How to Start a Business When You’re Broke

One of the most common misconceptions when starting a business is that you need to have capital ready. This is not exactly true. There are a lot of CEOs who have risen their net worth to billions who have started with nothing or close to it.

Mark Zuckerberg only had his computer when he started to code the roots of what we know now as Facebook. Ingvar Kamprad only had his bike when he started what will soon be the international brand, Ikea. We’re not saying that what they did was easy. We’re simply saying that starting a business with no money at all is possible.

And today, we are going to share with you the ways on how you can do this yourself.

Apply for a Loan

Once you calculate the cost of starting your business, The first thing that you can do is to apply for a loan. Let’s face it, taking out a loan is one of the fastest ways to get money.

There are different types of loans that one can apply for. A small business loan, for instance, is the perfect choice to launch a startup. We prefer personal loans to start a business with no money, though. The requirements are less, the application is faster, and it’s a smaller amount to pay back if ever things don’t work out. 

Apply for a Grant

Another way to get the money you require to put up your business is to apply for a grant. There are different small business funding programs funded both by the state and non-profit organizations. These programs were specifically founded to help budding entrepreneurs like you and fund ideas and ventures that can potentially change the world and improve the quality of life of consumers.

The process can be quite challenging, though. You need to have a detailed business plan and it must meet certain criteria before it can be even considered. The application might be a tiring procedure but we highly recommend for you to try it out. The rewards are certainly worth it. You see, even if you don’t get accepted, there’s a huge chance for your venture to be referred to other available funding programs.

Launch a Crowdfunding Campaign

Speaking of funding programs, one of the most popular right now is crowdfunding. It is the method of posting your idea on a crowdfunding platform where people can pledge their financial backing online.

There are several big platforms, but one of our favorites has got to be Indiegogo. They offer a flexible funding option that will allow you to get your donations even if you don’t meet your goal as long as it meets the minimum amount of $500.

Like applying for a grant, the process is also a long and tiring one, if not more. That’s because it requires you to do extensive promotions in order to make the most out of it. What we love about this method, however, is that with work comes to reward and there are solid ways to improve the success of your campaign. Here are some of them:

  • Create and post a high-quality video to promote and pitch your business idea.
  • Write a compelling story that motivates people to pledge for your project.
  • Boost the online reputation of your brand and get your crowdfunding link posted in as many places as possible.
  • Have social media influencers believe and promote your campaign. 
  • Don’t forget to promote your crowdfunding campaign to your friends and family as well. They are potentially your biggest supporters.
  • Finally, you can offer rewards to motivate your donors. Just make sure that you will be able to live up to your word and fulfill them. 

Save Up for It

If you sincerely think that you can’t start the first steps of your business operations without funding or you find that applying for a grant or running a crowdfunding campaign is too much of a hassle for you right now (this is especially true for those who are employed), and starting your business with a loan is out of the question for you, then there really is no other way than to save up for it. 

Set aside a percentage of your current income and put it in a savings account intended to serve as your capital in the future. In fact, label your passbook with the logo and name of your brand for further motivation.

starting a business when youre broke

Fund It with Your Day Job

Since we are talking about your current income now, why should you wait for a savings account to grow if you can already put this growth towards the business itself? You don’t need to set everything up from the get-go. You can build your business little by little. 

Determine what kind of business you want to start: are you planning to offer a service? Are you thinking of developing a new product or concept? Service-oriented businesses are the easiest to start. All you really need is the proper skills to provide this service and you can begin doing so. You can simply acquire and improve your gear later on.

Product-based businesses, however, are different. You will need raw materials or ready-made products to sell or resell respectively. But even this type of business can be started small. Going back to Kamprad, he started his mail-order business with just his bike.

He didn’t start Ikea as big as the company that we know today. He started small, with a few products first, then simply expanding later on. This is certainly doable and can be paid for with your wages, and if not, then you can take on side hustles to fund it. 

So you see, there are actually quite a number of ways that you can take to start your business even without the funds. 

The Bottom Line

We’re not saying that starting a business on limited funds is ever easy. It is significantly harder to start from the ground up than it is if you already have a solid foundation to work with. Your replacing money with sweat as an initial investment, after all.

Expect that there are going to be a lot of tired and sleepless nights ahead. But they are going to be inspired ones. There are going to be a lot of roadblocks and hurdles. But overcoming each of them will bring a greater sense of fulfillment. There are going to be naysayers. But you will also meet a lot of people who will help you and get inspired by you along the way.

Being an entrepreneur is no easy feat, but the rewards are going to be worth it. In the end, you’ll only really need two things: creativity and perseverance. The mind to think out of the box and the heart to withstand the failures and turn them into successes. We wish you all the best!