Richard Branson, the founder of the Virgin Group, recently wrote in a blog article that he considers 2014 to be the “Year of the Entrepreneur.”
Branson says, the growing buzz around startups has generated a lot of excitement and has consequently nurtured a lot of big ideas. But, you really do not have to have a big idea to be your own boss. Many of the biggest companies today were built on boring old ideas, the entrepreneurs simply made their product or service better than their competition to succeed.
Having said that, the biggest challenges for budding entrepreneurs are not the ideas, but the capital. Without money, it’s difficult to start most businesses. So how do you launch your own venture if you do not have any money to start with? Here are some ideas that have worked for other businesses and something’s you should consider as an aspiring entrepreneur.
Take Orders Before Building
This is a technique that works for products that have low production lead time. Let’s say, you sell custom made lamps. How can you make them if you don’t have money to start with? The trick is to sell them before even making them. Do you plan on advertising your business online or do you plan on marketing them using fliers? Regardless of what it is, start selling your product. Once you have a few customers (who have paid you the money), use this cash to buy inventory and make the product. Of course, this will imply you may not be able to offer a same-day delivery. But that is fine, this technique not only gives you the essential cash flow to run your business, but also helps you validate your product as something that has an audience.
Target Online Customers
This is a technique used mostly by service businesses. Consider this roofing company from Manchester.. According to founder Ben Smith, his business did not have the same reputation as their competitors that had been around for decades. With little capital to invest in marketing his business, Ben chose to focus on his business’ online visibility. This strategy paid as the company started to receive online inquiries. With time, this helped his company build a reputation that matched that of the experienced competitors.
Set up Pre-orders
Pre-orders are a great way to ensure two things, 1. get sufficient capital money to build your product and 2. to validate interest from the market and estimate demand. You don’t have to be like Apple to set up preordering for your devices. If you feel your product can have any amount of interest, approach websites like Kickstarter and Indiegogo to set up a crowd funding campaign. Promote this campaign among your social networks, like Facebook or Twitter. This gets the ball rolling. If you manage to reach out to your local journalists, this could potentially get you more visibility that could ultimately help you achieve your capital. If you choose to go with preordering, be sure to pick the right crowd funding platform. While Kickstarter is extremely popular, they also have an “All or Nothing” model, which means if your product fails to reach its target audience in a predetermined time; you don’t receive any money. In comparison, Indiegogo does not have such a restriction, although it is not as popular which implies a lower number of backers to your project.
Starting a business is both an exciting and scary prospect. But, by removing the worries about your capital investment, you can be sure to focus on the much larger objectives; like building your product and establishing a business model. These tricks listed above can help steer you successfully in this path.