Business has changed. Even since we started the PopUp Business School in 2011. The conversations we’re having now are completely different to the ones we had in the beginning. In case you need some proof:
The biggest retailer?
Alibaba and they don’t own shops!
One of the biggest media companies?
Facebook and then don’t produce any content!
The biggest accommodation provider?
AirBnb and they don’t own any accommodations!
The world’s largest taxi company?
Uber and they don’t own any taxis!
It’s called start-up funding and that is the lie. It’s not funding – it’s debt. We’ve met people who have had to take jobs to pay off their start-up loans and there are lots of organisations in on the scam; start-up loans companies, banks, governments, colleges and universities.
When is the WORST POSSIBLE time to have debt when you’re running a business? At the beginning! When you have no customers!
And it will take you 9 times longer than you think to get one.
You don’t need a business plan to start a business, you don’t need money and you definitely don’t want to be starting a business in debt.
What you need is hope, confidence and a customer.
So how do you start a business without spending money?
Here’s the traditional approach that we get taught.
1. You make a list of everything you need to start your business,
2. Write your estimated cost next to each item and then add everything up,
3. Then double it,
4. That’s the amount of money you need to borrow,
5. Put this in a business plan,
6. Present to bank,
7. Go into debt,
8. Spend money,
9. Maybe make money in year 2!!!!!!
Can you wait 2 years to make a profit? Do you want to go into debt?
You don’t need to spend that money at all, you can easily start a business with no money. When you’re starting out, good enough is good enough. It doesn’t have to be perfect. Perfection will kill your business before you start. Perfection costs money and you don’t need to spend money to get going. We meet so many people who have wasted thousands on starting their business. Here’s what happens
This is the secret to falling in love with your business and not being seduced by it. Idea generation is just dating your business. The real love comes when you start creating your future together and dealing with some challenges along the way.
Here are five ways we teach people how to start for free: First you make a list of everything you need to get going, e.g. premises, a website, business cards etc and then you bootstrap as much as you can.
5 Critical Ways to Bootstrap your Business
1. Get stuff for free
Google this: How do I get (enter what you’re looking for) for free?
You’ll be amazed at the results that come up. People advertise free stuff on Facebook and Gumtree. You can get business cards for free (usually +shipping), flyers for free plus lots more! Maybe we’ll add some more free resources later, but the real win is when you do this yourself. One of our favourite free resources is Weebly. You can build a website for free and start selling straight away. Alan built a free website at the beginning of the year and took tens of thousands of pounds through it without spending a penny on web development.
Borrow space, borrow equipment, a restaurant, borrow a kitchen, borrow people, borrow whatever you can. We had a songwriter along to a workshop in Nottingham, UK who was about to spend two thousand on recording equipment until we pointed out that her local university had several BRAND NEW recording studios at 40% occupancy that she could borrow – not only that, the university would even throw in a team of sound engineers, producers and a technician! Why? Because the students, god bless them need real-world experience to pass their course!
There are resources lying all around you that are underutilised. Get creative and borrow what you need.
Want to find out how to borrow a restaurant? Come on one of our courses.
It’s how co-founder Alan got some branding and marketing done for free in the early days of his first business. He trained the staff of a marketing agency, they did some stuff for him in exchange. Co-founder Simon secured some accountancy services for free for three years in exchange for building a website.
What skills, time, products or service could you swap so you can get what you need for free? Find someone who has what you need and swap what you have for it. You have incredible skills that other people need. Swap them for what you need to get going.
4. Sell stuff you don’t need
Joanna is a mobile beautician and when we first met her she needed a portable treatment table but couldn’t afford the £120 cost. The money for this had to come out of her bills fund and the risks felt too great for her!
"If I buy this table and don’t get enough customers in the same month, I won’t have enough cash to cover my bills!" With a nudge from us, she sold the running machine that was gathering dust in her spare room (only being used as a clothes horse) and was able to get the treatment table to get going.
This is why this really makes sense. We are psychologically tied to the money we need to survive – and rightly so. Selling some of your unwanted stuff creates a ‘start-up slush fund.’
By the way, this is smarter than blowing your savings AND MUCH SMARTER than starting a business in debt! We all have unused stuff lying around in our house. Sell it and use the cash to get going.
5. Sell your value before you create it
This is the most important of all and a foundational principle of the PopUp Business School. This is about getting paid in advance for your product or service so you can use your customer’s cash to get started. At this point lots of you would be thinking ‘Yes, but that wouldn’t work with my business.’ You can make this work with ANY kind of business, you just have to think differently about how you make it happen and your customers have to TRUST that you’ll deliver on your promises. I remember Fiona who spent nearly 18 months writing a training course only to discover that no one wanted to buy it. Pitch the ideas for the course first then you can shape the course based on the feedback you get from the market. Then ask your customers to pay up front (you might have to incentivise them with a discount). We pitched the first PopUp Business School free start-up event in March, got paid in April, wrote it in September and delivered it in October.
Also you could try Kickstarter or Indiegogo and create a business funding page (your customers pledge money in exchange for your products and you get the cash when you hit your target).
When do Amazon want payment for their products? When do you pay for theatre tickets? After the show? Imagine going to the supermarket, loading your trolley with food and going straight home to eat it all, only returning the following week to pay! Can you imagine Walmart or Tesco standing for that? Of course not!
Small businesses are saddled with debilitating notion that we have to deliver before we get paid. The pop-up restaurant who got their customers to pay for their meals in advance and used their customer’s money to buy the ingredients got this spot-on!
The very first person to make a profit at the PopUp Business School (who was unemployed and recovering from substance addiction) took orders for lunch (at one of our events) and convinced everyone to pay in advance for their lasagne. When he left the room with £88 in his pocket we weren’t sure if we’d see him again but luckily he returned!
Go through your list of what you need to start your business and see what you can get for free, borrow, barter for, sell something to get cash for or sell your value before you create it. You absolutely can start a business with no money by following these principles.