Starting a business with no money might seem like a daunting prospect but, with a little planning, it’s often perfectly feasible.
Learning how to start a business with no money is your first step on a journey to being your own boss.
With planning and a bit of luck, being short of cash shouldn’t be a barrier to business success.
In fact, learning how to start a business with no money can be a positive thing. It means you won’t dig into your savings and will have to be lean, creative and entrepreneurial.
Read on for everything you need to know about how to start a business without money. Here’s what’s covered in the article:
Can you start a business with no money?
Yes, it’s possible to launch a business without any money at all.
Assuming you have marketable skills and already own some equipment, you should be able to start generating an income.
Most startups require at least some money – but you don’t need vast amounts. Almost a quarter of Nigerian startups like online boutique and alike launch with less than ₦200,000.
If you have a job, you might want to set money aside and launch once you have a suitable buffer.
Choose a low-cost business model
If you don’t have ready access to cash, you’ll want to choose business model that doesn’t require much money to get started.
It usually costs far less to start a service business than a company that sells products since your income is generated by your skills and time rather than from physical items that you need to make, buy or store.
Low-cost service businesses include things like:
• Tutoring and training
• Writing and editing
• Graphic design
• Digital marketing.
Calculating your business costs
If you’re thinking about how to start a business with no money, it’s a good idea to calculate your expected costs. This will give you a savings target, so you have enough money to launch comfortably.
Typical startup costs include:
• Marketing and branding: Whether it’s printing fliers, building a website or using a designer to create a logo, you’ll need to spend money promoting your business.
• Registration fees: It’s free to register as a sole trader, while registering a limited company costs £12.
• Assets: This is all your equipment and inventory (if you hope to sell products). It’s things like your computer, office supplies, raw materials and more.
• Costs: This includes fixed or regularly costs involved in running your business such as office rental, staff salaries, subscriptions and website hosting.
• Professional services: This may involve services that you outsource, such as bookkeeping, patents and business insurance.
Draw up a list of all the possible costs your business might incur for the launch itself, as well as outgoings for an average month.
Try to be as realistic as possible here – it’s always better to overestimate costs than be surprised later on.
Minimise your outgoings
If you’re looking to start a business with no money in the Nigeria, it’s essential to keep you costs as low as possible.
Here are some simple steps you can take:
• Try to work from home: Starting a business from home with no money is much less expensive than renting an office, warehouse or shop. It also minimises your travel costs.
• Use free or cheap online services
There are plenty of free services online that can be used to cut costs. You can build a basic website for free with services such as WordPress or Wix and effectively market your business through the likes of Facebook or Instagram. You can also find people to do many tasks for you at a low rate through websites such as Fiverr and People Per Hour.
• Get free equipment
Most businesses require at least a computer to get running. You may already have one, but it’s often possible to find free equipment using websites such as FreeCycle.
You may also have a friend or relative who can loan you gear until you have enough money to buy your own. Otherwise, try to cut back on your personal spending when starting out. It might mean less fun for now, but it should pay off in the long run.
• Plan for cash flow
Did you know that the second most common cause of business failure is running out of money?
If customers don’t pay their bills on time, you won’t be able to pay yourself or your staff (if you have any) either and this is even more critical if you’re starting a business with no money.
The bitter truth is a business must have capital to start up no matter how little, thus It is always advisable to have a stable paying job (a part-time Job) if you want to start a business without any form of capital.
It’s that stable Job that will serve a stable form of cash inflow for whatever business you want to start.
Hold on, don’t just dump all your salary into your new business as capital, you have to split it. Half for Capital the other half for Investment.
• Find investment if it’s needed
Some types of business are simply impossible to start without any money. That may include businesses in the manufacturing, technology, construction, retail, or hospitality industries.
In this case, you might want to consider seeking out investment.
• Bank loans
You might be able to get a business loan from a bank, although this may be hard if you have no collateral at all.
• Government grants and loans
There is support from the government for government workers etc.
• Bank on Mum and Dad
Family and friends may be willing to provide you a loan free of charge, or for a share of your company. Most Nigerians shy away from this for unknown & weird reasons but if you’re lucky enough your parents supports your business, there is no harm in banking on them for some cash.
There are various crowdfunding websites – such as GoFundMe and Kickstarter – which allow people to either donate money or buy small shares in your idea if they like the sound of it.
• Angel investment
This is often associated with technology startups. A wealthy backer invests in your business in return for shares.