Imagine if you woke up tomorrow with no money and no business. What would be your first steps to start building a profitable online business?
Perhaps for some of you, this might not be that hard to imagine.
Today, I would like to answer this hypothetical question: “What would I do if I were starting over today with no money and no existing business?”
How To Start A Business From Scratch
Believe it or not, this question isn't that hard for me to answer. I boot strapped all my own business ventures, and a decade ago, I really had no money to speak of to kick things off.
So, let's jump right into it: here's what I would do to start a business with no money.
I Would NOT…
If I was considering a brand new business, and I had not run any previous successful ventures, I would not seek outside funding.
In other words, I would NOT:
- Borrow money from family and friends
- Get a loan
- Self-fund through credit cards, or other types of debt
- Break open my kids piggy bank with a sledgehammer
- Rob the mini-mart
If you have savings…great! You can use your own savings if you want to fund your own business. However, this discussion is for people that don't have any savings to speak of…now what?
Building A Business With No Money: Take The Stairs
We've all been there. No money in the bank, and your day job is barely covering expenses. How in the world are you supposed to start a business empire?!
Well, you need to start small and grow from there. You need to take the stair step approach.
In other words, you need to find some way that you can bring EXTRA money in the door without investing money that you don't have. Only once you have some seed money (even $500 can be considered enough seed money in some cases), can you then invest more into your business idea.
Here's a few ways that you can bring in extra money each month, outside of your full-time job:
- Consulting. This is actually how I earned my first $600 that went into investing in my niche site business…which eventually turned into a full-time six figure business for me. I built a simple WordPress website for a local accountant and he paid me $600 for my time.
- Writing. Thousands of jobs are posted almost daily by people looking for someone to write for their websites. Textbroker.com and Upwork.com are just a couple of places you can get hired to write for other websites (there are MANY others).
- Fiverr.com. You can do all sorts of “gigs” on Fiverr.com. This could be anything from graphic design to voiceovers, or even singing happy birthday to someone. Matthew Woodward has written a great guide on making a few bucks on Fiverr here.
- Freelancing. Between Upwork, Fiverr.com, Freelancer.com, Guru.com, and many others, you can find all sorts of people looking to hire freelance workers.
- Udemy. If you have a microphone, video editing software, and something you can teach; then you can likely create a course and sell it on Udemy without investing any money.
- Garage Sale.
- Work extra hours at your current job.
- Get a second job.
- Budget and save. You might not need to do anything else other than start living on less than you make for a few months until you have your small nest-egg that you can invest in your next business.
- Other Side Hustles. There are tons of other ways that you can make money on the “side”. Nick Loper has a great article where he lists 99 side hustle ideas.
The one thing that you notice about most of these ideas is that you will be trading your time for money. Ideally, you can get away from trading your time for money as soon as possible and move on to building a business that works whether or not you are working.
Once you have some seed money, you can then step up your business.
The Next Step Up…
After I did one consulting gig and made $600, I decided that I never wanted to do consulting again. So, I took that $600 and invested it into building out niche websites.
I then took some of the money I made from niche websites, and started Long Tail Pro.
Along the way, I've taken some of the income from Long Tail Pro and invested in other websites, Amazon FBA products, and other business ventures (some have failed and some have not).
I now have a few revenue streams and a nest egg that I can use to invest in future ideas that I will surely have. I've never borrowed any money or gone in debt to grow my businesses.
This is the exact same approach that I would take if I were to start over again.
Take your $500, $1000, or $10,000 that you have and build a business that has more potential than a one-time or short term freelancing gig. What business idea to invest in is really up to you at this point, but your first business venture should probably be something small that you can quickly see returns on.
What you start could be a number of things:
- A small blog or niche website
- A WordPress plugin
- An ebook
- A video course
- A small software application
- A mobile app
- A physical product idea
- many others…
The key advice that I would give at this step, is that I would start small. Again, I would not invest my life savings into something; especially if you have never started a business before.
Rob Walling actually wrote a great article about this type of stair step approach and shared some great examples of people launching simple products.
The Grand Finale…Kinda…
Once you've launched your first product; hopefully, you will start seeing some money come in the door whether or not you are working. If you have the right systems in place (pretty easy to do online these days), people will be buying your product or software whether or not you are at your computer.
This first product still might not be enough to quit your full-time job yet. So, you need another step up.
For your next step, you may decide to go a bit bigger. Create a new software (or website or other product), that has a bit more market potential. Find an idea that you think can make you a full-time entrepreneur and go for it!
You now have money to invest (because you've been smart about saving the extra income from your first venture instead of blowing it on a new car or eating out at the Cheescake Factory every night).
Take that money and invest in something bigger, or perhaps invest in multiple “small” ideas. The key now is to learn from the mistakes that you've surely made on your first venture and you should have more success in your next one.
This new business could be your grand finale! The one that allows you to quit your job and feel comfortable super sizing that drink without even batting an eye. Congrats!
Or you might just become a serial entrepreneur that enjoys the constant challenge and excitement that comes with launching additional ventures down the road.
How To Start Your Business With No Money
Wherever you're at on the business staircase, there are a few steps you can take to get started or improve your current position.
Find Your Business Idea – Help Someone Out
Here's something that's free and will help your business grow forever.
Your first step in starting your business on a budget is to find your business idea. This should not be based on your passion. Instead, it should be based on what someone needs.
Here's an example. Let's say that your passion is a coffee shop. You've always wanted to start one and a building in town just came up for rent. It's in the perfect location, the rent isn't too high, and you think that you can make a go of it.
But there's already a Starbucks down the road and two other coffee shops within a few miles of you.
Do you think there's a need there?
No. There isn't.
But what if those coffee shops could get fresher, better-tasting coffee beans faster than from their suppliers? Now you've found a real need.
Your business idea shouldn't be based on your passion, but on what the world needs. The accountant I mentioned needed a website. I didn't enjoy building websites for others (and didn't do it more than once) but that's what he needed. He paid me, and I used that money to start my successful businesses.
To find what people need, listen to the language of pain:
- “I wish that…”
- “It's so inconvenient when…”
- “I hate…”
When you hear things like this, that is someone who is begging for a solution. They want a faster, easier way of solving their problem.
So get on out there, tiger. Start by forming a list of ideas for needs that have to be solved.
Execute, Execute, Execute
Now that you have your need-solving business idea, it's time to execute.
And the number one thing that separates awesome businesses from failed businesses is the execution. I know how it is: you start off so excited and thrilled about your new business. Things are going to go so well, you just know it. You picture how it's going to look years down the road.
And then three months later, you're worn out, tired of trying, and feeling like you don't have anything left. You're discouraged. The fire is out.
Here's some advice: consistency is more important than intensity.
It's more important that you do a little bit of work every day than that you spend one month and go all out. Consistent work over time beats extreme work over a short period of time. Feel free to give it your all, but don't do so in a way that leaves you tired and frustrated.
It's better to work a little bit every day. Don't wear yourself out. Remember that we're in this for the long haul; you want your business to be standing 5 years from now.
Consistent effort is key.
Remember, Patience is a Virtue
None of this comes easy or quick. You can't simply start with nothing in the bank and expect to be quitting your job 3 months later. It just doesn't happen that way.
For me, I struggled to find my right “niche” for about six years before I quit my job. I launched several ventures that never worked out. I stayed up late writing articles for websites that totally flopped.
However, I stuck with it until I started seeing some initial success. Once I saw some success with my niche websites, I doubled down on that approach and turned it into a full-time gig on March 11th, 2011 when I quit my job as a business banker.
It's now been nearly 6 years since I quit my job back in 2011, and the pain and frustration I felt before I quit my job isn't as fresh anymore, but boy am I glad I went through all of that!
I've learned some valuable lessons, and now I'm lucky enough to have built and sold a very successful software company and currently sell several successful products on Amazon. (I also have a few other websites that I work on as well).
So, just remember that patience is truly a virtue. Those that are willing to patiently and consistently think through their potential business problems are the ones that are likely to eventually succeed in starting a business with little or no money.
This could take you years, but it's better than the alternative in my opinion.
Sure, you could keep working a job that you only occasionally care about. And that's pretty much the worst case scenario in this stair step approach. If you fail, you still have your job.
If you DON'T take the stair step approach, you might take your live savings, quit your job, and borrow a bunch of money from the bank. If your big idea fails at that point, well, you are MUCH worse off than if you had taken the approach that I recommend here.
So, now it's up to you. What will be your first step?