Last week the government launched a new initiative in which they are lending young people £5 to start a business.
The scheme is designed to encourage entrepreneurship, but it also has resonance for people who have already considered starting their own business. All too often, would-be entrepreneurs simply don’t have access to cash when they start their venture. But does this mean it’s impossible? We don’t think so. Read our top tips to help you start a business with no investment.
1. Don’t give up the dayjob
This cannot be repeated enough. You will need to support yourself through the growth of your business, and it is highly unlikely that you will be able to do so from the outset. You need enough money to live on, and in the short-term this will likely mean that you will need to keep up your regular job. Of course, this presents its own challenges, particularly with regard to time. Read our guide to running a business in your spare time.
2. Use your existing skills
Rather than going through the expense of retraining, start a business that makes use of your existing skills. For example, many people in the professions choose to start a consulting business operating in the same field in which they previously worked. By using your existing skillset you can hit the ground running.
3. Plan, plan, plan
A comprehensive business plan is a vital consideration for businesses of every size, but it is particularly important when money is tight. Your business plan should include detailed financial forecasts, setting out your projected income and expenditure. This will help you to identify potential cashflow ‘bottlenecks’, and to take measures to mitigate them.
4. Analyse your competitors
Competitor analysis should form a big part of your business plan. You should take time to identify your competitors’ strengths and weaknesses. What are they doing right, and what is not working out for them? What would you like to see if you were a customer? You might also choose to augment this research with publicly available information from bodies like Companies House.
5. …and beat them for free
Once you have identified your competitors’ weaknesses, think about the ways in which you can beat them with the minimum expense. Often, it is possible to beat your competitors simply by providing better customer service. Great service doesn’t cost anything (until you need to start training staff), and this can give you an invaluable USP for free.
6. Sell your skills
With little or no cash at your disposal, it can seem impossible to get the essentials sorted. However, cash is not the only currency. Why not see if you can barter your skills? It might well be that some of the people from whom you need help also need help from you. This can be a great way not only to fulfil your needs, but also to build lasting business relationships.
7. Access free information
There is a wealth of free business information available, both online and offline. There are hundreds of articles and guides in our Knowledge Centre, but there are also many free support schemes available in the ‘real world’. Read our rundown of five of the best small business support schemes.
8. Identify free marketing opportunities
Marketing your business is one of the most important challenges with which you will be faced. Luckily, though, there is a range of ways in which you can market your business for free. Paramount amongst these is search engine optimisation, or SEO, which helps to position your business well in search engine rankings. Read more about SEO for business and, for more cost effective marketing ideas, read what your business can learn from independent record shops.
9. Use invoice finance
As your business begins to grow, you might begin to look for credit facilities. However, conventional business loans can be difficult to come by for new businesses. Instead, you might wish to consider invoice finance, an arrangement in which you borrow against the value of existing invoices – and which, crucially, doesn’t generally require a credit check. Read more about invoice finance.
10. Remember your work-life balance
Finally, you should remember that starting a business is stressful at the best of times, but starting one with no investment is a major undertaking. You should take steps to ensure that you maintain a sensible work-life balance – and, indeed, that you can continue to earn enough money to support yourself, as we discussed earlier. Get started with our tips for a better work-life balance.