You don't need funding to start your own business
How much funding do you need to start your business? I am not asking in the era when Ambani or Birla started their business. We live in the time of online businesses which are more valuable than traditional industries.
Do you know Flipkart started with just Rs 5 lakhs of personal funds?
Lifestyle businesses still need big money to start with because they need to pay rent, stock inventory, hire employees from day one and pay vendors in advance. But internet businesses don't have these expenses from day one. You just need a laptop with internet connection and your business is up and running.
Image Credit "ShutterStock"
I agree you will have to spend money on hosting, business tools, travel and some other routine stuff. But these expenses are not a show stopper. If you can manage your daily personal expenses then the rest can be taken care of.
Let me tell you a story -
There was a 16-year-old kid who was not good at his studies. He had symptoms of dyslexia, a learning disability that affects reading comprehension. He wanted to do something that he loves to do. He started working on the school magazine. He called up tens of media publishing companies as if he was a seasoned businessman. He convinced his friend to help him. This is how he started his first business. This kid was no other than legendary Sir Richard Branson of Virgin Group who created an empire out of nothing. He listened to his heart and just started out without any external support and against all odds.
Still sitting in a cozy job and waiting for God to come down to help you with funding? Here are some easy steps to startup without venture funding.
# Get initial funds from personal savings, parents, uncles and friends.
Break your piggy banks, sell your toys, auction your unused stuff and calculate how much money you have for your business. Borrow money from your parents, uncles and friends.
You must be responsible while spending borrowed money because you have to return that money with interest. You should offer convertible debt in exchange of money, be professional in the business even with your parents or friends.
# Do what you know well
Don't try weird things with borrowed money. Do something you are passionate about, something which people come to you for help.
It could be hacking, finding & killing bugs (software only) which others overlook, make stunning designs, write interesting stories, raise social issues, fight for local issues in your vicinity, spread education or sell ice-cream on mountains.
# Work from home or rent out single room
Don't spend a single rupee on rent till you have a team sitting all over the room and even on stairs. If working from home is not a viable option for you then rent out a single room from a friend's apartment or do some jugaad (Indians are famous for it).
The co-working space is one more option but not from day-one when you have cash scarcity.
# Biggest expense should be Internet bill
If you are spending money on some single item which is more than your Internet bill then pause and think!
Why do you need it? Will your work stop if you don't have that thing today? If the answer is no, then postpone that expense till tomorrow. Go through the same exercise till your work stops without that item.
For example - Printer, Fax, new laptop, or extra LCD monitor!
# Don't incorporate company till you see your first revenue cheque
This is a mistake most first-time entrepreneurs do (including me). Can we do a business without having private limited company? Yes, absolutely.
You must do business without incorporating company till you start earning money. In some exceptions your clients want to see you as a company for doing business, let them know that company incorporation is in the final stages. First get a cheque from them on the company name you have in mind (check it's available on MCA website).
If the customer gave you a cheque then you have a real customer. In my experience, I have seen customers who promise to give business but at the last moment something happens and they stop responding (especially when you are a small startup).
Company incorporation is costly. You have to pay the CA every year for a lot of compliances.
# Hire on equity (founding team)
Bring only like-minded people in the founding team. Don't hire from job portals, it just won't work with startups. Your early employees (two-three) should either be co-founders or employees with equity only.
If you can't do that, then learn. You can't just hire people like big companies; you have to be contagious, attract the talent like a magnet, share your vision, and they will join you & your vision.
Be brutally honest and transparent. If you don't have money, say it. If you don't have a space, say it. You better spend more time on developing your product yourself than hiring the wrong guys.
# Hack growth without spending money on marketing
You don't have to pay anything on facebook advertisement or Google ad-word. Spending on advertisement is a game of scaling up when you have VC money in your pocket.
Make brilliant product and hack the growth. You have not understood startup marketing if you are not a regular reader of Growth Hackers and Hacker News.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)