Starting a Business with No Money: 7 Simple Steps to Success

How to start a small business with no money

You’re likely still asking yourself, “So how can I start my business with no money?” Work through this seven-step process to go from idea to full-fledged business with little to no funding.

1. Identify your business idea

The foundation of a business is based on strong small business ideas. It’s only natural that identifying your business idea is the first milestone in your entrepreneurial journey. Start by brainstorming and writing down your potential options. Pay attention to how you can be of service by offering a solution.

Analyze the ideas you have. How passionate are you about them? What talents do you have? Would your skillset make it successful?

Is there anything your family, friends, or colleagues say you’re good at or come to you when facing a particular problem? Narrow down to the one that stands out and catches your interest.

Below are some pointers that can help you find your business idea:

• Examine your marketable skills or experience that can be turned into a business.
• Analyze existing businesses’ unmet customer needs so that you can fill in the gap.
• Is there a product/service that you wish existed?
• Look for ways to add value to existing products/services
• Look at existing products and services and think about how to improve or add value to them
• Investigate other markets to see whether your products/services are much needed there.
• Perhaps you saw a product/service somewhere else, and it’s not available locally.

2. Conduct market research

Understanding the market is invaluable in determining your business idea’s potential in the real world. So, once you have an idea, start conducting thorough market research on the industry your business idea aligns with. This will give you an idea of the overall market landscape and how your business might perform.

Identify your potential competitors and what they are up to. Your main aim is to determine whether you have a more innovative, better, and cost-effective way of doing things. By studying your competition, you’ll find out whose business idea has holes. You can also figure out a unique selling point.

In addition, research your potential customers. Understand their occupations, ages, education levels, and locations. Study their current buying habits and whether they’re willing to pay more for better quality products/services.

You can go through online reviews of similar types of businesses. Also, conduct a poll survey through social media groups. Post a questionnaire in the groups your potential customers have joined.

Talking directly to potential customers can shed light on areas where their needs aren’t fulfilled. The information you gather will help you understand the target customers’ types of purchasing habits, needs, and preferences.

3. Create an MVP and test your idea

Whether you’re selling a product or service, testing the idea with no cost or the least cost possible is advisable. A minimum viable product (MVP) is a new product with core features to test its viability in the market. The purpose of an MVP is to see the early customers’ experience with the product and use the feedback in further developments.

One way can be conducting a crowdfunding campaign. If they’re interested in investing after using the product/service, then that’s a good indication that the business idea is worth pursuing. Even if you don’t get the funding, their feedback will guide you on which areas to improve.

Tap into the power of social media. You can create a post, page, or short video about your product/service, share it on social platforms, and see how many people are interested. Their interaction, such as preorders, comments, views, shares, or reactions, will indicate something about your idea.

You can create a website for your product/service and check website metrics. Use low-cost or free websites and web analytics tools available. Include an option for email signups/preorders for more information to gauge their interest. Some of the basic metrics are session duration, traffic source, number of visitors, average time on the page, etc.

You can also do it the old-fashioned way and offer your services in your neighborhood for free. Inform them about your business and ask for their honest review of your performance.

Keep in mind that your intention is to determine whether the idea is viable or not. If things don’t go as you had hoped, take the feedback as a step closer to your dream. Use it to reflect on what areas to improve on or if the idea isn’t worth pursuing at that time.

4. Develop a plan

You’ve learned a lot about what you’re getting into at this stage. Based on the information you’ve gathered, it’s time to outline your business’s current and future goals. You need to have a business plan to organize the direction of your business.

If you don’t know how to write a business plan, use this free online template. Bear in mind that it will be your resource in starting the business. So make sure it’s a short and actionable plan. However, include your statement of business operation, product/service description, and market analysis.

A good business plan also helps you set short-term and long-term goals as well as eventual startup costs. It will be a roadmap on your next steps, keeping expenses low, and whether to invest more capital or pursue funding.

5. Set up a payment method

Be ready to receive payments any time an opportunity arises. You don’t want someone to agree on buying your product/service and the chance passes you by or is delayed as you figure out how they should pay you. So, set up how you’ll receive payment before becoming operational.

When deciding which methods to use, compare their price, features, flexibility, security, and functionality. The best fit for your business depends on several factors such as the size of your transactions, popularity, customers’ preference, and age, among others.

Cash payment is the fastest, easiest, cheapest, and most widely used method. It can work well with minors as well as adults. In the case of an online business, cash payment can only work in pay on delivery setup.

However, it comes with cons such as theft and cash mismanagement. Also, you can’t rely on the cash-only method at this age. There is a higher chance of inconveniencing your customers. It’d be better to combine two or more methods depending on the size and nature of your business.

Online payments work very well for online businesses. Debit and credit cards are ideal for in-person and online payments. Mobile payments have become very popular and widely used. Payment through checks is also another option.

Just keep your customers in mind. The younger generation might not have cash or checks. If your clientele skews a bit older, they may be unsure about modern fintech payments.

6. Focus on organic communication

Another critical aspect of starting a business with no money is spreading the word about your product/service to your customers. You obviously don’t want to invest a ridiculous amount of money in your marketing efforts. So, it’s best to focus on organic options as part of your initial marketing strategy.

Create a website

Launch a business’s website and utilize free SEO tools to research invaluable keywords in the industry. Use your results to create optimized product/services, about us, FAQs, and contact/sales pages. For instance, putting your physical address on the contact page is a good way to rank in search engine results when someone conducts a regional search.

Make sure your website has a blog section where you publish optimized content regularly. Take advantage of free content marketing courses to hone your skills. Similarly, free digital marketing courses can teach you which method works depending on the business.

Tap into social media

Social media has become part of our daily lives. Create social media pages that favor the nature of your business. For example, Instagram is a better tool than LinkedIn for clothes designers since it’s suitable for sharing photos.

Use social media posts to drive traffic to your website or online shop. Respond to the comments written by your customers and also participate in social groups or forums. This is a great way to start building an audience and engagement naturally. Just keep in mind, that it will take time and effort to maintain.

7. Explore funding options

If your business reaches the point where you need funding or extra capital for growth, it’s time to explore your funding options. If you have enough savings, you can inject that into your business. However, if that’s not the case, consider other funding options.

The most traditional and obvious option for small business owners is to apply for a bank loan. However, it’s also worth exploring grants from federal, state, or regional agencies. There may even be private grant options from larger organizations. These are typically grant programs that cater to specific demographics such as minorities, veterans, etc.

Not interested in traditional funding? Leverage crowdfunding sites to raise funds in exchange for the product/service, debt, or the purchase of small shares in the idea. The ideal stage for crowdfunding can be the testing phase.

Friends and family are a common source of financing too. However, be professional and agree on a payment plan to avoid ruining your relationship.

If you’re in more of a startup environment, angel investors and venture capitalists may be your best option. These are primarily used by businesses looking for quick funding in exchange for ownership equity, royalty payment, or convertible debt.

From starting to growing your business

The amount of starting capital doesn’t determine the success of a business idea. In the initial stages of executing your business idea, it’s best to stay lean and avoid unnecessary expenses. However, as the business grows, there comes a point where that can’t be done anymore.

Planning for such occurrences is beneficial to ensure your idea doesn’t grow due to the lack of funds. If you’re willing to do the right thing to ensure your business runs smoothly, you’re on the right track. So, if you’re deadset on starting a business with no money, check out our startup guide for a more detailed step-by-step method to start a business.