Startup entrepreneurs of often let a lack of money hold them back. Today, we’ll share 3 ways to get started when you don’t have enough money.
Click the player to listen to this episode of The BIGG Success Show Podcast. Below is a summary of our discussion.
As entrepreneurs, we often let ourselves be held back by the perception that we have a lack of money, and you may sit on an idea waiting for years waiting to get the money saved up. A better idea is to ask yourself the question, “How can I get started?”
A leading authority on this very subject talked with us on podcast episode #962. Maria, Aspan, author of Startup Money Made Easy,* told us technology has drastically reduced the cost of starting a business. According to a study that done in 2008, the average business needed around $31,000 to start a business. But in the 2018, Inc. 5000 survey, 42% of CEOs said their startup costs were less than $5,000.
Let’s go to The Professor’s Whiteboard for 3 things to do if you don’t have enough money to start your business.
1) Save your own money
If you’re not saving already, how can you start putting away a little bit of money to start a business? How much do you need to save? These are questions that you want to look at.
Don’t just assume that your startup money has to come from other people, because those other people are going to want to see you’re invested. Every banker I know and every venture capitalist I know, always talk about you having skin in the game.
How bad do you want to start your own business? If you want it bad enough, you’re gonna find a way to do it. It’s all about prioritization.
2) Reduce your startup costs
That reminds me of one of one of my best students ever. He started a business and is now a multi-millionaire. He says one of the most valuable questions I told him to ask was, how can I start with no money? Challenge the idea that you have to start with a lot of of money. Find ways to reduce the amount of money you need.
In the podcast, “The Professor” shares how the founder of Jimmy John’s told his class how he reduced startup costs. What’s interesting, is that this also made him change the business model! Listen starting at: 3:30.
I regards to your startup, keep this in mind…when you use less money to get started, you’re taking less risk, so there’s less to lose in case it doesn’t go the way you hope.
3) Find a partner
If you don’t have enough money to start your business, find a partner that has money!
Keep in mind that when you’re dealing with this, you will need to figure out the terms. For example, you may partner with an angel investor, who provides the funds to cover the startup costs. You might agree to a profit split of 80/20 (with the investor getting 80% and you getting 20%) until the money is paid back. Then flip it, you get 80% and your partner gets 20%. At some point you may buy your partner out.
This is just a great example of how an angel and an entrepreneur could work together to start a business in a very friendly way, and in a very potentially prosperous way for both people.
Successful entrepreneurs are absolute masters at minimizing risk. Two of the ways they do that is by reducing the need for money, or sharing the risk with others (the second and third points that we made.)
So don’t let the lack of money keep you from starting a business. Let it inspire you to get creative with your funding that leads to BIGG success!
George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success
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