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 money maker, 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:
- 20 Ways to Make $100 A Day Online. You CAN make money online without being a geek! This is a comprehensive, 247-page guide to making your first dollar online. 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, it’s written by top Internet marketing experts, not scammers. Well worth the price.
- 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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23. September 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.
24. September 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…
24. September 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
24. September 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.
24. September 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
24. September 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
25. September 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.
25. September 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.
25. September 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
26. September 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.
28. September 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.
30. September 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!
2. October 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.
6. October 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.
30. October 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
9. January 2009 at 12:44 am
Yes, this is all good. You guys letting us know how good you are and how hard you worked. It is worthless information and not one single tip on how to start a business with no money, except work hard. Well, I think we all knew that one already.
/ J
22. January 2009 at 6:56 pm
Wagenheim’s site is the same old squeeze page come-on you see anywhere. That photo dates back to about 1979 — WHAT Internet? Oh, and he now wants $47 for all the priceless info.
9. February 2009 at 10:24 am
Hi Erica,
Contratulations for your Blog. It’s really nice and easy reading, good web design, usability, functionality and content of course.
Just a quick reply to Andre, who posted above about the $20k start-business money. Andre, from what I understood, your from Brasil, right? So that makes us “Patricios”. I understand your question and I can tell you – as I’m sure you know this – that $20k is far more money in Brasil than it is in the States. Even with all this crisis going on etc. I think I understood your question, as I did Erica’s post on explaining that she started a Web Hosting company with “just” $20k. I can imagine that the investment is considerably bigger starting a hosting company than it is starting a home-based business.
Thanks a lot for this post, @Erica, I’ve already subscribed your newsletter.
Bye, best regards
Antonio – shotopau.com
20. July 2009 at 6:13 am
Great Post and so TRUE.
It is truly about working and working hard and typically every single day for quite a while till you can either get ahead of realize that if you take a day here and there it won’t miss you and it won’t hurt you.
In the beginning especially in any web biz I can guarentee you are going to pour your heart and soul into it and give up a lot. Just to get to the point that your bills are paid not to mention making any serious income from it.
I love the sales letters that all read I made 327,947 in 30 days doing this one thing… It may be true but what they didn’t tell you is that they spent 163,973 dollars at a minimum to do it and it took they poured their heart and soul into it for the last 5 years to get it to that point.
Or that it only worked with this one product and they couldn’t repeat it the following month hence they have to teach you how they did it so they can continue to make that kind of money.
My personal favorite this is the exact system I used to make 5 million in 24 hours. What they don’t tell you is they used nothing but joint venture traffic. That’s all well and good when you are buddies with 30 “A” list marketers, but what in the heck do you do if you are Joe Peon and don’t know anybody?
It’s not as easy to get JV traffic as they make it sound I’ve tried and been told heck yeah we’ll mail for you. Come launch day they are know where to be found and don’t ever remember talking to you if they do answer you.
Don’t get discouraged and never quit and you to will eventually see your ship come in, it might only be the size of a canoe at first, but if you can get a canoe to come in you will eventually get to see that canoe get a motor and grow over time.
Stay focused and don’t chase the next greatest product that promises crazy stuff.
Dave
3. August 2010 at 4:37 pm
Yeah,Know anyone who will show us how to make money online…for FREE? $0.00
and who will explain it simple enough, so even I can follow their directions.
24. August 2009 at 11:10 am
Hello amy name is Marvin Tobias Woodard from Oakland, CA. I’m contacting you regarding a company that I am trying to start called Bay Dynasty Customized Jeans. My company is designed to steer minorities,the less fortunate, and underprivileged people toward the right path by discovering their talent and helping them use their talent to become successful instead of resorting to violence when times get hard. I’m having financial troubles getting started, I got fired from my Wal- Mart job due to the financial problems the economy is having. I was wondering if you would support me by pointing me to some contacts or at least checking out my work to give me some advise or feedback on what you think of my work.
Thank you,
Marvin Woodard
Check out my work on myspace:
http://www.myspace.com/baydynasty
Send email to:
Baydynastyorg@yahoo.com
19. September 2009 at 11:55 am
i like number 4 up there
14. October 2009 at 2:17 pm
Erica,I’m a Windsor,Ont.,Can.Country,heavy metal and garage-rock drummer/lyricist/singer who,at 56,is attempting to launch both music and acting careers(a Dramatic Arts School professor at my University Of Wind-
sor(Ont.,Can.,across the Detroit River from Detroit,Mich.)told me last year that were he still a casting director,he’d steer me towards cowboy and cop/
PI roles)and because there are few roles for classically handsome,non-ur-
ban-speaking or-living black men,I’ve decided to start a combination record label/movie production company.Because I’m financially strapped,perhaps you
can advise me on how I get reach angel investors who back entertainment
entrepreneurs.
14. October 2009 at 2:23 pm
Erica,to conclude,perhaps you can advise me about angel investors who
financially back entertainment entrepreneurs as well as sources of spon-
sorship for my proposed start-up company,of which I will be Founder,Pres-
ident and CEO.(Addendum to first E-mail.)
11. November 2009 at 5:07 am
U made it u are like to have parent am happy for u i realy need help
18. November 2009 at 10:03 am
I have a candle business and would like to have a web site designed but I am scared that it will not bring any business in after I spend the money. What is your thought on that?
17. January 2010 at 7:33 am
Hi Erica,
You are an inspiration to basically kids like me who want to strike it big as internet entrepreneurs. I have been reading your blog for a few weeks now and you have undoubtedly boosted my confidence to follow this path four-fold. I have always known deep inside of me that writing blogs, selling products and essentially everything that had to do with making money online was what I was destined to do. But I never had it in me to actually put my passion into action because I thought that I was the smallest fish you could find in the ocean as big as the galaxy. But you completely changed all that. By sharing your experiences and the obstacles that you encountered made me realize that although it’s going to be a hard and rocky path it’s a risk worth taking. I would like to believe that being in this business isn’t just solely about the money but it’s about the fulfillment, the opportunity to self-actualize and the realization that I can be someone.
Thank you!
11. March 2010 at 4:04 am
Gotta say this post really bugged me. How can you write a post titled “how to start a business with no money” and then just a few lines into your post, you’re saying you started with $20k?
I don’t know what world you come from, maybe success has clouded your reality filter, but most folks don’t have even a tenth of that kicking around as spare change.
In this economy, with a lot of people doing what they can just to scrape by, describing $20K as “no money” as this post seems to imply is more than a little crass.
The content of your post is really relevant, and people would do well to follow your advice. It’s just a shame you undermined it all with your opening paragraphs.
27. June 2010 at 6:54 pm
Erica,
I came across your site today and really enjoyed your realistic advice. I applaud you for success at a young age and for your willingness to help.
I know you are probably very busy, but I would like to ask you a question that I feel you specifically might be able to help with. Although I would like to take advice from some of my investor/business friends, most of them have kept their job while pursuing their business start-up. I currently have investments that throw-off passive income and I do not work as an employee. I’m hesitant to listen to their advice if they haven’t been in my situation.
My situation: I’m a full time real estate investor (30 years old) who manages my own property on a full-time basis. I’ve been out of work for three years now, and I’m convinced that going back to work would be a step in the wrong direction. I want to build a business on top of my real estate investments in order to continue building my empire.
I do read quite a bit of Robert Kiyosaki and I’m trying to follow a path similar to his when he started out: invest in income-producing assets that generate income and practice building businesses. That is currently my goal.
After three years of leaving work and refining my real estate investments, I’m finally getting to the point where I’m ready to pursue only one or two ideas to become my business. However, I’m limited on funds and I feel stagnant – like it will take money to build my ideas further.
My question to you: How can I continue pursuing building on my business ideas when I’ve come to the point of needing to spend more money to get them off the ground? What questions should I be asking myself in order to move forward? In other words, instead of being negative and quitting, how can I move forward considering my limited resources?
25. July 2010 at 8:35 pm
Found this article through Brazen Careerist – it’s very inspirational. I just wanted to say thank you for giving me the idea to identify what will make me feel successful the next day. I will start doing that from now on, rather than stumbling around throughout the day with no idea what to do. It tends to cause some ADD!
3. August 2010 at 4:22 pm
You started with $20,000. I have about $200 to my name right now and it would take me about 2 years to earn $20,000 from my day-job.
And I’m still trying to figure out what you mean by your “product”. Is your product a physical thing that someone can hold in their hand? Or is your product just your knowledge & everything on your website?
I’ve been online reading e-books, and posting on a few sites like this one for most of today and I am still no closer to figuring it all out.
6. August 2010 at 3:57 am
hi eric biz i need to start a business but scared of the lost of the business i bought some of the equipment for the business but still scared of it because am about to get admission into higher institution which i may not be able to monitor well Eric pls tell me how and what to do i need this business to be able to finance my education am waiting thanks Lizzy