How to become an entrepreneur with no money
The age old question, how to become an entrepreneur and ‘start a startup’ with no money. Succeeding in a startup is difficult in normal scenarios, but without the financial resources you will have to play smart, different and hard to take yourself to success. Needless to say, there are no guarantees in this game and the road will not be easy.
First of all, when you say “no money” – be very very sure that you have gauged the situation accurately. Too often, people are reluctant to take any risks and self-validate it by thinking that they don’t have the money to do anything. Well, this only means that you don’t have any confidence in your idea and if this is the case, then chances are little that anyone will else will put money where even you can’t.
Risk is a part of startups – you will have to embrace it, whether you like it or not.
Plenty of entrepreneurs have spent months eating cheap food and sleeping on couches while working on their startup. But it is quite possible that your “no money situation” = “have money for other things but not for investing on my own idea”. And if this is the situation, this article will not be of much use since you will have to first introspect what you really want.
Either way, chances are that however much money you have – the startup will require a little bit more. So you must learn to stretch a dollar as much as possible. Here are some strategies to do the same:
1. Don’t leave your day job
Most of the aspiring entrepreneurs, once they have the idea in mind, can’t wait to put in their papers and start tomorrow. Each extra day working in the 9-5 job is a drag.
However, if you’re in a position that you have searched on ‘how to become an entrepreneur with no money’ then this is the number one rule for you – do not leave your day job until either your start-up gains enough traction to generate sustainable revenue or it gains enough/ significant attention from people who could fund you. Yes, this could mean that you might be slightly delayed in achieving your dreams however you are choosing a much more stable path with a much higher chance of attaining success.
Always remember that the default state of a start-up is failure. And you will get unforeseen expenses regardless of how sophisticated your Excel spreadsheet might look. Customers will take time to come, there would be returns & exchanges, suppliers would randomly demand more money, partners would randomly delay your money and so on and so forth. You do not need another money problem on your head. Hence make sure that before leaving your day job you have at least some months of sustainable capital in your bank account which will allow you to focus on your start-up.
2. Invest in hours if not money
Ever heard of that saying, “time is money”. Well in your case this is the absolute truth. A business requires money to become successful. However you just might be able to barter that requirement with your time. Forget about hobbies. recreation and all other stuff. You will have to work insanely hard.
If you come home from office at at 8 PM, then you will have to work till two in the night. If you get only five hours to sleep then so be it. Today, when everybody wants to do a start-up, the competition is insanely high. People are working hard, and they’re working smart. Plus they have the resources and money power to speed up the entire process. The best you can do is to beat them by working more than they can/ want. In a nutshell, if you want to become an entrepreneur with no money then you must be the entrepreneur who has 30 hours in his day.
3. Launch before you are ready
Prepare to do everything before it reaches perfection. What does this mean? This means that you would have to launch before you think you are ready. You have to learn & improve while you’re working. In a perfect world, before launching you would have the perfect website, the perfect mobile app, the perfect partners and so on and so forth. In your case, you would be launching when everything is less than perfect. You would have to iterate while you’re in the market.
This also means that you would have to develop a tough skin because the market is & will be brutal. They don’t want to listen (or care) that you did all this without resources, the reviews would be just as sharp as for anyone else. However you must keep on persevering, moving forward and iterating to develop user and customer satisfaction.
4. Need as little capital as possible
Carefully assess whether your idea can be made less capital intensive. A simple example: an e-commerce site can behave in two major ways – either it would keep its own inventory (which would require a lot of capital but also ensure control on availability) or it could operate a model such as a marketplace/drop shipping or similar where the material does not change hands until the sale is made. Of course this is a simplistic example, but try and [Tweet “hack your way such that these ‘stuck capital’ costs are not on your head until absolutely necessary”]
5. Look for alternate sources of money
Do some other stuff. Let’s say you’re in a situation where even your day job does not give you enough money to save for a future start-up venture. Then the time has come to look for alternate sources of money. These could be consulting for clients or freelancing on platforms such as Upwork (or even fiverr). In fact even while working on your startup, if you feel that there is a situation where a cash crunch could be just around the corner, you can always keep an eye open for consulting or freelancing projects.
6. Find cofounders who are also willing to work for sweat equity.
Yes, I know this is an extremely difficult task but you could always try to find people who are in a similar situation as yourself. Be fair to them and also to yourself, try to structure a deal which takes you closer to your start-up goal without screwing any of the partners. Combine motivations and aspirations, and you just might make something that is invincible!
7. Stretch a dollar as much as you can.
If you can reduce the costs by 1% or increase the revenue by 1%, slowly these things start adding up and might give you a month of extra time. The point is that often times entrepreneurs focus on the big picture and, seeing the news reports these days, you might get a feeling that all founders spent 99% of their time in raising millions of dollars. That’s true in some cases but that is not where you are. In your case you need to survive and you must pay attention to the smallest of details to stretch your money.
Look for symbiotic relationships with other startups or established companies. Co-branding, co-creating products, sharing newsletters and so on and so forth. These things will benefit both parties and also distribute the costs between multiple partners whereas earlier you would have had to manage all the expenses by yourself.
9. Do not be an entrepreneur with no money
And finally, change your situation. No this does not mean dreaming and buying lottery tickets. This means to always keep an eye open for funding sources. Friends and families is an obvious one. Rich individuals who don’t really invest in start-ups but are curious to see what is going on in a world where a two-month-old company is raising millions of dollars – see if you can convince these people about your idea. Look at banks and government initiatives that help people like you. There is a chance that certain initiatives are only for particular sectors – see if your idea can be pivoted to match those. Look at credit cards and if you can use their lines to survive on a month-to-month basis. Accelerators & incubators are sprouting up everywhere – can they fit you?
A high percentage of the focus must be devoted to getting money. In today’s scenario it is extremely difficult to generate capital without a working product and active users. However there are plenty of options which can give you a side road into reaching your destination. Pre-launches and platforms such as kickstarter are great for people in such a situation. If you have the right qualifications and you can create a marketing copy which convinces customers then, even if the product is not yet ready, there is a high probability that you can start collecting pre-orders and get the money to develop your product.
Nothing, absolutely nothing beats perseverance. If your mind is set and the skills are there, then anything is achievable and certainly there are plenty of people who have made the rags to riches story a reality.