How Do I Start A Business When I Have No Money?

How do you raise capital and begin working for yourself when you have no money. Here is my take on the "I have no money" mindset.

If you have a job a. Capital. Put aside ten percent a month and within a year you will have enough for a seed fund. How do you put aside ten percent a month on a tight budget. Get rid of your discretionary expenses - stop watching movies, eating popcorn, drinking soda, smoking cigarettes, buying gifts for yourself or your loved ones or in desperate situation even food.

I have lived for six weeks on raisin bread and butter so that I could pay off a part of my startup credit card debts. When you put your mind to it, you would be surprised how much you can put aside within the short span of a year. In a given month you do spend fifteen to twenty percent of your paycheck on these items and if you want your venture bad enough you shouldn't have too much of a problem making these sacrifices.

b. Time. For most technology ventures the first and most crucial milestone is the proof of concept. If you are a programmer start sleeping less and working more. If you can put aside an hour every day and a full day on weekends, you get two full days a week, 104 days in a year. That is 4 months of programming time that you don't have to pay or raise capital for.

c. Focus. Make the time count. You must be focused on an approach that will get you to revenues fastest. Don't build anything grand or esoteric, build something that can sell and add to your seed fund or help you meet your cash requirements. You would be surprised at how much money is floating around the business idea you have fallen in love with. Look around hard enough and you will find something that you can sell within a month.

If you are in love with blue tooth technology, sell your blue tooth library of functions for a few dollars. There is your first product. If you don't have a library, write a 30 page ebook on working with blue tooth and sell it on ebay or amazon. If you don't, won't or can't do that, get a blog, post your code and make money through your google adsense account. Teach a class on blue tooth at a local institute or run it online. You need to be a little creative and the money will find you. Rather than focusing on raising money, your focus must be on the path that will start the cash flowing. (We will worry about gushing later)

d. Misc. Only you know the real potential of the market you see. Every body will discourage you and tell you that you are either wasting your time or taking too much of a gamble. Assume that there is no support group and you will have to do it all alone. If you stay with it long enough it will come together as long as you are in a business where you can make money.

If you feel that you can't (make money) then drop it but never ever take any one elses word for it. What is the worst that can happen. You will fail and will have a few thousand dollars in credit card debt. When that happens go full circle to point (a) to the raisin bread and butter diet and you will be fine. It is actually quite filling when you get used to it. If you feel really miserable and depressed throw in a jar of blue berry jam.

If you don't have a job - Just remove the part of point (a) where I talk about putting aside 10% of your paycheck. Every thing else (a, b, c & d) still applies.

Conclusion The 10% is good for anywhere between a month to month and a half of living expenses. The 1 hour a day, 1 day a week is good for 4 months of development expenses. Together the two give you 5 months of venturing space. You may have a grand plan for world domination, but break it down into 3 - 5 month steps. At each step you must generate incremental cash.

The caveat You will not be able to start an airline or any other business with large cash requirements with this approach. The approach is only good for boot strapping a small business to a stage where it begins to generate cash. Where you take it from there is completely upto you.