How To Start A Small Business Without Any Capital
There’s a lot of appeal in being a business owner. The freedom to set your own schedule, choose where you want to work, and potentially unlimited earning capacity are all huge drawcards for prospective small business owners. However, everyone knows that you need capital to start a business, right? After all, businesses don’t run on fresh air! If you’re dreaming of being your own boss but don’t have the cash to bankroll your idea, here are a few tips that could help.
Find A Business Partner
Some people have all the ideas and expertise, and others have all the cash. Finding a business partner can allow you to start a business without having any capital of your own and share the risk with another person. A business partner is someone who will probably want to share in the day to day running of your business. Ideally, it will be someone who in addition to having the funds to invest, will also have skills in other areas that you lack. For example, maybe you’re strong in sales but not so great in revenue forecasting.
Find A Venture Capitalist
If you’re prepared to give up shares of your business, then finding a venture capitalist may be for you. Venture Capitalists are private equity investors who invest funds in start-ups (or existing businesses that need capital to expand) for a share in the business. Often, this type of investor will be a ‘silent investor’ and won’t necessarily have a say in the day to day running of your business. However, these agreements can differ depending on the agreements put in place.
If you are social media savy, then crowdfunding may appeal to you. Typically, crowdfunding utilises a 3rd party such as www.gofundme.com (though there are others), enabling you to set an amount of money you’d like to raise within a specified period. It is limited though to your ability to reach people who essentially want to give you money to help raise your specified dollar amount. It’s also important to note that some crowdfunding platforms won’t let you keep any of the money you raise if you don’t meet your target by your deadline.
If you have a property with existing equity, then you may be able to use the equity in your home to take out a business loan. Essentially, if the value of your home is greater than the amount you’ve paid down on your mortgage, you may be in a position to borrow the difference.
Speak To A Finance Broker
Speaking of equity, it’s a good idea to talk with a finance broker who can help you source a business loan to fund your business idea. You’ll need a clear business plan which will show your business structure and a financial forecast. When looking for a finance broker, try and find someone who has a background in lending to small business owners and small business owner themselves. Going directly to a lender will often mean dealing with someone who lacks first-hand knowledge of the ups and downs of starting and growing a business.
Did you know that I’ve successfully started multiple businesses over the last 20 years, and I have a background in providing finance to small business owners? Why not give me a call and see how I can help you turn your small business dream into a reality.
Written by Jason Pestano