You may have a good idea for a business -- but not the cash to back it up. How can you get your new business off the ground?
Contrary to popular belief, you don't need a huge outlay of cash -- or any cash at all -- to launch a business. Here's how to bootstrap your way to entrepreneurship:
- Stay at home. Renting office space is expensive -- and unnecessary -- during the first few months of a new business. If your home is not conducive to concentration, create a movable office by working in coffee shops or other locations with free wi-fi. For professional meeting arrangements, pick a reasonably priced, but nice, restaurant for lunch. If you absolutely need an office, see if your town or city's economic development office provides low-rent incubator space for new businesses.
- Go solo. Hiring employees is another expense you can avoid in the start up phase of your business. If you don't have cash to hire experts, but desperately need a graphic artist, writer or web designer, see if there is a pool of students you can draw from a local college or university internship program. Or, learn to do it yourself until you are making enough money in your business to hire a professional.
- Get free advice. Tap into the resources of SCORE (www.score.org) for a wealth of free insight from retired professionals. You can also surf the Internet for business advice through articles, blogs, groups and business networking communities such as LinkedIn.
- Learn financials. It is helpful to know how to read financial statements even if you plan on hiring a bookkeeper or accountant when your business takes off. Learn the basics of balance sheets and income statements. Take a QuickBooks class at your community college, or self educate through the web. For a primer on financial statements, visit the this Small Business Administration's page.
- Go viral. Once you have a website, start a page on Facebook and sign up for Twitter. Let all your friends, neighbors and family know you have started a business (and include a link to your site); encourage them to forward the news on to their friends and business associates.
- Become your own PR person. Learn the basics of writing a press release and send out an announcement to your local newspaper and trade publication about your new business. Post helpful advice (just don't blatantly self promote) on blogs or online networking groups about your area of expertise.
- Don't quit your day job. While it's hard work, you can launch a new business while still working at a full-time job since it's a good idea to have a revenue source to keep a positive household cash flow. You will be doing a lot of research and laying groundwork your first few months anyway, so you might as well keep earning a paycheck. The second best option is to have several month's salary tucked away to tide you over until you start earning money from your new business.
A shoestring budget does make launching a new endeavor more challenging. But remember these frugality lessons will pay off in creating a sustainable company once your business starts making money.