Saturday, May 14, 2016

How to Start a Business With (Almost) No Money

You’re excited to start a business. Maybe you have an idea, or you’re just fascinated with the idea of launching and growing your own enterprise. You’re willing to take some risks, like leaving your current job or going without personal revenue for a while. But there’s one logistical hurdle stopping you: You don’t have much money.

On the surface, this seems like a major problem, but a lack of personal capital shouldn’t stop you from pursuing your dreams. In fact, it’s entirely possible to start and grow a business with almost no personal financial investment whatsoever -- if you know what you’re doing.

Why a business needs money

First, let’s take a look at why a business needs money in the first place. There’s no uniform “startup” fee for building a business, so different businesses will have different needs. It’s important to first estimate how much you need before you start finding alternative methods to fund your company.
Consider the following uses:
  • Licenses and permits. Depending on your region, you may need special paperwork and registry to operate.
  • Supplies. Are you buying raw materials? Do you need computers and/or other devices?
  • Equipment. Do you need specialized machinery or software?
  • Office space. This is a huge expense, and you can't neglect things like Internet and utilities costs.
  • Associations, subscriptions, memberships. What publications and affiliations will you subsribe to every month?
  • Operating expenses. Dig into the nooks and crannies here, and don’t forget about marketing.
  • Legal fees. Are you consulting a lawyer throughout your business-development process?
  • Employees and contractors. If you can’t do it alone, you’ll need people on your payroll.
With that said, you have two main paths of starting a business with less money: lowering your costs or increasing your available capital from outside sources. You have three options here:

Option one: Reduce your needs

Your first option is to change your business model to demand fewer needs as listed above. For example, if you were planning on starting a company of personal trainers, you could reduce your “employee” expenses by being the sole employee at the start. Unless you need office space, you can work from home. You can even do your homework to find cheaper sources of supplies, or cut out entire product lines that are too expensive to produce at the outset.
There are a few expenses that you won’t be able to avoid, however. Licensing and legal fees will set you back even if you cut back on everything else. According to the SBA, many microbusinesses get started on less than $3,000, and home-based franchises can be started for as little as $1,000.

Option two: Bootstrap

Your second option invokes the idea of a “warmup” period for your business. Instead of going straight into full-fledged business mode, you’ll start with just the basics. You might launch a blog and one niche service, reducing your scope, your audience and your profit, in order to get a head-start. If you can start as a self-employed individual, you'll avoid some of the biggest initial costs (and enjoy a simpler tax situation, too).
Once you start realizing some revenue, you can invest in yourself, and build the business you imagined piece by piece, rather than all at once.

Option three: Outsource

Your third option is all about getting funding from outside sources. I’ve covered the world of startup funding in a number of different pieces, so I won’t get into much detail, but know there are dozens of potential ways to raise capital -- even if you don’t have much yourself. Here are just a few potential sources for you:
  • Friends and family. Don’t rule out the possibility of getting help from friends and family, even if you have to piece the capital together from multiple sources.
  • Angel investors. Angel investors are wealthy individuals who back business ideas early in their generation. They typically invest in exchange for partial ownership of the company, which is a sacrifice worth considering.
  • Venture capitalists. Venture capitalists are like angel investors, but are typically partnerships or organizations and tend to scout businesses that are already in existence.
  • Crowdfunding. It’s popular for a reason: with a good idea and enough work, you can attract funding for anything.
  • Government grants and loans. The Small Business Administration (and a number of state and local government agencies) exist solely to help small businesses grow. Many offer loans and grants to help you get started.
  • Bank loans. You can always open a line of credit with the bank if your credit is in good standing.
With one or more of these three options, you should be able to reduce your personal financial investment to almost nothing. You may have to make some other sacrifices, such as starting small, accommodating partners or taking on debt, but if you believe in your business idea, none of these losses should stand in your way. Capital is a major hurdle to overcome, but make no mistake -- it can be overcome. 

5 Online Marketing Strategies for a Tight Budget

In a world where attention is currency, it's becoming increasingly more difficult to attract the eyes and ears of your target market. Not only are you up against larger companies with nicely funded marketing departments, you're also competing with social media and a multitude of other distractions for the attention of your prospects.
But that doesn't mean your marketing efforts have to cost a ton of money or be overly dramatic in order to stand out from the crowd. Here are five creative and inexpensive ways to market your business in a digital world:
1. Get endorsed by a local celebrity.
Many business owners dream of having their product or service endorsed by a global celebrity. But instead of trying to get a superstar to support your business, try seeking out a local celebrity instead.
Who exactly are local celebrities? These are people your local paper is writing about -- perhaps an "unsung hero" such as a teacher or a resident who's doing something positive and newsworthy. Since they're in your neighborhood, these people should be relatively easy to locate and contact by phone or e-mail. Let them know you'd like to send them a gift, namely your product or service.
The only catch: you'd like to follow up with them in a few days to get their honest feedback. Their responses can make for useful blog or marketing content.

2. Create a LinkedIn group.
Not only is a LinkedIn group free to create, it can enable you to offer your professional network a vibrant, useful information resource all while driving traffic to your site and increasing sales. Just don't use the platform to hard sell anyone.
It can take time and effort to get one going, but the goal should be to help provide resources and start discussions on topics that can benefit your community. Groups should also be a place for your members to network with other professionals online.
3. Get published on niche blogs.
While it may be difficult to get on the front cover of a major magazine, you can create marketing strategies and opportunities by being featured in a popular niche blog. Identify three to five blogs that target your market then contact the creator and offer a few ideas of how you'd like to bring value to his or her readers. You can:
  • Demonstrate good will by offering the niche blog owner a small amount of your product or service for free, which they can give away to their audience as a gift. This is different than a product review, which only offers information. 
  • Send ideas for blog posts you'd like to write and explain why they would be helpful for their readers.
  • Ask if you can interview them for your site. This might entice the blog manager to promote your content since it highlights his or her business.
4. Create videos for YouTube.
With more than 800 million unique visitors a month, YouTube can be a powerful platform for marketing a business online. To do so, go beyond simply posting random videos of your product or sharing your thoughts.

The marketing videos you create should include the following elements:
  • A keyword-researched headline
  • A clear editorial message (don't try to accomplish too much in one video)
  • A call to action (tell the viewer to do something, such as subscribing to your channel)
While you can spend a small fortune on cameras, lighting equipment and editing software, the camera built into your smartphone should be able to capture suitable online video. As for editing, if you're on a Mac, for instance, you should already have iMovie in your applications. Even if you don't have a Mac you can find free software online or hire a professional editor on sites such as, possibly for as little as $5 depending on the scope of the work.
5. Write an e-book about the biggest issues in your industry.
No longer do you need a publishing company or thousands of dollars to get distribution for a book. Amazon, for instance, will let you upload a digital book for free, with a 33 percent take on every sale. The goal is not to make a profit from direct book sales but to use it as a lead generation tool, encouraging readers to opt into your website for further information.
Even time-strapped entrepreneurs who aren't great writers should consider this. You can search sites like E-lance or Odesk to hire an affordable ghostwriter who can help you convert your blog posts or audio recordings into book format.
When it comes to marketing your book, set the price between $1 and $5 -- which makes it affordable -- then use social media, video marketing and e-mail list marketing to promote it. To generate more leads, keep in mind that Amazon allows prospective buyers of your book to take a sneak peek of the first few pages. Be sure to embed links into these early pages so you can capture leads from people who were interested but didn't wind up buying your book.