Tuesday, June 16, 2009

How to Start Your Own Business Without Money

How to Start Your Own Business Without Money

Creating and sustaining your own business is still the surest way to wealth. It is by far the more difficult route to take, but many have succeeded. There is a fallacy mindset that you need money in order to start a business. The purpose of this article is to challenge that mindset. Possessing the right knowledge and having perseverance and dedication is more important. Being prepared to fail a few times is also vital to your ultimate success.

1- Grow some passion and determination. Determination is the separating factor. Passion drives determination. Find some areas you are passionate about and grow your skills in those areas through studies, training courses and the practical application of knowledge and skill. Find ways to make money out of your passion rather than resorting to making the niche that makes you money your passion.

2- Be prepared to reinvent yourself. Flexibility is also a great asset as you may have to ‘reinvent’ yourself a few times to find the right slant to tackle the niche you have chosen to operate in. Be prepared to give up one niche for another in the short term, moving with the times and changes in the economic climate and consumer demand.

3- Conduct a few tests run on your ideas to evolve them. Preparation and planning is vital before setting out on any venture. Business plans are evolving documents. Draft one and then ignore it for one year. Compare the practical rolling out of your business venture with your original business plan, and then refine the plan again. Work on this at least once a year going forward. Favor the least expensive idea over the cost-heavy one.

4- Start your business whilst still employed. 90% of entrepreneurs started off as employees in some or another capacity prior to venturing out on their own. Firstly, never sign an employment contract containing a restraint of trade. Then, once you have adequate knowledge and experience, the ideal is to make the transition from a full time employee to a consultant, still in the same industry or even better, within the same Company. Slowly set yourself free from your familiar working environment in this manner. This allows you a soft landing, which is good for your mind and emotions and also gives you opportunity to have more flexibility of time in order to grow business opportunities and test business ideas without impacting your pocket too adversely within the first vital year of trade.

5- Find opportunities to build skills you require to succeed in the area you intend operating in, with as little cost as possible. Find ways to make lucrative deals with training institutions or Companies to have them pay for your training in exchange for services rendered.

6- Remember that the product is most important. We live in a results-driven society. Consumers seek results and do not want to be deceived. A good product markets itself. Build this before you build your marketing plan.

7- Let your creativity replace your money. Get back to basics. Leverage and minimize the need for cash and aggressively increase sales activity through developing and implementing creative ideas and concepts. Always think big. Take massive action towards your goals and persist until you succeed.

8- Remember you are your best employee. Keep it small and cost free in the beginning. Be loathe and hesitant to employ people, unless you are guaranteed of their return on investment. If this is a grey area, rather don’t do it. Salaries are usually the greatest management expense in any business. You want to keep these costs as low as possible, in the beginning and throughout the life cycle of your business.

9- Involve your family in your business (wife, husband and children). Give them joined ownership of the success of your business. Many large Corporations have been in family generations for years. At the very least, entrepreneurs who started these great Companies have, in their children, totally dedicated Company leaders who can be entrusted with anything.

10- Try to avoid Partnerships. Rather make people ‘partners’ in various aspects, but never sign anything on a dotted line in this regard. Be careful when using the term ‘partner’ with business associates, as the legal concept of promissory estoppels (the spoken word superseding a written contract) might bite you at a later stage, especially if you start making money.

11- If you have a home, this is where your first office has to be. Write off a part of your home to ‘rental’ in your books, and pay this money into your bond, if you have one.

12- Build your ability to barter. When all else fails, negotiate. This is often the dividing line between a full time employee of a Company and an entrepreneur. In some countries, you have to negotiate a price for virtually anything. Try visiting one of those countries for a while to get some fun practice in. This is a skill you need to build as it requires strategic know-how and confidence. Take risks (but protect your legal rights) and you may be pleasantly surprised at the outcome.

13- Make up for the absence of money with hard work. If you enjoy what you do, investing long hours in your business will often feel like ‘fun’ and you will do it willingly. If you are forced to do something you don’t enjoy too much to bring in income (only allow this for short term spurts) and are required to spend excess time doing it; ensure you carefully manage your stress levels. You may experience burnout before you start making real money or get anywhere in the ventures you are truly passionate about. This is a sure path back to becoming a paid employee all over again.

14- Know your rights. Having sound knowledge of Commercial Law, especially the Law of Contract and your Countries’ Legislative requirements in as far as business owners are concerned is important to succeed as an entrepreneur. Seeking Legal Counsel for every small aspect concerning the law will bankrupt you in no time. Rather build this skill and knowledge as far as you can before you begin forking out money to pay for it.

15- Look after your physical, mental and emotional state. If you lose your health, you lose it all. A healthy body, mind and soul (emotions included) are vital to success as a business owner. Try and get some income protector insurance in place as a self-employed person cannot afford to lose income to this possibility. Your gym fee is an important monthly expense and don’t be tempted to compromise on that when finances become tight. Keep grounded in your faith as you will need strength of spirit to survive the ‘jungle’ out there.

16- Get the balance right. Live life within balance. Even when you are starting out a business without a cent in the bank. Losing your balance and perspective in life will make you poorer in the long run and is never a risk worth taking. Never miss a night’s sleep, meddle with your regular healthy eating and exercise plans. This will break you down and cause you to make irrational, emotional decisions which are never a good thing in business.

Thanks to My Vintage Vogue for providing the picture.

No comments: