You want to start your own business but you have no money. You have a great idea but you don’t have the money to launch it. How do you do it? Years ago I started a business. Here is what I found out.
My idea was to have a taxi business that was a credit to the city and I had an idea for selling advertising on “running electric signs” in the back window.
The first way to raise money is to borrow it from a bank. If your credit is good enough and the business has collateral then you may be able to do this. In the case of the taxi idea I had five cars that were worth some money however I was unable to get the loan on my own.
Another way is to take on a partner. In my case that is what I did. I found someone who had a house that was usable for collateral to give us the start-up money we needed however it was a very small amount of start up money.
One thing you must know as a business owner is there is term “cash flow” that is very important. Your business will run in a cycle. You will have bills and payments due and the receipts from your business must keep pace and remember you have to have money to live on. You have to eat and have a roof.
I wanted to be in business so bad I overlooked the fact that the money the bank gave us to start wasn’t enough.
I consulted an attorney and found out I could raise money on any legal basis on my own. I offered a 10 percent return over 60 days for any amount to our riders. Every taxi client was given a chance to participate in the business. I developed a simple form that said I would pay them their money plus 10 percent after 60 days. If a person put up 10 dollars then I paid them 11 dollars after two months. Obviously I had to measure what we allowed people to invest but it was a very profitable project. We raised a lot of money and riders got other people to ride. It created a real interest in the business.
I found that in most cities there is a small business company promoted by the city or government. What they often do is lend money and also provide “office space” for a period of time.
Another opportunity is the Small Business Administration (SBA), which will loan money to a solidly planned business.
What about the risk? I’m linking to a reference that says the risk is between 30-50 percent when what you will likely hear is 90 percent. Mark Hendricks has posted an article titled “Why the Small Business Failure Rate Is 90 Percent Smoke and Mirrors.”
I link here because I respect Mr. Hendricks and I believe he is correct, to a point.
Money is the blood that runs a business. However if you know nothing about marketing then you won’t be able to get clients. If you don’t understand networking you won’t be able to stay in business very long.
However while going into business for yourself is exciting it is hard, very hard. Owning a business is a 24/7 commitment. My business was a 24-hour business and that meant crashes, drivers not showing up and cars breaking down, not to mention some issues with theft.
An owner must be driven by money or the desire to see the impact his business will have on society.
If you really want to be in business where there is a will there a way. One way I left out was borrowing from friends. Measure that in your heart. Even if you don’t have to do it how would you feel if you had to borrow from friends and family to stay in business? If you wouldn’t do it don’t go into business for yourself because you have to lay down your pride.
As a dear mentor once said to me “Successes are simply willing to do things failures will not.”
bnet, Mark Hendricks, “Why the Small Business Failure Rate is 90 Percent Smoke and Mirrors”