Aspiring Entrepreneurs: No Money? No Problem! Get Started Today
Many of us have aspirations to own our own business – to be our own boss. Every year hundreds of thousands of small businesses get started by people just like you and me; people who have an idea for a product or service and follow through on it.
You may have an idea for a business but think because you don’t have the money that your dream of starting your own business will never be a reality.
However, there are a number of things you can do right now to help you get started on the path toward building your dream business. There are many steps you can take to develop startup ideas and flesh them out. And those initial steps do not take any money at all — just time and effort on your part.
1. Start a journal.
You probably have two valuable tools sitting on your desk right now: paper and pencils. Many of the greatest business people and inventors of our time kept notebooks full of ideas, thoughts and sketches. If you are still investigating what type of business you might be interested in keeping a journal is a great way to come up with great ideas. You might be shopping at the local grocery store and have that “Aha!” moment for a product or service that would take the marketplace by storm.
2. Every good business needs a business plan.
In fact, when you are looking for financing from the Small Business Administration, or even local financing, many lenders want to see a business plan first. There is a wealth of information available online and at your local library to help you put together your business plan.
In fact, putting together a business plan is one of the first things you should do before investing a dollar of your money into a business. It involves a lot of research and number crunching but is well worth it. It not only allows potential lenders to see how you plan to run the business, but it may also give you a reality check. When you see the numbers and figures on paper it lets you see firsthand if your business has a good chance of surviving, because the reality is that sometimes we have great ideas but the marketplace just isn’t ready for them yet. A good example of this is the personal computer — the idea had been around for well over a decade before IBM and Apple found a suitable marketplace for it.
3. Do you know your competition?
This is another area you can focus on right now without money. Learn about your potential competitors, what they offer and how they differentiate themselves in the marketplace. Learn from them to not only make your business better but to also find out if there is additional room in the marketplace for your business.
While you may have a great idea for the next gadget you may very well find out that the marketplace is already saturated with similar products from other competitors. You could potentially save yourself a large amount of money avoiding a failed venture by knowing your marketplace.
4. Cut through red tape and delays.
Does your business idea involve a physical product? If so, are you up to speed on all the regulations and requirements to bring that product to market? Use this time to find out about not only federal but local regulations that might affect your product roll out. Food products, for instance, are heavily regulated by various agencies because of their potential to harm others if not properly manufactured, distributed and sold.
You can find out a lot of this information from the Small Business Administration and your state government. Ask your local librarian as well, as they may be able to point you to local rules and regulations that will also affect your product.
5. Build the infrastructure.
If you are new to the world of running your own business you can also use this time to find out more about how to keep bookkeeping records, comply with federal and state tax codes and get the proper licenses. You might find that local Chamber of Commerce groups have free, introductory classes on running a business you could take to learn about the behind the scenes work required to run your own business.
Even though funds might be tight, or even non-existent, there are a number of things you can do now to get your business off on the right track. Use this time wisely to investigate the proper way to run a business as well as to investigate how the marketplace for your particular business is currently looking, not only today but in the near future. By putting a little research into your business now, before you take the plunge, you may come out miles ahead when you finally open up shop!
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About the Author: Husband, Father, Friend, Lifestyle Coach, Author, Educator, and Entrepreneur, David B. Bohl is the creator of Slow Down FAST. For more info go to Slow Down Fast and visit his blog at Slow Down Fast blog.
February 17th, 2008 at 10:59 pm
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February 18th, 2008 at 11:36 am
Hi,
I wrote a case study on challenges of starting up in the absence of adequate funding,…
http://bizine.blogspot.com/2008/02/case-study-4-surjeet-wants-to-go-solo.html
Will be great to hear ur comments on this case…
February 18th, 2008 at 12:44 pm
here is another business plan resource
http://www.TheResourceQueen.com/favorites/businessplans.html
February 18th, 2008 at 12:49 pm
While I would never discourage someone from writing a business plan, I also know there is little empirical evidence to back-up your point #2. Here’s a great post from Guy Kawasaki on the topic from a year-ago - http://blog.guykawasaki.com/2007/01/is_a_business_p.html . It points to a Wall Street Journal article and a Babson College research study regarding the lack of a correlation between startup business plans and ultimate success. Bottom line: The main reason you need a business plan is for the to the bank or other investors. But the reality is, you’re ultimate success hinges on the flexibility you have to respond to changing situations and opportunities — which nearly always means tearing up that business plan. It’s like a football game: You need to master the fundamentals and do all the pre-game planning possible. But after the whistle blows, the game plan must constantly adapt to the situation you find yourself in.
February 18th, 2008 at 1:37 pm
Hi Rex, it is interesting about that study. I have seen other studies suggesting a clear correlation between planning and success.
Maybe it’s a case of statistics can say anything you want them to say.
As Tim Berry says, it’s not about the plan per se, it’s about the planning process. It does force you to think about key issues.
Anita
February 18th, 2008 at 1:44 pm
Thanks for raising this point about business plans, Rex. I’m sure it’s going to lead to lots of debate.
The other thing I’ll point out is that the study referenced in Guy’s blog is based on 116 businesses — a pretty small sample. And it’s also based on those who had formal business education. One could argue that the formal education “filled in the gaps” and ameliorated the need for a formal plan.
It’s not representative of the population as a whole. At least, that’s how I interpret it.
Anita
February 18th, 2008 at 2:52 pm
Thanks, Anita. I’d love to see the studies that you have seen that suggest a clear correlation between startup up business plans and business success. Because I haven’t seen them. And I actively look. I wish there was a correlation — but even if there were, it still wouldn’t prove that having a business plan is the reason a business succeeds.
For a funding source, a business plan proves to the potential investor or lender that the person starting a business has thought through all the factors they’ll encounter. It displays a discipline to think-out and put on paper all the necessary steps one should follow if he or she is to successfully reach some goal.
However, is there a connection between the writing of a business plan — even the execution of a business plan — and the success potential of a startup? Perhaps the answer is so obviously yes that it needs no research to back it up. But all of the research that I’m aware of — and I certainly look forward to seeing the research proving me wrong — find no correlation between the writing of business plan and business success.
The most definitive scholarly work on the topic of new business success is Amar V. Bhide’s The Origin and Evolution of New Businesses in which he analyzed the journey followed by 500 companies that made it onto the Inc. 500 and what factors they share. It’s a thick academic book that is not a how-to or ten-steps guide. But in it, he explores (in rather dense, boring prose) why startups succeed and, well, for those of us who blog, the problem is: There are not top five reasons why startups succeed.
Opportunity comes in many ways. More often than not, success in a business comes from understanding the ins-and-outs of a very narrow niche of a bigger business process. You see an opportunity in doing a small thing — and becoming good at it. You’re likely to sale that service to the company where you used to work who was too big to exploit that very tiny idea: the idea that as a small business person you recognized was big.
It’s been years since I read Bhide’s book, but I recall one of the most universal factors in entrepreneurial success is the ability its founder had to cope with a large degree of uncertainty — I believe he called it “a high threshold of ambiguity.”
Bottomline: I’ve written lots of business plans. I’ve written them for my company and for clients. I’ve received millions of dollars in startup capital based on a plan I’ve written. And the business failed. I’ve been blessed to succeed in businesses that evolved from on-going operations and from doing something I never dreamed could be a business.
February 18th, 2008 at 3:04 pm
Shouldn’t the business plan be a “living” document with new versions
as time goes and the business evolve? Scott Shane has an interesting
tidbit on a study in Sweden from 1998. Only 6 percent of the companies
had created a business plan within the first six months of its
business.
Is a SWOT (Strengths, Weaknesses, Opportunities, Threats)
analysis the best way of cover the the competition? I broke the rule,
stating that we don’t really have competitors due to our unique
combination of common ingredients (café, business services and
community). But we have “competition” due to the fact that potential
customers could use substitutes and their own different settings (work
place and home) is “competing” with our notion of creating a “third
place”…
February 18th, 2008 at 4:00 pm
I agree on the SWOT. Indeed, it was just such a planning session that I was participating in that I mentioned in my earlier post. I fear that my earlier posts may indicate I am not for planning. It’s the document called ‘business plan’ that one prepares for the bank that I’m calling into question. I’m very much an advocate (obsessed even) of constant research, honest assessment and detailed planning. However, I’m a bigger advocate of ‘doing.’
February 19th, 2008 at 4:45 pm
I’m loving this dialogue, we’re getting down to the essentials. Rex, I was squirming a bit with your earlier comments (and thanks Anita for the mention) but with where you are now we’re all getting to the same place. Eisenhower said it: the plan is useless, but planning is essential.
Unfortunately, a lot of us confuse the two. When we’re writing (or commenting) as experts, we don’t want to confuse people. We mean to tell them that the document ought not to be written in stone, or framed, or overemphasized, and we end up with a message that sounds like we’re recommending not planning.
So we can argue about different pieces of research, but is there anybody here who really think businesses are better off without planning?
Great discussion here today.
February 19th, 2008 at 4:47 pm
I have to agree with separating out a business plan from business planning. Too many people get them mixed up into thinking it’s the same thing.
February 19th, 2008 at 5:08 pm
Just to clarify: Everything in this thread that I added was a specific response to the article posted above and the #2 point on it: It reads, “2. Every good business needs a business plan.” If anything I’ve written implies I don’t believe is good planning or seeking all the wisdom necessary before heading off into a mis-direction, I apologize. But I do want to be clear on this. I do not believe that “Every good business needs a business plan.”
Here’s my bottomline:
There’s only one thing a business needs to succeed: More revenues coming in than expenses going out.
However you can get there, have at it.
February 20th, 2008 at 6:32 pm
Most “Business Plans” aren’t. They are Need Money Plans. That’s OK as long as you know that and have a simple, well focused and well considered plan you can bullet point on a 3×5 card. If the core elements exceed that space - nobody will ever remember them. So its essential to get to core focus.
The value is that you can pull out that well-worn 3×5 when faced with a decision or opportunity and quickly bring all the elements into focus. Executing on that decision is another matter. Successful solutions may take considerable planning and analysis, but why waste the time if there is no core “fit”?
Less can be more, if it is internalized and habitual.
March 29th, 2008 at 5:38 pm
Ask someone in the position you aspire to be in whether they had a business plan. Having a plan is different from a formal business plan. I would go with a success plan rather than a business plan. If that’s what you’re looking for anyway.