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<\/a><\/div>\n<\/p>\n
\nloans or venture capital – to start and grow a business.<\/b><\/div>\n
\nbusinesses started each year in this country (each and every year) and I can
\nguarantee you that very few of them get or qualify for a business loan or some other forms of outside capital.<\/div>\n
\nthese days with banks not lending to small business let alone to start-ups,
\nover 90% of all new businesses have to get their companies up and running
\nwithout any type of outside financial help at all.<\/div>\n
\nThey find a way. Which is the defining characteristic
\nof an entrepreneur<\/a> – to find a way to make it happen.<\/p><\/blockquote>\n\nAll businesses are limited in the number of resources they
\nhave to run and grow their companies. Thus, in order to survive and expand,
\nthey have to get the most out of the resources (cash, capital, equipment, property,
\nlabor, etc) they do have.<\/div>\n\nTherefore, those businesses that do succeed in starting up
\ntheir companies without business loans do so by finding a way to make what they
\nneed to happen.<\/p>\n\nFor example, a business that has no money or staff (limited
\nresources) to kick off a marketing campaign but are still able to drive
\ncustomers to the business by using free resources like social media, word of
\nmouth marketing and referral programs. Or, the new bakery business that can’t
\nafford a kitchen or kitchen equipment but grew the business by using other the restaurant’s stoves and ovens after hours and providing them a percentage of
\nrevenue earned in exchange.<\/p>\n\nWhile getting a business loan or millions in venture capital
\nwill surely make your business life easier, having those resources is not a key
\nelement for success. What is the ability to find a way – any way – to start and
\ngrow your business regardless of what you have on hand?<\/div>\n\n<\/a><\/div>\n
\n3 Ways To Start Your Business Without A Business Loan<\/b><\/h2>\n
\nThe first thing to understand is that all businesses are
\nunique and thus all have to find their own unique ways to overcome their
\nparticular obstacles. To that point, we tried to generalize these 3 simple ways
\nto start-up a new business as a means of not providing a concert road map to your
\nindividual business success but as a means to demonstrate what can be done and
\nthen let you take the ball from there and apply it to your own situation.<\/p>\n\nLastly, while the following may be instinctive to some, they
\nmay also seem impossible to others, do know that businesses have been using
\nthese methods or some variation of them to start their companies since the
\nbeginning of time.<\/div>\n\n1) Don’t Use Any Money<\/b><\/h3>\n
\n\u00a0<\/p>\n
Most of the time, new business owners will use the capital
\n(money) they have on hand to get tasks done – either by hiring labor to do it
\n(be it employees or professional help) or purchasing a product or service that
\nwill complete the task for them. What this means is that their money is being
\nspent to save the business owner some time and effort.<\/p><\/div>\n\nHowever, if you don’t have any money – then you just have to
\ndo those things yourself. And, for those business tasks you are unsure about,
\nyou just have to take the time to learn.<\/div>\n\nHere is a great example. When Bill Gates first started
\nMicrosoft, he too had limited resources and spent most of his money hiring
\ngeeks (software designers, software engineers, etc). But that left no money for
\nlegal issues or accounting. Thus, when he hired someone, he would also tell
\nthem; “you now have to go learn the legal side and handle that for us”
\non top of all your other duties. Do you really want to know what business
\ntricks he used? You
\ncan know this here<\/a>.<\/div>\n\nDid it work? Look at the company now.<\/b><\/h4>\n
\nAnother example could be a retail business wanting to set up a
\nbrick and mortar storefront but not having the money to do so. Thus, the owner
\ntakes the business online first and uses many of the free resources out there
\n(like eBay, Amazon, WordPress and even Facebook.) to do it – followed by
\nspending a lot of their own time making it all come together.<\/p>\n\nThen, when the business gets to a certain point that it can
\nafford rent or a lease and all the other expenses related to running a
\ntraditional retail business – it can then decide if that is the direction the business still wants to pursue.<\/div>\n\nOther ways to get a business task done without spending
\nmoney (especially if you don’t have money) are:<\/b><\/h4>\n\nNote: These are just a few of the major expenses that
\nsmall businesses have to face<\/i><\/b><\/p><\/blockquote>\n\nFor marketing: There are so many free ways to market a
\nbusiness in this day and age – all mostly related to social media. If your
\npotential customers are out on these free social networking sites – then so
\nshould you be?<\/div>\n\nFor labor: Most new businesses don’t need full-time labor
\nas they just can’t keep people busy enough all the time. Thus, look for ways to
\nhire interns, college students, or even people that will work for equity in the
\ncompany. Thus, you can still get done the tasks your business needs without
\nspending a dime.<\/div>\n\nOr, hire local or national free-lance individuals who can
\nget those tasks done at a fraction of the cost of hiring a full-time or even
\npart-time employee. Thus, their minimal cost is directly related to the revenue
\nthey help bring into the business.<\/div>\n\nFor operations\/management: Accounting, inventory management, and sales tend to require very sophisticated software programs to control and
\nmanage – or do they? There are many bare-bones, open-source software
\nprograms<\/a> out there on the market that can handle nearly any management task
\nin your business. And, they are all free. The one drawback is that they usually
\noffer no live support but most have forums where you can get answers to all
\nyour questions – quickly and on your time. Thus, these free programs can easily
\nbecome your front and back office without a single monetary expense to you.<\/div>\n\nIt just takes some time in finding these free programs and
\nlearning how to get the most out of them.<\/p><\/blockquote>\n\n2) Work on Your Business Part-Time<\/b><\/h3>\n
\nOne of the hardest parts about starting a new business is
\nalso having to cover personal expenses during the start-up phase.<\/p>\n\nIt is estimated that it takes a new business 12 to 18 months
\nbefore it hits its breakeven point – meaning that it takes more than a year
\nbefore the business is earning enough in revenue to cover just the business’s
\nongoing expenses – let alone having enough profits to pay the business
\nowner.<\/div>\n\n<\/a><\/div>\n
<\/p>\n
\nAnd, if you can’t access an outside business loan, this also
\nmeans that the business owner might have to go that 12 months plus without a
\npaycheck.<\/div>\n\nOn top of that, throw in this poor economy and that 12 to 18
\nmonths could stretch out to 2 plus years before the business hits that all
\nimportant breakeven or profitability point.<\/div>\n\nTo combat this, many new entrepreneurs keep their day jobs
\nand work on their businesses part-time – at night and on weekends during this
\nstart-up phase.<\/div>\n\nThis means that the business has to be started on a smaller
\nscale and potentially limp along until the business is able to sustain itself.<\/div>\n\nHowever, keep in mind that this is only temporary and that the end goal is to eventually transition full-time into the business when it is
\nfeasible to do so.<\/div>\n\nOne example of this (and there are many) is the moving company PODS<\/a>. The
\nfounder of PODS keeps his day job and worked just a few hours each night on his
\nbusiness plan and business. He did this as he was not in a financial position
\nto quit his job as well as his desire to spend some quality time with his young
\nfamily while the business began its ascent.<\/div>\n\nHowever, with some personal income, this business owner
\nwas also able to:<\/b><\/h4>\n\nTake a lot of the stress of a new business off his shoulders
\nin regards to covering his personal expenses, Provide some money to put into the business as needed, and<\/p>\n\nMost importantly, allowed the business to focus on a
\nlong-term growth strategy as opposed to a short-term, get revenue now strategy,
\nthat would have forced the owner to make bad overall business decisions.<\/div>\n\nThus, by having a full-time or even a part-time job in
\nconjunction with the business will allow new entrepreneurs time and additional
\nresources to research and develop their products and services, market the
\ncompany and properly grow the business for the long-term (which is the end goal
\nafter all).<\/div>\n\n3) Use Your Own Savings<\/b><\/h3>\n
\nGiven the poor likelihood that most businesses will get or
\nqualify for a business loan – even for an SBA guaranteed small business loan –
\nmeans that many business owners have to rely on personal resources to fund
\ntheir new companies.<\/p>\n\n<\/a><\/div>\n
\nThis can be good in several ways. First, the business owner
\nalready shows the discipline needed to make the right decisions to the benefit
\nof the business as saving money takes a lot of discipline.<\/div>\n\nSecond, by already having the needed funds in place, the entrepreneur can more easily focus on starting and growing the business and not
\nworry about debt payments or resistive loan covenants.<\/div>\n\nAnd, lastly, starting a business is about securing the financial
\nfuture of the business owner – almost the same reason that people save money.
\nThus, using personal resources is essentially just trading one method of
\nfinancial security for another. As the business grows, it will be able to offer
\nmuch more to the future wherewithal of the owner than their savings ever could.<\/div>\n\nTypes of personal resources that can be used include:<\/b><\/h4>\n
\n-Personal savings accounts,<\/p>\n
\n-Selling off personal assets like stock and bonds or other
\npersonal property that has monetary value but no longer has personal or
\nnostalgic value.<\/div>\n\n-Or, taking retirement funds and investing them in the new
\nbusiness.<\/div>\n