You have a brilliant idea to start a business, right?
Now you just have to figure out how to start a business. It can be even more challenging to start a business with no money. Fortunately, we live in a time when the cost to start a business is lower than ever.
The average micro-business takes only $3000 to start. That’s pretty remarkable considering that you’re starting a full-fledged business. There’s no excuse not to start a business.
Read on to learn how to start a business from scratch, even when you don’t have the cash to start it.
Your Business Idea
Everything in business starts with a moment. There’s a moment when an idea strikes and you suddenly feel like that’s what you’re meant to do.
You just want to write it down and get started on it as soon as possible. In all of that initial excitement, you have to pull the reigns in a little bit. You have to make sure that your idea can really be the foundation of a solid business.
Once you get the idea of the business down, you want to answer a few preliminary questions.
The first question is what does your business do? With the second question, you need to know who your business serves. The third question needs to convey why your business is different than the other businesses out there.
Validate Your idea
Once you have that initial concept of a business down, you’ll need to validate your idea. This goes beyond asking friends and family if it’s a good idea or not.
One of the top reasons why so many startups fail is that they are selling products that no one wants to buy. You want to avoid that same fate.
You want to be as sure as possible that you have a viable business idea on your hands. You might look at Google Trends and see that interest in your product or service has increased over the past 12-18 months.
The best way to validate your idea is to survey potential customers. That would give you an idea as to whether or not they’d buy it, how much they’d buy it for, and what they’re really looking for to help themselves.
The Business Plan
Assuming that you have a viable business, you need to create a business plan. Businesses that have a plan are more likely to be successful than ones that don’t.
You’re also going to need a business plan if you want to get any type of funding for your business. Aside from friends and family, no one is going to give you money to start your business because you have a great idea.
You have to prove that your business is worthy of investment and you’re able to pay off the loan or the investor will see a return.
That’s what the business plan does. It demonstrates your knowledge of the industry, your target market, the competition and the likelihood that you’re going to be profitable.
The Financials of Your Business
A major part of the business plan is the financials. Spreadsheets might bore you to death, but if you’re looking to fun your business, you need to know your financials.
The main projections you want to have spreadsheets for are your startup expenses, your monthly P&L statements, and your financial projections for the first 5 years.
At this stage, the most important spreadsheet is the one for your startup costs. You want to list every single expense for your business, from office furniture to online business tools.
Take your time putting these projections. You might need to do more research on different products and tools that you’re going to need to make your business run.
How to Finance Your Business
How can you learn how to start a business from scratch with limited cash? You have to know that financing your business will depend on a couple of things. The type of business you have, the amount of startup costs, and the point where you see the business becoming profitable.
An example would be starting a business from home. You project that it will take about $2500 to start the business. You then think that it will turn a profit in the 9th month of business.
Not only will you need capital to start up your business, but you’ll also need to make sure you have enough cash flow to become profitable.
You can then decide how you want to finance the business. You can go to your local bank or credit union for a small business loan or you can use an online lender for a personal loan. You can ask friends and family, launch a Kickstarter, or work part-time to fund the business yourself.
Think Outside the Financing Box
You can get very creative in financing your business. You don’t have to go the traditional route of getting a small business loan from a bank or get investors to back your idea.
If you belong to an ethnic or minority group, there are grants and loans that are designed to boost entrepreneurship in typically underserved communities.
For example, World Business Lenders has made it easier for Hispanic owned businesses in New Jersey to access startup capital.
It can be challenging to find such grants or loans in your area. A good place to start is with your local Chamber of Commerce or Small Business Administration office. They’re usually aware of ways you can start your business with little to no cash available.
How to Start a Business from Scratch
Starting a business can give you such a sense of accomplishment and pride unlike anything else you’ve done in your life.
It’s not easy to learn how to start a business from scratch with little funds. Fortunately, it doesn’t cost that much to start a business and access to capital is easier than ever before.
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