How to Start a Business When You Are Broke as F*CK

Starting a business is exciting as hell. But it’s also crazy, anxiety inducing, and a massive amount of work. It’s even worse when you literally have no money to get started, but becoming an entrepreneur is something that takes dedication and passion. And there is quite a long journey ahead, with a lot to cover. 

Before we get going, I want to stress one major thing. Action is almost always better than inaction, so learn what you need and get to work on your business. Let’s get started.

How to start a business with no money?

Step 1: Start with Your Vision

Step 2: Research Your Market

Step 3: Figure out Your Finances

Step 4: Determine Your Business Entity

Step 5: Decide on a Business Name 

Step 6: Start the Hiring Process

Step 7: Begin Marketing Your Business

BONUS: Business You Can Start with No Money

Step 1: Start with Your Vision

How to start a business with no money, start with your vision

When it comes to starting a business, you need to establish a vision for the company. 

This is the start of it all. The first chapter. The humble beginning. 

Having a vision of what you want is an amazing feeling. It’s something you have crafted and created yourself. Something that once you have a vision of what you want, it’s hard to let go. 

Side Gig or Jump in with Both Feet?

Is the business you want to create something that can start small and grow on the side as you maintain a full time job? 

For many entrepreneurs this is the case. 

Many businesses start out as hobbies or side businesses, while they are still working for another company. Which allows them to maintain a steady paycheck while their business grows.

Others want to jump in with both feet. Those that have the financial freedom to do so, or are in a position to not need a steady income while they start. Or you can’t stand the idea of this business not being your sole focus.

Whatever you want, start with the end goal in mind. 

Do you want to make a full time career out of it, or make some extra money on the side?

Where do you see this business in 1 year? 5 years? 20 years?

Set a plan and milestones for how you want to see this business grow.

How big do you want it get? Local? All across the U.S.? Global?

Deciding the scale you want your business to achieve is very important. It might not be something that you have to decide on today, but keep it in mind. 

Do you want to contribute to your community by providing a useful product or service? 

Maybe you want to provide and ship products to cities across the U.S. and gain popularity internationally. 

Or maybe you would want your business to be in almost every country around the world as a global powerhouse.

How much time do you have to dedicate to your business?

Do you have school, work or other priorities? Make a list of everything that fights for your attention and keep track of how much extra time you have each week. 

Whether working, going to school, or both. You may already have a demanding schedule. So don’t over exert yourself by trying to start your business as well. 

Instead, on a day off, set aside an hour or so of research dedicated to your business, and if you have more time keep going. But this method will help you have a balanced lifestyle and avoid burnout.

But if you do have time to hit the ground running, go on, get started and never stop! Beware of your limits and the potential for getting burnt out.

What skills can you offer to help it grow?

Knowing your strengths and weaknesses can help your business succeed. Your business is your baby. It’s very important to you, and it’s understandable to want to be a part of every aspect of your business. But, overlooking your weaknesses and keeping control of everything may not be the best idea. 

For example, are you good at tracking expenses and doing accounting? If not, you might want to hire that out or find a partner that is. 

So being honest with yourself about the contribution you can make to your company can help you in the long run.

How much control do you want? Or are you contempt with partnership?

I know, as we talked about, it can be difficult to share your company. But if you are going to do so, it’s important to find a partner that complements your weaknesses. 

Going into business with a partner can bring a fresh perspective to things and help your business succeed. Be sure that you and your partner(s) are all on the same page when it comes to the ultimate goal and vision for the company.

Ask yourself these questions to start creating your vision for the business. Remember, this doesn’t have to be a big lengthy process. I am advocating for quick action and getting started while keeping these things in mind.

Step 2: Research Your Market

How to start a business with no money, research your market

After you have established your vision and have a good idea of what you would want your company to be. The next step to take is to research your market. 

Knowing your market is vital. Here are the things you should research.

Demand, Popularity, and Seasonality

Is there a demand for your product or service? If there are other companies out there doing the same product or service then the answer is likely, yes!

If your business is a brand new idea, then it might take some work to find out if there is a demand for it. 

The quickest way to find out, is if people are willing to buy it right away. Can you approach someone on the street or online and get them to buy it? That will help tell you if there is a demand.

Whether it will be popular or not is another story and all depends on your branding and marketing. But if you can sell it, you can also make it popular.

One of my favorite tools for determining if people have an interest in something is Google Trends. 

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We can look in Google Trends, go back five years and see if it’s gaining or maintaining popularity. Then we can also determine if there is a seasonality to it that might make me hesitate or start at a different time of year.

Expenses

Knowing the expenses of your company before hand is a must. It’s also an opportunity to find less expensive ways of doing things.

Start by writing down all the costs you can think of and totaling those up. Then add a buffer for unplanned expenses and emergencies.

If you are not sure of the cost of some things, do some Google searches first. Then try calling around to other businesses with similar products or services.

Your Audience

Your target audience and base is key to your company. Figuring out who they are requires forethought and research.

What type of person would buy your product or service? How old are they? Do they have a specific job or live in a specific area?

Asking yourself these questions can help give you a head start whenever you market your business.

Competition

Researching your competition can give you a major advantage. 

Analyze what makes their company successful. The advantages and disadvantages of their business. And how you can make your business better.

Find their reviews and look at their customer’s pain points. Then build your business with these pain points in mind.

There are lots of businesses within the same industry. This can be major validation towards your business idea, but you need to focus on making your business stand out from the crowd.

Step 3: Figure out Your Finances

How to start a business with no money, figure out your finances

Starting a business takes some serious investments. Whether it’s for the product, services from others, or shipping. Making sure that you have enough money to keep your business running is very important. That will take some of the worry out of starting your business, some. These tips can help you have a good start establishing your finances.

How to start a business with no money

Friends and Family

Pitching to friends and family to make an investment in your business could be an option. Make sure to keep the business aspect and the personal aspect separate. And always be aware that these things can put a strain on your relationship. 

Bank Loans

Banks can be sticklers with their money, but some do offer loans to small businesses. Most small business loans do require you to have been in business for at least a year and operating at a specific revenue level. So that might not be an option for most, but you can look around and find some banks willing to lend you money.

Crowdfunding

Certain websites such as Patreon, and GoFundMe can be great ways to pitch your idea to millions. It can also be a way to help you establish a customer base and get pre-orders. Check out a list of the best crowdfunding platforms to consider.

Bootstrap from Another Business

Is there a quicker and cheaper business you can start, do the work yourself and make enough money to funnel into the business you want?

Put in some hard work and effort, clean houses or mow lawns, or wash cars. The /r/sweatystartup subreddit is full of entrepreneurs putting in the hard work to build businesses from nothing.

Put it on a Credit Card (Not recommended)

It’s less than ideal, but sometimes you know you have to get something started. So bite the bullet and buy what you need to get going on a credit card. Just make sure you know what you are doing before maxing out that horribly beautiful piece of plastic.

Step 4: Determine Your Business Entity

What is a Business Entity?

Before listing the different types of business entities, first you need to know what it is. A business entity categorizes your organization (or business) into a legally recognized structure.

You can choose which ownership model best suits your company and your vision for it, but it’s hard to change so choose carefully.

What are the Types of Business Ownership?

Sole Proprietor

A sole proprietor is the owner of the company giving you complete, sole, ownership of your business. Once you have chosen your business entity of sole proprietorship you can not register as any other kind of business or company. As a sole proprietor your business assets are not separate from your personal ones. Which means as sole owner of the company you are responsible for any debts, lawsuits, or other obligations that your company suffers. Some company owners choose this business entity because their business is small. Others just started working and never stopped to consider other options.

Partnership

When having a partnership as a business entity it can tend to be one of the easier options, to get started. It requires two or more owners of one company. There are two types of partnerships.

Limited Partnerships (LP)

Within a limited partnership there is only one partner with unlimited liability, and the liability of the other partner(s) is limited. While having limited liability the other partner(s) also have limited control over the company. That control should outlined within the partnership agreement to avoid misunderstandings. The earnings are processed through personal tax returns with the limited liability partner, and the general partner. The general partner will have to pay self-employment taxes.

Limited Liability Company (LLC)

Having a Limited Liability Company shares the benefits of both corporations and partnerships. It helps assist you in preserving your personal assets. Such as your house, car or other possessions from being taken through lawsuits or bankruptcy. 

You can still receive the losses and earnings of your company without having to pay corporate taxes. 

If your company is an LLC, you are still considered self-employed and must pay taxes. As a business owner an LLC can be a good start due to the fact that it is of great low-risk when it comes to your personal assets as well as the protection of them.

C Corp

C Corps, or corporations, are legally separate from it’s owners. This provides full coverage of the personal assets of the owners. They can produce profits, and can be taxed, sometimes even twice, along with being held responsible for any legal action. 

S Corp

S Corp is another type of corporation that can help corporations avoid being taxed twice, unlike C Corps. It allows profits and losses to be processed to the owner without it being taxed. With such benefits to the S Corps there are limits, rules, and strict regulations that must be followed to not only have S Corps as a business entity but to obtain it as well.

Such as, having to file with the IRS in order to obtain it, or the amount of money an owner can receive before the profits and earnings are allowed to be taxed, the rules and processes are different in different states. The amount of shareholders an S Corps business entity is allowed to have are 100 whom to all must be U.S Citizens.

B Corp

B Corps are benefit corporations that are for profit organizations and corporations. They are similar to C Corps when compared to taxation but different in other elements and aspects. As a B Corp, shareholders hold the company responsible for producing profit. Provoking some states to make laws stating that they would go through financial records to ensure that the money profit corporations receive are going to those in their stated purpose.

Non Profit Corporations

Non profit organizations are designed to give charity whether financially, religiously, or educationally to those in need. 

Due to their contributions to their communities, they are able to have a tax exemption, meaning they don’t have to pay any kind of state of federal taxes. Similar to B and S Corps they have to file with the IRS and have an annual benefit report to ensure that all profits and earnings are rightfully being contributed to those in need.

Step 5: Decide on a Business Name 

Now the next step for your business is to name it, this process can be fun and exciting. Here are some tips to help assist you in the legalization of your business name.

How to Decide on a Business Name 

There are a lot of things that can help you figure out your business name. You can create a list of things that inspired you to create this company. Or even certain elements within your company that might describe it.

You could name the business after yourself or dedicate it someone that influenced it. You can even choose two names for your business. Having one name be the legally registered name for the company. And the other name in which is used to conduct business.

Availability

Make sure that your business name is available. Start by searching your state’s government website for a registry. 

Then you can also check out the U.S. Trademark Database to make sure your name isn’t trademarked. 

Also a quick Google search can tell you whether or not your name is taken. If not, head on over to Namecheap to secure your website domain.

Bonus

If you are in one of these businesses, we have awesome lists and generators to help name your business.

Step 6: Start the Hiring Process

If you aren’t doing the work yourself, hiring the right people is another step to ensure your company will stay afloat. And the inverse is also true, hiring the wrong people can sink your business. 

Which is why this is one of the most delicate processes for your business. 

Here are some tips to help you give a great interview and to help you find the right people for the job..

How to Find Job Candidates

There are tons of different ways to find potential candidates. Networking events, job fairs, social media, job posting websites, and more.

How to Find Employees for Free

Start by asking friends or family, either they have interest or know someone who is. Then I would ask yourself where your perfect candidate works right now. 

Search for them on Linkedin and send them a message with the details. Check forums, or reddit for people looking for jobs, there is a big talent pool of people waiting to find the right company.

Outside of the free options, there are also plenty of paid options. Linkedin is another perfect example, along with Indeed, Zip Recruiter, Monster, and Craigslist. 

Which needs a rock star job posting to get people interested, which needs honesty about the job and what it entails.

To create a great job posting, you need to put yourself in the job, but not as you would do it, how others would. Come up with smart processes and efficient tasks. Write everything down that the job entails. Then make a bulleted list of the requirements to do those tasks.

Summarize the work, and the company in two paragraphs, followed by the job requirements and the benefits to get a great job posting.

Once you get some candidates rolling in, it’s time to start the interviewing process.

Transparency

When interviewing someone as a potential employee, something to keep in mind is that this person will be representing your brand.

So you need to make sure they are a right fit. And that start with outlining your vision for your company. Letting them know the end goal can help make sure that you are both on the same page. 

They even might bring some ideas to the table that you didn’t consider.

What do I do once I’ve found the right candidate?

The first thing you NEED to do is a background check. You need to make sure that this person is a right fit for your company in every way. 

This isn’t to say that people with a sketchy background can’t be amazing workers, because they can. But that’s a determination that you need to make and know before hiring them.

If you want to ensure that your applicant is able to complete their job, hire them for a probationary period. Outline their responsibilities and job function and let them have at it. If their performance is great, promote them, if not pay them and thank them for their time. 

On boarding your first employee

Once you have picked the right candidate, offered them the job, and done a background check, it’s time to bring them aboard.

Onboarding is the MOST important part to hiring. It will set your new employee up for success or failure.

What does a good on boarding process look like?

Familiarizing them with the business.

Training them on their job functions.

Listening to their questions and concerns.

And… Training them on their job functions.

You need to show them the ins and outs of how your business operates. Train them on their job functions so that they know if as well as you do. And listen to them! Take their feedback as they will take yours and you can have a rock star employee.

Step 7: Begin Marketing Your Business

Hit the pavement so to speak. Get out there and start selling. Get your customers to come to your door. Put the word out.

Getting the first customer is the hardest part. But once that happens, it makes it easier to get the second, and the third.

How do I get my first customer?

Blood, sweat, and tears. Ask your friends and family to buy your product service, cold call to local businesses, put out flyers, or just start knocking on doors. But HOW you market your business is going to entirely depend on the type of business you are in.

If you are a local retail business you will want to make sure to have good signage at the road. Put your listing on GMB (Google My Business), and get or build your own website.

More ways you can market your business:

  • Social Media
  • Networking
  • Referrals
  • Advertising

Bonus: Businesses You Can Start with No Money

  • Lawn Mowing
  • House Cleaning
  • Power Washing
  • Pool Cleaning
  • Pet Waste Removal (Poo Pickup…)
  • Dog Walking / Pet Sitting
  • Dropshipping
  • Web Design
  • Leaf Cleanup
  • And many more..

Conclusion

As you can see, starting your own business is crazy hard, but it’s even harder when you don’t have any capital to get going. Doing the work yourself is just one way to mitigate some of those costs, but it still takes money to make money so get out there and find or make the money you need to get going and get started today!

Was this post helpful? Did it answer your questions and help you on how to start a business with no money? Let me know in the comments below! If you are looking to start any the of the below business, check out our one dollar business plans!

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