How To Start A Business When You’re Broke
In a few days you might be thinking of your New Year's resolutions.
Each day millions of great business ideas are never started because the person with the great idea thinks they have no money. This is flawed thinking.
It’s not that you have no money, it’s the fact that you don’t know you have something of value to people who do have money.
I’m not talking about “angel investors” or “venture capitalists.” I’m talking about sources of money that are available to anyone with a good idea.
How Good Is Your Idea?
Was the Hula Hoop or Pet Rock a good idea? Would you have sunk a bundle into either one? I’m just pointing out that explaining your idea and how it’s going to be popular might not be as easy as it sounds.
Your first job is to find out if you actually have a feasible idea. Will it sell enough to pay all expenses and still produce a living income?
Here’s a very detailed outline of how to do a feasibility study.
Sources of Income
You’re broke so we’ve got to come up with some creative ways of getting others to finance your venture. Here are some popular ways.
- Crowdfunding: consists of an “idea person,” (you), individuals who believe in and support the idea, and a platform to bring these two together. Usually the platform for the idea is presented on social media such as Facebook, Twitter or LinkedIn, requesting people interested in investing or working on the idea to contact someone. In 2013, the crowdfunding industry grew to over $5.1 billion.
- Share Equity: Many of those who first worked for Facebook were promised stock in lieu of monetary payment. Many became overnight millionaires when the business took off. Sometimes you can trade for the expertise you need by offering future benefits.
- Alert The Media: When I wrote my first small town business book, the Chronicle put me on the cover of "Business to Business." Let media know what you are doing and your idea for the future of your startup company. Being in print adds credibility to your idea and attracts interest.
- Get Free Advice: There are many sources of free advice and help with your business plan and obtaining financing for your great idea. Do an online search for “Small Business Development Centers.” They are pre-paid with your tax dollars and can give you business loan advice. Also see http://www.score.org for business mentors and business plan assistance.
Some Final Thoughts
The more you study your idea and discover costs and methods for success the more your dream comes alive. This makes it easier to construct your business plan and present your idea and why it will succeed for a loan or to an investor.
Never let the thought of being broke sway you from your future. If you do you will always look back and wonder “what if?”
If you don’t live your dream you’ll end up building a dream for someone else. Comments below.