With little help from a seemingly stagnant unemployment rate and recent graduates flooding an already meek job market, more people are turning to entrepreneurship to gain control of their financial future.
Starting a new business comes with various challenges, amongst them being access to capital. Seeking a sufficient amount of financing to launch an early-stage startup and support your business goals is essential to long-term success. But, if you have limited access to funds — where can you start?
Here are five ways to start a business with little to no money in the bank:
1. Partner Up
Determine your business’s niche or specialty and develop a partnership with an already existing company that your business can compliment. For example, a graphic/web designer can align itself with a marketing company to enhance packages for potential marketing clients. This gives you the ability to leverage a pre-existing infrastructure and to add value to another company as you grow your own.
If you’re working with tangible products, a startup can eliminate the need for capital by outsourcing products on a per-use basis. A company can wait until their product is purchased and then use that money to then manufacture the product.
If you decide to go this route, ensure that you have a plan in place to manage the balancing act associated with sales, inventory management and receivables.
3. Offer A Service
A great way to start a business without cash flow is to open a service-based business.
Consultants and brokers have little need for office space and even less need for products that require manufacturing and added overhead costs, leaving them with a company based solely on their expertise.
4. Pitch Angel Investors
Sift through your network and look for financial backers who can help jump start your business. Many angel investors, super angels and VC’s tend to invest in promising small business ideas and founders — often helping an entrepreneur get started and providing guidance along the way. But before you decide to raise funds, consider if bootstrapping is a better option.
Crowdfunding websites such as Kickstarter and Chipin offer an accessible and low to no-cost entry platform to fund projects. These types of communities have made themselves quite valuable in today’s growing “Mom and Pop” market.
With a short profile video describing your business idea and fun perks for potential donors, entrepreneurs have a platform to raise funds without giving up control or equity in their ventures.
Photo Credit: Gant
John Cerasani is the President of Northwest Comprehensive, Inc, a Chicago-based Health and Welfare Insurance Brokerage firm and works with small to mid-sized employers nationwide. Cerasani is also the creator and author of Paid Training, a platform that is ideal for anyone who has considered becoming a business owner.