able to afford it."
Be Creative with Cheap Marketing
Orabrush is a great example of a bootstrapped startup: An elderly inventor crafts a tongue-scraping device meant to combat bad breath but has no luck in marketing it, and then he tries mightily to market it via infomercial and direct to retail with no luck.
Then he visits a marketing class and pitches his concept. While the plucky inventor's tale sails over the head of most of the student, one person in the room has a brainstorm: how about if they use YouTube to brand the quirky project?
What followed was a video that cost only $500, but it introduced a funny spokesman who helped Orabrush sell more than a million tongue cleaners to people in 40+ countries in two years.
The Orabrush story is like a textbook for overcoming the long odds of getting noticed as a small business in a crowded space, the Internet. The company is constantly making new content in order to market their offering.
Create a Minimum Viable Product
Firat Parlak, the Chief Entrepreneurial Officer and driving force behind the design and development firm Awesome, advises his early stage clients to work lean and focus on developing a "minimum viable product:
"We had a client project that got into the highly prestigious and extremely competitive tech accelerator TechStars. While the client had a long list of product functionalities they wanted to include, during the UX/wire-framing stage of planning out the project, we steered the client toward making a "minimum viable product" or MVP that was more closely aligned with providing a solution for users. So, with our collaboration and suggestion, he was able to present an iPhone app that was easy to use and easy to understand and this helped him get into the program."
Salt of the Earth Bakery makes an incredibly delicious line of baked goods including their flagship offering "The Cookie," as well as a range of gooey brownies and other confections brushed with a tinge of high quality, artisanal salt.
Co-founder Haskel Rabbani explains that the secret of the company's success rests with a bold move his wife made: "She walked down to the Whole Foods one day and asked them if they would carry her cookie and they said yes."
Since then, the growing cookie company has attained a lot of positive press from the likes of Elle magazine and Serious Eats, especially as the "salty and sweet" trend dominates Pinterest and other popular social media channels. But for Rabbani, the product's formulation isn't about chasing trends. "We just add what we need to make the product perfect," he says.
The lesson for entrepreneurs is clear: try and identify potential partners before you launch. If you are launching a pet foods product, for instance, what sort of retail locations will you want to align yourself with? The same is true for service businesses. Is there a company out there that might value your service as an add-on? Partnerships will be valuable as you try and grow your business.