This post contains affiliate links please see our disclaimer page for more information.One of the biggest myths circulating today is that the American dream is dead and that bootstrapping is impossible. Most people assume that there is no way to start a business with no money and that you have to either save for years or take a loan out just to get started. Time magazine even did an article about how bootstrapping is a myth and no longer a viable option in our day and time. To them I would say, bootstrapping might be harder then it used to be but it is still alive and well if you know how to work and think outside the box. In this post I want to talk about some of the processes I went through in order to start a business with no money. I will talk about what outside the box thinking I had to do and how I discovered that every business can be stripped down to its very basics and grown from that point.
The first step that I took after writing my ideas down, was to write down a plan of action. I needed to figure out what to sell, how i was going to buy it, where my equipment would come from and how much it would cost. I also had to figure out how to scale the process down so I actually could start a business with no money. Basically I had to write down a plan. Now when I talk about a plan I’m not talking about a huge drawn out plan that you can take to the bank to get financing, I’m talking about sitting down with a pen and paper and working out what you really want to do and how you want to do it.
At this point you have probably already taken the time to write down a one or maybe a few start up ideas, if not you might want to go ahead and do that because it is the first step and I explain why in What to do with Startup Ideas last week. Writing it down just helps you wrap your head around it and make it a little more real. Once that’s finished its time to start mapping out whats next.
First it’s important that you understand that no matter what kind of business idea you have or what kind of business that you want to start All Business are Service Businesses. That means that whether you want to mow grass, walk dogs, sell industrial fans, own a coffee shop, sell an app or anything else, it all begins and ends with service. No matter if you do the best job in the world or have the best product, if your service sucks no one will want to have to endure that just to buy from you. So keep that at the forefront of all of your thinking. The bigger the idea, the faster you grow, the more demand for top notch service.
That all being said, there are two main types of product that any business can get into. You have an actual item that a customer purchases, or you have a service that you provide for money. Normally a business will start out with one and then end up doing both one way or another. A few examples of this are like Bakeries, which sell a product but can also provide the service of custom design for special occasions, Lawn service companies start with yard upkeep and then normally start offering products to keep your yard beautiful, even apps do it in the way they will offer a service a lot of times and then try to get you to buy tools in the app the will help even more. So the first step is to find out specifically what your idea is. Is it an idea for an item to sell or is it an idea for a service that can be performed.
Once your have figured out what side of the road your idea is on you need to start figuring out how you are going to make money doing it and more importantly how you are going to do that will little to no money to invest.
Scaling Down to Start up
So you have the idea, you know what the main goal is, and you’ve started to write down the plan, but now you need to get started. One of the main issues I dealt with when I started my business was that i had no money. I had just gotten a new job and it was demanding most of my time and I was also in that paycheck period where I had gotten the last one from my previous employer but I wasn’t getting one from the new employer for a few weeks. I really was sick of selling my time to other people so I wanted to start something for myself and make that my living. I had the idea to work with manufacturing companies because I liked the steady stream of business and I wanted to grow quickly, but they all work on terms and it normally takes a lot to buy into a product that they will want. I was stuck, I could wait and save money and take a while or I could dig deep and find a solution. This is when the idea of Scaling Down to Start Up was born. I wasn’t patient enough to wait so I called, got online, and found a product that I new some people could use. I called up the manufacturer to see if they would sell to me and then I started making test calls to find out if there was a market for the product. On one of my first calls I got a hold of a guy that was sick of who he was buying from and he wanted to take a look at other options. I was ecstatic, just like that I had my first quote. I didn’t have a registered business name, an EIN, a bank account, a website or even an email, but I had a possible Sale. I was so excited that it took probably five minutes before I realized that I had no way to buy the product that i was trying to sell to this guy. Never one to just give up, I decided to call the manufacturer and tell him what was going on. He gave me two options, I could either sell it through him, sort of like an affiliate, or he would sell it to me for 30% down and the rest paid at thirty days. I knew what I wanted, I wanted to build my own business with my own brand but I didn’t even have the 30%. Regardless of that I knew that one way or another I could make a sale and deliver, so I went to see the customer. We talked for a bit and I told him about the product, I explained that I was a new business but I had a lot of experience with the product and this one was a good one. Ultimately he asked me for pricing and within a few days called me to place the order. During that time I had spoken with a few friends of mine and one had recommended something I had never though of. They recommended that I do the same thing to my customer that the manufacturer was doing to me and ask for a percentage down. I advised the customer of this and they agreed.
After that sale was made a lot of stuff went down in a hurry. I registered with the state, got my irs number, opened a bank account and made up my paperwork all in the same day. None of it took a long time and my paperwork has changes a lot since then but it did the job for that day. I still have that customer and i haven’t looked back. Within six months I had quit my job and was working full time in my business.
Now all of that was said to make a point. Anyone has the ability to start a business with no money. You just need to find out how to scale down unit you can make it happen. If you want to sell your own product that you make then your already there, if you want to start with someone else’s find a way to work it out for free with them and move up from there. If you want to do service find out how you can do it will little to no equipment and do it yourself. I once had someone come to me with an idea to start a house cleaning business, he was convinced that he needed $15,000.00 to buy a truck, a power washer, the supplies he needed and to market. I told him to go house to house with a printed flyer, find someone that needs the help and for less than $150.00 you can rent the truck and power washer for the day and put back the money you made to buy the equipment out of profit. He did what I recommended and before to long he bought his own washing equipment. Now he’s saving up for the van.
So write down what you actually want to sell, make a general plan around that but do it in a way that gets you going. There are a lot of small details around starting a business that can wait until you actually have something solid going on. Take the idea down to the point where you can do it without a a lot of investment and then the last step that is the same no matter what business your in, hit the street and make some sales.
If you need some help with this idea feel free to get it touch, I would be happy to help find the a way to scale down and start a business with no money.
I like to recommend products that have helped me a long the way and one of the things that I use a lot are journals. It sounds weird but I have found that writing the ideas in there own special book helps me to take them more seriously and remember them better. I don’t use any super expensive note books just a basic black journal like the one below.