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How to Start a Business with No Money

starting small business without money

starting small business without money

If you’re thinking of starting your own business, the first thing you should know is that it’s likely to be the hardest thing you’ve ever done.  Yes, there are many incredible stories of ordinary people changing their lives for the better. Still, there are many more people who have lost money and jeopardized their family’s welfare on business ventures that failed.  In light of this, having to start your business with no money, or to use industry-speak, “bootstrap,” is not a bad thing.  It will force you to focus on what’s most important, which is to quickly create a viable offering.

Don’t quit your day job

You’re going to need money to pay the bills while you get off the ground, and having an alternative income will allow you time to finetune your product or service.  When you look for funding for your business, your personal credit score will be something lenders take into account.  Protect it – or loaning money will be more expensive than necessary.

Do your homework

You can do much preliminary work from the comfort of your home with access to the internet.  Be sure you have the following covered:

  • What are you selling? Can you tell someone enough about your offering in a three-minute elevator ride to get them interested in buying?
  • What is the primary benefit of your product/service? What problem does it solve, or what need does it meet?
  • Who will buy from you? How and where will you find them?
  • Who else provides something similar, and why should people buy from you?
  • Have you decided on pricing, and how does your price compare to the market?
  • What objections will there be to your offering, and how are you going to counteract them?

Run a trial

Don’t get caught in analysis paralysis – some things you can only learn by doing.  Again, the internet has made things easy:

  • To access customers – list your products on existing platforms like Amazon, eBay, and Etsy. There are also many service-oriented mobile applications where you can list locally.  You may need to pay a minimal joining fee, but otherwise, you will only pay a percentage of your selling price when people purchase.  You could create a website with one of the many free or inexpensive products on offer.  But don’t underestimate the time this could take and the negative impression created by an amateur-looking site.
  • To collect payment – consider opening a PayPal account or similar, where people can pay you just using your email address.
  • To invoice clients – you’ll find many free invoicing applications online that will serve the purpose in the short-term.


Be disciplined about learning from your trial.  What assumptions from step 2 above, turned out to be accurate, and what needs tweaking?  Being honest with yourself at this stage will save you pain down the line.  Be careful of relying too much on feedback from friends and family – people who love you will tell you what you want to hear.  Also, be careful of giving away freebies – customers are only customers if they’re paying you.  People will have a very different take on a product or service if they are paying for it.

 Keep records

Keep records of sales and expenses.  You will need them for tax purposes, and to provide potential lenders with history if you ever look for funding.  Keep it simple and keep it up – even if the numbers scare you.

Get money

Yes, a little atleast, you knew that was coming, didn’t you… Once you’re sure you have a viable offering, you will probably need to get funding to further your idea.  Traditional lenders, like banks, will typically require a minimum of two years of business history and proven revenue streams.

Many small business owners land up relying on their personal savings and loans from family members or friends.  Before resorting to these, consider the following:

  • Online lenders – interest rates will be higher than traditional lenders, but their requirements less onerous, and many have exclusive deals for start-ups.
  • Crowdfunding platforms – are also a great way to market your business and to network. Funding solutions can be very innovative and don’t always involve repaying loans or giving away equity.
  • Grant funding – check what government or institutional funds may be available to support your kind of business.

Build an accountability framework

Last but not least, try to ensure that you are aligned with someone, or something, that holds you accountable.  Building a business is hard – sometimes you need encouragement to persevere, and sometimes you need help knowing when to stop.

Entrepreneurs who have an “accountability framework” are more likely to succeed than those that try “go it alone.”  An accountability partner could be a lender or a business partner who sees things differently to you.  Try working with a business coach, or consider joining an entrepreneur’s support organization, or business incubator.

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