Starting a business with little to no investment can be a daunting thing to do.
You have 100s, even thousands of competitors out there with large budgets that can blow you out of the water.
Starting out, you may feel like a small fish in a massive sea of sharks.
But what if I told you that your advantage is actually your lack of money and resources?
Would you believe me?
See, when an entrepreneur has no money, yet has a massive vision or goal they want to achieve, they tend to get creative.
Starting my first business, the e-commerce dropshipping store, I went into the business for the sole reason that I didn't need money to start.
Following this, I started many other businesses, including the marketing agency, Condensr - the book summary app, and most recently, Hawk prospecting software.
In this article, I'm going to be talking about the things that I've tried and learned from starting businesses with no money.
Every business I've tried has had fragments of success and a lot of errors made too.
Here are the 5 things that I've learnt which have helped me start businesses with little to no money.
Start a service business
Starting a business doesn't always mean putting up tens of thousands of dollars upfront.
In fact, many businesses that are starting out will not have anywhere near this amount of money to play around with.
You may have heard of some rare cases where businesses are funded really well, perhaps businesses in the fintech industry specifically.
These businesses are given millions of dollars to play around with and test with upfront from investors.
The truth behind this is that not everyone is going to be able to raise money from investors.
Starting Condensr, the app that summarises books into quick and detailed 10 minute narrations, I was going to go after funding.
We had a plan to change the world with our product and this vision required massive funding.
We were even getting interest from investors which was really cool.
After quitting Condensr, I realised that we don't need funding to be successful.
In fact, you can become a lot more successful without them.
After all, finding investors is like buying yourself a boss in your own business.
In your case, you may just want a business that makes you a good income and allows you to spend your time freely.
With this, you won't need to build a fintech startup, you won't even need to raise any funding.
You can start a business that doesn't require any upfront investments.
A few examples of this can be a marketing agency or other service-based businesses.
Whether you consider this a business or not, YouTube is a great way to make money, especially once you've grown a large fanbase.
On top of this, I've even spoken about starting your own clothing brand... for free too!
There are many businesses that can be started for a really small upfront investment of money which can grow to become large businesses that generate lots of capital for their founders.
Find a business that interests and excites you, and start it.
Talk to customers
Imagine a world where your customers are the ones who pay for your own product.
A world where all you have to do is build a product and the money will take care of itself because the customers are dying for this solution.
Interestingly enough, you don't have to imagine this.
If you're a fan of Eric Ries or know anything about 'The Lean Startup' methodology, you'll know that this is an increasingly popular concept amongst new founders.
In fact, it's the concept I adopted for Condensr.
This is all about starting with an idea and validating it before building anything.
For a few businesses where the problem is extremely pressing and the alternatives are not quite fixing the problem, you can even get customers paying you upfront to build the product.
With Condesnr, however, this was not the case.
Condensr had many alternatives - free and paid, which made it a product that didn't fit this category.
However, I have a friend who's building a job marketplace business (which I can't talk too much about), who has managed to get paying customers before the product has even been built yet.
This is what a pressing problem that has not been adequately solved by the current solutions looks like.
Talking to customers is a great way to validate if the problem you're looking to solve with your business is a big enough problem.
They're able to tell you more about their pain points, what they currently do to solve it, why it doesn't work, hinting towards what might be a great solution.
You may even be able to find your early customers in this batch of interviews that you carry out.
From these interviews, you'll then be able to understand the audience and their problems better.
You'll be able to make better decisions on whether this is a business worth building backed by real data and human interactions.
Eric Ries says that startups are like scientific experiments - there are just too many unknown factors which you must validate quickly.
Once you've figured out if the problem is really important to the customers that you identified, you'll be able to offer a solution known as an MVP (minimum viable product).
This MVP allows you to test your hypothesis with a real product, get more feedback and iterate it.
An MVP can be built for free.
This is where the next tip comes in.
Do everything manually
Starting Condensr, one of the biggest mistakes I made was neglecting the competitive landscape early on.
I was scared to dig deeper into Google and uncover a heap of competition that would derail my business idea.
So I arrogantly accepted that I only had a few competitors, the biggest being Blinkist.
I jumped straight into product development where I hired a software development team to build a wireframe.
I had no experience with this previously and so I spent $2000 on a wireframe that I may have been able to build myself.
I was told that this wireframe would help me get investors, only to find out that investors valued traction and an MVP stage to invest.
Both of these things could have happened when I had $2000 extra in my pocket.
Now with Hawk, I have managed to build a whole SaaS product without spending anything on a software development team.
I just learnt how to do it myself.
Very simply put, an MVP is the simplest version of your product that is needed to launch to users.
In Condensr's case, this could have been a short book summary written and narrated.
We could have created a Facebook group and those who join would be sent this file to listen to.
The feedback would come in and we'd use this feedback to improve the product.
Slowly, we can start to improve the product, start charging and then build out the apps for the product.
There are many types and ways to build out an MVP that we don't have time to discuss in this article.
The founder of AirBnB is famously known for saying 'Do things that don't scale.'
When you're starting out with no money or investment available, you'll want to do whatever it takes to test your product for cheap.
With a marketing agency, you don't have to pay employees, you can work as a freelancer and start building up a portfolio.
Once that's done, you can start outsourcing your work, or working with a media buyer to deliver the results for your clients.
With most businesses today, you're likely able to find a way to build an MVP version of the business for free or at least do everything manually yourself.
Once you start seeing some traction, you can start reinvesting your profits or go for an investment.
Embrace free marketing
Patience has become a very rare trait to find amongst people, especially entrepreneurs.
In a world full of instant gratification, it's hard to imagine waiting a long time for something to happen.
Take Amazon as an example.
You can order a product that arrives the same day you order it.
I, for one, am extremely impatient but have learnt to become more patient over the past year or so.
My goal of becoming 'rich' before turning 18 went down the drain, and following this unfortunate turnout, I felt sad and almost depressed.
Comparing myself to the lives of social media influencers, I felt like a disappointment, and like I have no time left.
If you've read an article or two of mine previously, you'll know I love the quote by Bill Gates that reads "Most people overestimate what they can achieve in a year and underestimate what they can achieve in ten years."
Within a year, I was trying to become a millionaire.
I was a 17-year-old boy who didn't know anything about the world of business, just starting a dropshipping store.
My chances of success back then were slim to none.
On the other hand, we look at people like Warren Buffet, one of the richest people in the world today.
Warren Buffet embraces long-term wealth, he's built his wealth on this principle.
He's been quoted before for saying "The stock market is a device to transfer money from the impatient to the patient."
Many new traders invest in the stock market hoping to make a 'quick flip,' only to realise that they just lost all their money.
How is all this relevant to you?
New entrepreneurs today only know one marketing strategy - feeding Zuckerberg.
I'm a 'Zucker' for this too, it's hard to get around the fact that in order to grow a business you have to do things like talk to customers, get on calls, do cold outreach, post content, and so on.
I'd rather just pay Facebook and they'll put my adverts in front of people.
But for a new business with little to no money, this can be extremely difficult and scary.
You may have never even seen a Facebook ad account dashboard before and you're about to throw your money at it?
This is why it's important, in the early days at least, to embrace free marketing strategies.
There are many ways to market a business for free.
Long-term strategies include content and SEO, whilst faster turnaround methods include things such as cold outreach.
During my marketing agency days, I was looking for commission-only salespeople who would help me find and close clients, collecting a commission on the top of that.
It's best to focus your time and energy on one channel and then, as you grow, expand into more channels and perhaps even paid marketing.
Find a partner
Having a business partner can greatly de-risk the business for you.
The issue, however, with a partner is finding the right one.
With my marketing agency, I decided to start with two friends.
It turned out to be one of the worst decisions I've ever made.
One of the partners quit the business after a few weeks whilst the other one stuck around for a few months, and doing almost nothing throughout this period.
Having a business parter, I've been told, is like 'being in a relationship with none of the fun.'
A successful partnership is only possible when the partners work towards a singular goal without clashing heads.
Each partner should specialise in an aspect of the business and share equal responsibility for what they're getting out of it.
A 50/50 partnership should mean that both partners do equal amounts of work on the business.
When you have a business partner, you're able to split the costs of running the business, have virtually more time to work on the business, and get a lot more done in the day.
Whilst there are many downsides, the right partnership can be an unmatched advantage.
You might know someone with a lot of passion or a large goal.
Nurture them, spend time with them, and figure out if you'd make great partners.
When the time comes, propose.
If they say yes, then you're off to the races.
Make sure you set expectations early on - you don't want things to go left and then you're stuck in a state of limbo where both you and your partner don't know what to do, if you should leave, etc.
So if you're ready to start a business with a partner, go for it.
Investors prefer a team over solo founders anyway.
Have you learnt anything from this blog?
Let me know what you think and if there's another tip you'd like to share in the comments below.
Till next time,