An unstable job market with random pay cuts is the reality of the present pandemic situation. Many have already lost their jobs and staring at an uncertain future. It is quite clear that this employment crisis won’t go away anytime soon! This is why many have started exploring ways to become an entrepreneur with no money!
Here in this article, I am going to explain step-by-step, how to become an entrepreneur without investing a huge sum of money. But before that let’s answer a few important questions.
What Does it Take To Become an Entrepreneur With No Money?
Ask yourself these questions:
“Am I ready to take high risks?”
“Can I build something which is really innovative?”
“Do I know any unique problem and offer an efficient solution for it?”
If you have read the rags-to-riches stories of famous entrepreneurs like Andrew Carnegie or Oprah Winfrey, then by now you must know that entrepreneurship doesn’t need money or experience. It is all about your ability to identify problems and offer a quick solution. And while implementing your business idea, you should be prepared to take risks!
It is not necessary that you have to invent something big. You can look for small day-to-day problems which can be removed or minimized by applying cost-effective yet smart solutions.
Now that you have a basic idea about entrepreneurship, let’s explain the 9 steps to becoming an entrepreneur with no money.
Identify Your Niche – The Primary Step to Become An Entrepreneur With No Money
This is the first and most important step to starting your entrepreneurship journey. I know many people, who have this dream of becoming entrepreneurs. And yet they have little idea of the industry or niche to get involved.
Ideally speaking, you should choose a niche that you know well or have years of experience serving that industry. Since your aim is to become an entrepreneur with no money, you should target service-based industries rather than manufacturing.
For instance, you can consider starting a home decoration and remodeling business, if you have worked in this field, for at least 2 to 3 years.
If you have years of experience in a specific niche, then it can really help kickstart your entrepreneurship journey.
Now, what if you don’t have any experience and yet want to start a business?
Yes, you can, provided you are in absolute love with the niche and have good knowledge about it. For instance, if you are a good cook with lots of unique recipes at your disposal, you can consider starting a food business.
Remember, entrepreneurship is not only about making money. To sustain your business and stay motivated, you need to have a purpose and passion for it.
Conduct a Detailed Market Research Targeting Your Segment
This is when most aspiring entrepreneurs fail!
Apparently, it might sound easy, but practically you may find it tough to carry out thorough market research which targets your potential customers. And yet, this step is very crucial to find out if there is at all a demand for your niche in the market that you plan to target.
Let’s explain with an example. Suppose you aim to start a breakfast delivery service in your locality, which targets young professionals and students. So, you need to find out if this locality is indeed a good choice to start such a service? Do you have competitors already offering similar services and making a good profit out of it?
Can you find out if your competitor’s customers are happy with the food quality, price, and service? Or perhaps your competitors have a few weaknesses e.g. limited menu or daily payment option only, which customers don’t find quite convenient?
If you can find answers to these basic questions, then you have successfully completed the market research and are now ready to move to the next level!
Gather Knowledge, Educate Yourself and Stay Informed
If you plan to become an entrepreneur with no money, then the one thing you simply can’t ignore is “education!”
You might be in a hurry to embark on an exciting entrepreneurship journey because you have heard entrepreneurship has nothing to do with a college degree. But remember without proper education in your relevant industry your efforts will go in vain.
According to research done by a team from Akron, Duke, and Southern California states, more than 90% of entrepreneurs engaged in high-growth industries, have completed their graduation.
Let me explain with a simple example, why education is so important in entrepreneurship.
Suppose you plan to start a vehicle repair shop. In that case, you definitely need to have detailed knowledge about every aspect of vehicle repair. Otherwise, hiring an auto mechanic for your small setup might turn out to be too expensive an affair! The same applies to every field, be it running a food business or a fashion boutique.
And then it is not only about acquiring knowledge in your specific industry. To reduce business expenses, you should have a basic idea about many other aspects e.g. business promotion, marketing & customer retention, billing and invoicing, and so on. If you are leading a small team, then you should know how to motivate your employees and appreciate their efforts now and then.
What Are the Absolute Necessary Skills of an Entrepreneur?
1. Be aware of your own skills and abilities. Have a clear idea about what you can do and what you can’t! And then you should be ready to acknowledge the gaps and fill them by acquiring the skills. Else you can look for trusted partners who have skills that you don’t have.
2. Be open to relationship building. Remember, starting a business is never a solo activity. Even if you are a small entrepreneur, you need the help of contractors, vendors, investors, partners, family members, and friends. As such, you need to understand how to build strong relationships with people who can help you achieve your vision. This is one skill you can learn to acquire, irrespective of your personality type.
3. Know how to motivate others. You don’t need to be super-smart or charismatic to motivate. Instead, you should know how to make people feel good, confident, and comfortable while working for/with you.
4. Be ready to scale. The problems and the approaches that you faced initially will change as you scale your business operations to cater to more customers and deliver more efficiently. As a leader, you should have a clear idea, about how to guide your team through these transitions. You should also know how to overcome any resistance since your team has already gotten accustomed to a certain way of working.
How to Make the Most of Resources Available – A Key Criteria to Become an Entrepreneur With No Money
Look around and find out what resources you already have, which can be used to start your own business. To begin with, you can use a spare room, garage space, or even a corner of a large room to set up an office from home. If none of this is available, even a garden shed can serve the purpose.
For office furniture and decoration, look for items that you might have discarded recently, e.g. a worn-out pool table, chest of drawers, lampshade, wall lights, etc. With a little bit of modification, your existing furniture items can be used to decorate the home office. Else, there’s always this option to rent certain items.
And definitely, to run a business, you need a stable and dedicated internet connection. Talk to your internet service provider, whether they can offer a discount if you apply for a second connection for your office.
Look for Meaningful Business Association or Co-partnership
Depending on the type of business you plan to start without money, you need to build up a strong business association with other business owners, vendors, wholesale suppliers, investors, etc. Even better if you can find a co-partner who matches your passion and believes in your startup idea.
Let me explain this point, with the above example of starting a breakfast delivery service. For this business setup, you need a steady supply of grocery and poultry items. Now that you are not in a position to buy in bulk, the best thing you can do is approach the local grocery stores or wholesalers to work out some trade credit terms. This simply means, the supplier will supply necessary food items without upfront payment, but both the parties have to follow the business credit terms.
However, young entrepreneurs often fail to understand the pros and cons of trade credit which can ultimately lead to a huge financial burden.
Further, to become an entrepreneur with no money to invest, you have to be really serious about networking. Check out this article to know how to use networking to grow your small business fast.
Use Social Media to Create Value for Customers
Don’t expect customers to flock to your store, simply because you are offering something exclusive and cheap. They won’t buy from you, because they don’t KNOW you, it’s as simple as that!
This is why, initially, you have to make extra efforts to SHOW them the “value!” And this can be best done through different social media platforms.
Most successful businesses have a strong social media presence, and they take it quite seriously. They keep creating value for customers with quality content, e.g. free eBooks, informative videos, Q&As, customer polls. deals and discounts (offered on social media only). If you want to be successful too, you need to follow in their footsteps and work out an effective social media strategy.
Try to educate, inform and engage customers with interesting posts, videos, free consulting sessions, webinars, etc. This way you can establish yourself as an expert in your respective fields. Also, you can use social media platforms to announce special deals and make them available to your Facebook, LinkedIn, Twitter, or Insta followers only.
As people start noticing your consistent social media presence, it helps build trust. And this ultimately prompts them to buy your product/service.
Look For Ways to Fund Your Business From Outside Sources – An Important Step to Become an Entrepreneur With No Money!
A business needs money and you can’t deny the fact! However, as you plan to become an entrepreneur with no money, you have to look for some funding sources, beyond your own bank account.
And you will be amazed to know there are many trusted ways to raise funds for your business without applying for a business loan. Here in this article, you can find seven ways to fund a small business without the bank loan burden.
No matter how low-cost your business is, having a few funding options available can be really assuring. This way you can take some calculated risks while pursuing your business goal.
Be Ready to Take Risks
As an entrepreneur, you can’t play a safe game. You should be mentally prepared to accept failure and yet not give up without trying!
In this regard, I would like to mention a very famous quote from Mark Zuckerberg, “The biggest risk is not taking any risk.”
Simply speaking, as an entrepreneur you should be willing to do something about which you are not really ready. This is the secret of learning and growing a business. And at the same time, make sure your failure leads to a totally new understanding of the situation.
While taking risks in business, you should assess the potential outcome and keep a contingency plan ready, just in case!
So, exactly how do you take a risk in business? Find the answer here.
And Finally, Complete the Legal Formalities to Incorporate Your Business
If you are serious about entrepreneurship, then it is advised that you don’t skip this step. In case you don’t know, what incorporation is, it is the process of organizing your business legally and officially.
Without incorporation, no one will take your business seriously. Your vendors might not be willing to allow a trade credit. Then there are investors and lenders who are interested in working with an established business entity only.
So, yes, if you plan to become an entrepreneur with no money, you have to put aside a minimum of $100 for the entire incorporation procedure. However, this cost depends on your particular country and State, the type of business you plan to set up, and the authorized capital.
For instance, if you are setting up a small business in India as a sole proprietor, the business registration cost is around Rs.2500/. However, forming an LLC is the best way to protect your business from legal and operational worries. And then if you want to hire a legal professional for the process, he/she will charge you separately to complete the entire process.
Many are tempted to become entrepreneurs because they believe it is the easiest route to make money while being their own boss! But let me warn you, entrepreneurship can be stressful and lonely, as the rewards come much later. However, you can become a successful entrepreneur without money, if you follow the above steps to lay the groundwork for an exciting and rewarding entrepreneurial journey!