How To Start A Business If You’re Broke

Have you got a great business idea, but are skint? Well, don’t worry. Not all businesses require a huge amount of money to get off the ground — or even an office space. Here are eight tips that can help you turn your startup pipe dream into an affordable reality.

Broke business person image from Shutterstock

Aussie whiz kid Ben Pasternak started his tech empire from his bedroom when he was just 15 with little more than a dream floating about in his head. Within a year the now 16-year-old secured almost $US1million in funding from Silicon Valley investors, dropped out of his Sydney high school and moved to New York to become the CEO of his own start-up Flogg Inc.

Ben’s recently released iPhone app Flogg lets users list, buy and sell items easily and quickly through their own Facebook friends community — one of those classic “why didn’t I think of that before?” ideas.

So how on earth did a teenager raise so much dough? Mainly through publicity and word-of-mouth networking. The ball really got rolling when Ben got in touch with a family friend who then contacted another friend with connections in the tech industry. Those connections had their interest piqued by previous press articles about Ben’s first attempts to get a now failed app called One off the ground and decided to take a chance on his latest venture.

While it’s still to be seen how Flogg app will pan out with the public, another fledgling company that did end up doing rather well was Apple. In 2013 the garage of a modest home in Silicon Valley where Apple co-founder Steve Jobs had lived since childhood was officially declared a historic site. The garage was the “office space” where Jobs and Steve Wozniak tinkered with their first computer — the Apple 1 — in 1976. The pair hired neighbourhood kids to help and even roped in Jobs’s sister Patty to lend a hand. Eventually they moved their company to bigger digs, but the garage is still symbolic of what you can achieve from humble beginnings. If you’re raring to go, get started with these tips:

#1 Choose a low-cost business

If you really have virtually nothing in the bank, pick a simple business you can do from home that doesn’t require loads of capital such as selling, writing, virtual assisting, tutoring, child-care, administration or coaching. These won’t require outlay for stock or office rent. If you need cash for a product-based business, then work on your business in as much of your spare time as possible whilst holding down another job which will raise money for the initial capital.

#2 Consider on-line ventures

On-line businesses do not usually require a whole lot of investment. Some ideas include blog sites, affiliate sites where you can promote products, or an on-demand business in the vein of Uber where you can pay a company to help you create a mobile app for it. You could also start an eCommerce marketplace business where you deal with buyers and sellers, or a lead generation company where you find work for say a gardening business and other service providers.

#3 Try to clear debts first

Start tightening your belt — now. “If you have credit card debt, pay as much off as you can,” says Victor Sun from Fox Symes and Associates who provide budgeting and debt solutions. “Review your expenses and bills and make cuts. Find cheaper service providers, do a shopping budget and sell stuff. Go into your new venture with as little debt as possible.”

If you need to outlay for new office supplies, instead of throwing everything on a credit card at once, try to get by with what you already have or borrow from friends. Then as the business builds up, use the revenue for more purchases if you need them.

#4 Network: hard

Get in touch with all your friends, family and contacts to let them know what you are doing. If you’re a little shy about your venture, just take a deep breath and do it. If you politely ask for help or leads you will probably be surprised at how many people are willing to help you in whatever way they can.

#5 Create a business plan

If you need to borrow money for a start-up, and have debt or little savings, create a solid business plan. If you’re super professional, you may score traditional financing from a bank. If you don’t qualify, a good plan may still help you get financing through micro lenders, small business associations, business grants, private investors or crowd-funding.

#6 Use low-cost marketing strategies

The key to a successful business is marketing. Set up your own website through a free service, start a blog, get social networking, join business and customer groups, start email marketing and send article ideas on your business or expertise to websites and media outlets to drum up free publicity.

#7 Utilise free resources

Get free advice from your small business association. Memberships to larger associations, which can provide networking opportunities, education and learning programs, are also usually inexpensive. Research online and at the library.

#8 Reinvest profits

Whilst your business is in its infancy, reinvest the majority of profits back into the business. Spending a little on marketing usually generates the greatest returns.

With creativity and hard work you can start a viable business. Once your business is performing solidly, clear all debts, build up savings and enjoy the fruits of your labour.