By Omotayo B. Adeoye. The founder of The Wumbb, a Start-up and SME consulting firm that specializes in building ideas and growing businesses X: “Tayo, I have a massive idea that can make me millions from the first month” Tayo: “Okay that’s nice, have you started work on it?” X: “No, I haven’t. I am
By Omotayo B. Adeoye. The founder of The Wumbb, a Start-up and SME consulting firm that specializes in building ideas and growing businesses
X: “Tayo, I have a massive idea that can make me millions from the first month”
Tayo: “Okay that’s nice, have you started work on it?”
X: “No, I haven’t. I am waiting to gather enough money, then I will start.”
This is the type of conversation I have every day with wantapreneuers (people who aspire to be entrepreneurs but haven’t started yet). I have come across many people with substantial ideas who haven’t started building their businesses because they believe they need to raise money before starting out. It is true that you cannot start a business without any form of money even if you want to start a blog, you will need a laptop and internet connection to do it. This post is to point out ways to start your business without that perceived money you think you need. For the strategies I’m about to propose to work, some crucial steps must be taken.
Step 1: The first and most important step to this approach is to Breakdown Your Start-Up Expenses. Get a sheet of paper and biro, and list out everything you will need to start your business. This would typically include; a website, staffing, office locations, a telephone, machines, chemicals, furniture etc. depending on the type of business. After making this list, take a critical look at the list and reduce those items by 75%. Remove anything that is not crucial/necessary for your business to start. For example, some businesses can start without a website; do you need to buy a telephone for your business? why not use your own phone number; do you need an office at this point? Note here that the emphasis is on NEED, the only things left on your list should be those things without which it is impossible for your business to start. When you have done this, move to step 2.
Step 2: Breakdown your idea into a minimum viable product. This is how you do it. Write down the 3 core things your business will do for people. So let’s assume you want to start a poultry business; the 3 core things may be (a) To raise chicken for sale in December (b) To produce eggs for sale everyday (c) To provide manure for farm use. Now, take one of these 3 and start with that, leaving the 2 for now. For the example above; you can start with only raising chickens for sale in December. This will significantly reduce your start-up cost as now you will only need money for the purchase and maintenance of say 50 chicks.
After this 2 steps, you can then explore all or one of this strategies for starting your business without money.
- Ask for help from family and friends
This help can range from financial help to physical help. You will need to explain to them what you want to do in details and what it would benefit them if you do it (nobody wants to do anything that won’t benefit them in anyway, even if the benefit is that you get to stop being dependent on them or you are happier). You can ask your friend who knows graphic design to help design your logo, or your friend who studies computer science to help design a website or build an app; you can ask your relatives for loan or an office space in their company. This is one key reason why you need to build solid and valuable networks as an entrepreneur.
- Offer services before products
People generally pay upfront for a service than a product; you can take advantage of this. Let’s assume you want to start a catering service, begin by freelancing your skills. Without the razz matazz of a website, office, employees or a shiny business card, keep your ear on the ground for an event; once you get wind of an event your friend or neighbour is organizing, offer your services at a minimal price. Work hard at convincing them of your skills and expertise, give them a quote and ask them to pay a percentage upfront; with that money go ahead and deliver the best service. When the rest of the money is paid, use it on your business. You can use that money to pay for a logo or business cards or fliers to share at your next event. Don’t be shy, sell yourself at every event you cover; go round the tables and ask what people thought about the food, recommend yourself to them in case they need your services later.
- Do things by yourself
Many things involved in starting a business can be done by yourself or they are skills you can quickly learn and deploy on your business. This is the information age, there is information everywhere about everything, just ask Google! You can build your own website, design your own logo, create your own social media accounts, draw up document templates, do your own accounting and so much more. You can learn to do anything if you dedicate your time to it, there are numerous free online courses you can take. It may take more time and it may not be perfect but you would have gotten it done and learnt a new skill also.
- Use social capital
Social capital is a term I first heard used by Pastor Sam Adeyemi in one of his audio messages. Social capital is simply the goodwill or trust that others have of you. This social capital is what allows someone give you money to start a business or gives you goods on credit. For me, it is my work ethic, anybody that knows me knows that I work tirelessly until I achieve my goals; I have personally had people give me money for whenever I have an idea even if I didn’t have one at the time. So let’s say you want to start a retail business, as someone with high social capital, you can get people to give you goods on credit and then you sell and pay them back; you get someone to recommend you for a project; you can get someone to do something for you and then you pay later. What is that good thing you are known for, call it to action now.
- Get into strategic partnerships
If you have the skill or idea and you know someone who has money and is willing to put it in a business, sell your idea to them and get them to partner with you. They bring the money and you bring the know-how. A serious mistake entrepreneurs make is to get greedy with equity. They are so consumed with the idea of owning their business that they are blinded to the facts of real business. Do you think anyone will give you 10 billion for your business with nothing in return? If you do, kindly think again. May investors take as much as 40% equity in the businesses they invest in. Yes, your idea is great but the fact is that ideas are worth nothing if they are not built by the right people at the right time, many ideas greater than yours have perished and didn’t see the light of day for many reason. So stop hoarding yours, every idea that anyone has, has been thought about by someone else before, nothing is new under the sun. The truth is anyone who invests anything in your idea such as money or time has more to lose than you, and for them to invest that it means they have a level of belief and trust in you. So don’t let greed limit your business future, get into partnerships that can move your business forward. If you know someone who has the money you need, offer them equity even if it’s just 5%. You could even get someone to work for you by offering them a percentage of profit.
- Sell your things
You have 3 phones; an iPhone and a blackberry, you just got a mac for your birthday and you have 500 shoes in your closet. Why don’t you sell your excess things and use the money to build your future. I know this hits close to home but think about it this way, you are denying yourself things that will secure your financial future. Besides if you believe in your idea so much, why don’t you put your money where your mouth is? So sell that mac and buy a cheaper pc, instead of living in that flat alone, rent out the extra rooms, sell half of your shoes and clothes, do a spring cleaning and sell the stuff you don’t need. You won’t die without those things and you will have the money you need to pursue your dreams. Hopefully all will go well and you will make enough money to buy them back later.
- Apply for funding programs
There are a lot of programs going on now that give entrepreneurs and small business owners money to start and grow their businesses such as YOUWIN, TEEP and the ignite ideas that is currently open. Prepare a business plan, pitch your ideas and stand in line to win start-up funds. This is an easier way to go about funding your business. Although I must warn you that even if you don’t win in any of these programs, it doesn’t mean your idea isn’t worth pursuing so employ other means of starting a business without money as outlined in this article.
- Look out for free and low cost services
There are many services you can use for little or nothing. These services range from email, website, social management, accounting softwares to business listings. Learn how to negotiate a good deal and get the best services at the lowest cost.
- Suspend some things
Some things are important to starting a business but they aren’t crucial and even be a waste of money if your business doesn’t turn out the way you expect it to. You can suspend things like incorporating your business, employing someone, printing shiny business cards, extensive adverting etc. till you’ve tested your idea and your business and made some level of profit that can finance them.
10. Don’t quit your job yet
This sounds rhetorical even to me as I type these words but it is true. If you currently have a job but you want to start a business badly, hold on don’t quit yet. Make the decision to start, choose a good business to pursue, then change the way you spend money. From now on, for any salary you get, put 50% into building your business. If you do this consistently, in about 3 months depending on your salary you should be able to start your business.
The marks of a true entrepreneur include grit, tenacity and the ability to create opportunities for themselves. A true entrepreneur allows nothing to stop them, they know they must build their ideas for the common good and they are willing to go all out for it. They create the world as we know it and this is what makes them special!
Are you an entrepreneur or a wantapreneur?