I often receive emails from those of you who want to start businesses with no money. Often, you want to start a business from home to make a little extra cash. It would be nice if it turned into a million-dollar moneymaker, but it doesn’t have to. Your goal is to explore a passion of yours and make a bit of money on the side…but you have no money to invest.
Typically, two major obstacles come up: time and money. I addressed time previously. Now I’d like to address how to start a business with no money.
First: Two Major Misconceptions
Let’s clear up a major misconception: It doesn’t take a lot of money to start a business — even a million-dollar one. I started my business just after quitting a job, with a few thousand dollars of severance pay from my job. The year after that, my parents gave me a $15,000 loan so I could expand my business. So I “started” my business with just over $20,000.
On the other hand, let’s clear up another common misconception: Businesses that are good ideas don’t necessarily blossom into multi-million dollar enterprises right away. In fact, in May 2003, nearly two years after I started my business, and 8 months after I received the $15,000 loan from my parents, my business made a whopping total of $461/month in revenue. I could have made more money by consulting!
But I wasn’t discouraged. I could see that our revenue graph was going straight up. My customers really liked me. I was making a difference in their lives by running a web hosting company whose owner actually cared about who they were and what sort of business they ran. I knew I was in the right place, in a growing market. So I stuck with it.
It took six long years for my hunch–that web hosting wasn’t dead–to be validated, but I stuck with it and achieved success.
How can you do the same thing (with no money)?
The Four Values that are the Core of my Success
- I worked every single day on my business. I’ve learned a key lesson when it comes to setting priorities: The night before, decide what one thing you can do on your business the next ay that will make you feel proud and accomplished to have performed it. It doesn’t have to be a lengthy task. For instance, one of my goals is to write a new blog post every week. This doesn’t always happen, but when I write a blog post, I consider that an accomplishment. With every post, I am building my personal brand, my subscribers, and I am getting recognition from other hard-working bloggers who enjoy my post. That’s enough for me to continue blogging. I consider every day which activities I can do to give me this feeling of accomplishment, and then I do those things — and ignore email, Twitter, and TV until they’re done!
- I set goals and hit them. You see my strong goal-setting mentality on this blog, as well. To engage goals for yourself, make your goals public. Also, the more specific your goals are, the better. Right now, my biggest financial goal is to have $1 million a year in passive income by the time I’m 30. Having that goal has helped me align myself with the resources I need to achieve it. Set specific and measurable goals, and set them publicly. Write a blog. Send your goals to your friends and ask them to kick your butt about them! Keep track of your progress. Figure out why you hit the milestones — or didn’t hit them. Just the act of writing down specific, time-based goals makes you much more likely to achieve them.
- I ignored lures of “instant riches.” Running a business takes a strong commitment. That’s why many “how to start a business” books emphasize starting a business in a field you’re passionate about, instead of starting something just for the financial gains. I enjoyed web hosting and technology, but what I enjoyed most was seeing those revenue graphs go up and the feeling of pride I got when happy customers sent me a thank-you letter. No “get rich quick” scheme will give you that same feeling of deep satisfaction. Stop flipping from one business idea to the next. Pick one, settle down, and make it work…even if it takes years for you to be able to quit your day job.
- I stopped listening to those who told me it couldn’t be done. Everyone has fears, and people enjoy bringing you down to their level. When I started my web hosting company, a friend was convinced I’d fail. Even years later, he denigrated my choice to run a web hosting business, asking me at one point: “What have you done? Pfft. You started a hosting company. Anyone can do that.” I dug a bit deeper, though, and found out the real reason he was downplaying my achievement: He had started a web hosting company around the same time as mine, and it had gone nowhere. He assumed, then, that since his hosting company was not successful, mine would never be. By acknowledging my success, he would have to acknowledge his own failure, and that was painful. (By the way, the story ends well: we are still friends today.) Who in your life is telling you you will fail? What fears of theirs are really hiding behind their words? Most importantly, why are you letting those other people dictate your success or failure?
Interestingly enough, when I outlined my plan for Inspiring Innovators to another friend of mine, he said words quite reminiscent of my friend who started the web hosting company that fizzled. I asked him why, and he admitted he had owned a content-driven membership site that had failed. “The customers didn’t stick around,” he said. I acknowledged to him that my business plan may change, but I’m also not listening to his predictions of failure for my business! I’m quite confident I will succeed, even if the game changes a bit along the way.
Notice, that among these traits (determination, persistence, specific and measurable goal-setting, and a willingness to challenge others’ beliefs), “money” is not mentioned. Neither is time. If you have the drive, the determination, and the willingness to succeed, you are much more likely to succeed - regardless of how much money you start out with.
How do you get started? That’s a forthcoming post. Please subscribe to see my ideas on how to get started creating a million-dollar business (or just a business that will earn you a little extra cash) from home. As always, I promise to be honest and blunt in my appraisals of many ways to “make money online.”
Recommended Reading:
- Steven Wagenheim’s Honest Income Program. Don’t know where to start? Steven guarantees that you’ll make your first $15 online after reading his ebook. I bought it and devoured it. It’s one of the best “getting started” guides I’ve ever read on Internet marketing. As an added bonus, Steven is a heck of an honest guy himself, and not interested in scummy Internet marketing “systems.” Well worth the money.
- How To Make A Million Dollars. My earlier blog post emphasizes some of these same keys, as well as going into detail about negotiating and “multiple streams of income”.
- Three Business Ideas That Will Help You Thrive During a Recession. What if the upcoming recession is an opportunity for you to make more money than you are now — and be happier to boot? Specific details about what types of businesses you can start that will benefit from a recession.
- How To Make Money From Your Blog. Steve Pavlina details how he turned a $9 investment (in a domain name) into over $40,000 a month in revenue. (Hint: Not instantly!)
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September 23rd, 2008 at 11:27 pm
#1 is a big one.
I’m convinced most of my success with my sites and blogging is due to the sticking-with-it-factor. So many people spend so much time (and money) jumping from system to system.
I’ve read Steve Pavlina’s article before, and he’s a great example of someone who has broken a lot of the rules of blogging and still (perhaps in spite of it) become very successful.
September 24th, 2008 at 2:40 am
The most important is #1 point: work, work and once again work. Everything is possible with hard work.
Very important is also to … stop flipping from one business idea to the next and pick the best one, and make it work…
September 24th, 2008 at 10:01 am
Just found your blog…loved it already!
But I do have an issue with the “How to start a business with no money”
You said you started yours with little more than $20K, which, for me, is a lot of money!
Is $20K really no money when it comes to start a business?
My question does not mean to be sarcastic - but I honestly would like to know if that’s what you mean by “no money”
Thank you.
Andre
September 24th, 2008 at 10:32 am
Most businesses take time to build. You need to focus on one business. Learn as much as you can about it and then work on the formula that will make the business successful.
To many people are trying to get rich quick and when it doesn’t work in 6 months or less they jump to another business.
September 24th, 2008 at 3:48 pm
I had to smile when I read stick with it phrase–I tell my kids that the number one verb in my vocabulary which has helped me negotiate with creditors for $106,000 debt, refinance a mortgage (court ordered) of $175,000 (with no job at the time); finish special education teacher certification and now reopen the bed and breakfast and work part time with an asperger’s student is called:
stickwithitness–aka never give up
Thank you for your web site
September 24th, 2008 at 4:21 pm
#1 and #2 resonate with me. The importance of working everyday at your business, chipping away at it is priceless. Keep moving forward even if it’s baby steps, that keeps you motivated and provides the foundation to building a successful business. Also, I’m big on goal setting I like the sense of accomplishment in setting goals and hitting them, no matter how small they may seem.
One last point is that a key component to your business never cost any money, and that is the thinking and planning you do. Even if you don’t have a dime you can plan, and think of the best way to do business so that you are ready to hit the ground running when you have the funding.
Great post, thanks!
Matt
September 25th, 2008 at 8:39 am
Thanks Erica, I want to begin using your suggestions of writing at night my to do list for the following day and to begin 15 minutes earlier each day to check emails. I am very weak on setting goals so Matt’s response was helpful.
Judy.
September 25th, 2008 at 3:28 pm
I like #4. It’s often discouraging when people don’t think you can do something. Frankly, you can do anything you put your mind to and we shouldn’t let anyone tell us otherwise.
September 25th, 2008 at 10:51 pm
Hi all,
Thank you for your excellent comments!
I do believe sticking to an idea is one important quality for any successful entrepreneur. Brian over at Start Breaking Free has an excellent article up about this called “Never Stop Testing”: http://www.startbreakingfree.com/403/the-evolution-of-a-business-model-never-stop-testing/
I think so many people give up when they don’t make it right away. Most bloggers quit after 6 months. 6 months after I redesigned this blog as erica.biz, I was just getting started! Don’t give up. Things really start to happen once you are a year or two into a project. It will take years for you to become a millionaire. But is it worth it? YES!
-Erica
September 26th, 2008 at 6:50 pm
Starting a business with very little money is not too difficult. Paying the rent with the proceeds is a bit more difficult…
One rule of thumb that I am using to bootstrap a venture is to have the venture self-funding. If it can’t make enough money to pay for itself pretty quick, throwing more money at it probably isn’t going to work real well. Obviously, this means avoiding debt. The rate at which this venture is growing is now dependent on sales, a very high quality problem indeed.
One thing I learned from a different field is don’t just start one business, start three or four! Sure, you will be busy as hell, but you will also not waste time doing things that don’t matter. And there is a fair amount of overlap on the operations side anyway. Doing the books for several small businesses may not be that much more work than doing books for one, especially when the hardest part is finding the time to sit down and actually do the books at all.
September 28th, 2008 at 2:18 pm
Anyone who has started their own mental health private practice? This is my fifth year and would like to hear successful strategies from others.
September 30th, 2008 at 8:16 am
Hi Erica, my first time on your blog (referenced from a comment post you made over at Lazy Man).
Nice stuff. Congrats on your hosting business and achieving your goals!
October 2nd, 2008 at 7:34 pm
Nice post. About five months ago I started looking for way to earn extra money online and boy what I found was amazing, all the scams out there. After weeding though them all I managed to find a site [deleted] that is upfront on the time that it takes to get a business started online. His book goes into great detail on different types of business you can start online. I took one of his ideas and been working at it for about six weeks and I’m starting to see a little income from it. Your point about not giving up is a great point. People have to remember when starting a business online or any business for that matter, you will not get rich overnight.
October 6th, 2008 at 12:18 pm
I am a professional balloon artist. A number of personal finance bloggers interviewed me on how people can earn fast cash if they have a creative streak.
Click on my name to read one of such interviews where I go step by step on how you can earn money as a balloon artist or a face painter.
You can be working full time and do it on the weekends. You can be a stay at home mom and take your kids along.
You can start with investment of $20, it will buy you a bag of balloons and a pump. You can spend a few hours learning how to twist balloon animals and.. read the rest on my blog…
I am a full time event entertainer because I enjoy it, but many people can earn a very healthy part time income without dropping their other pursuits.
October 30th, 2008 at 6:14 am
I just entered to thank you on this great website and to tell go a head. you will make your 1 million in no time
god speed