One of the biggest concerns with accomplishing a dream a lot of times, is money. But money doesn’t have to be a barrier when it comes to your dream of starting your own business, you just have to know how to work around it. Below is advice from Jayson Demers, CEO and Founder of AudienceBloom, on how to start a business despite your lack of money:
You have two main paths of starting a business with less money: lowering your costs or increasing your available capital from outside sources. You have three options here:
Option one: Reduce your needs
Your first option is to change your business model to demand fewer needs as listed above. For example, if you were planning on starting a company of personal trainers, you could reduce your “employee” expenses by being the sole employee at the start. Unless you need office space, you can work from home. You can even do your homework to find cheaper sources of supplies, or cut out entire product lines that are too expensive to produce at the outset.
There are a few expenses that you won’t be able to avoid, however. Licensing and legal fees will set you back even if you cut back on everything else. According to the SBA, many microbusinesses get started on less than $3,000, and home-based franchises can be started for as little as $1,000.
Option two: Bootstrap
Your second option invokes the idea of a “warmup” period for your business. Instead of going straight into full-fledged business mode, you’ll start with just the basics. You might launch a blog and one niche service, reducing your scope, your audience and your profit, in order to get a head-start. If you can start as a self-employed individual, you’ll avoid some of the biggest initial costs (and enjoy a simpler tax situation, too).
Once you start realizing some revenue, you can invest in yourself, and build the business you imagined piece by piece, rather than all at once.
Option three: Outsource
Your third option is all about getting funding from outside sources. I’ve covered the world of startup funding in a number of different pieces, so I won’t get into much detail, but know there are dozens of potential ways to raise capital — even if you don’t have much yourself. Here are just a few potential sources for you:
Friends and family. Don’t rule out the possibility of getting help from friends and family, even if you have to piece the capital together from multiple sources.
Angel investors. Angel investors are wealthy individuals who back business ideas early in their generation. They typically invest in exchange for partial ownership of the company, which is a sacrifice worth considering.
Venture capitalists. Venture capitalists are like angel investors, but are typically partnerships or organizations and tend to scout businesses that are already in existence.
Crowdfunding. It’s popular for a reason: with a good idea and enough work, you can attract funding for anything.
Government grants and loans. The Small Business Administration (and a number of state and local government agencies) exist solely to help small businesses grow. Many offer loans and grants to help you get started.
Bank loans. You can always open a line of credit with the bank if your credit is in good standing.
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