Start a small business
The school is a great place to identify your passions; you’re young, you’re energetic and your goals no matter how ambitious seem well within your grasp. Some students feel passionate about achieving their goals while others have their heart set on changing the world for the better but to me, there was never anything nobler than pursuing my dreams and generating employment for others in the process.
This very notion was what drove me to start my business during the final year of grad school when I had virtually no money, however, what started off as a one-man company now employs over 30 technology enthusiasts.
Arguably the most rewarding experience of my life was setting up a small business with nothing, but sweat taught me resilience, resourcefulness and the life-long lesson that you don’t need money to make money.
The reason for this is that you can easily compensate for the lack of startup capital via a meticulous blend of brains, endless perseverance and the courage to take risks. So, for all those students who want to start their businesses but are short on cash, here are tried and tested ways that you can materialize your dreams and start a small business:
Begin with the end in mind
First things first, before you take the plunge into the realm of entrepreneurship it is crucial that you know exactly what you’re aiming for. To do so, you will need to convert your general business idea into a specific one by identifying the exact need your product/service will fulfill, who your target customers are and what the mode of payment will be.
This specific business idea can then act as the basis of your business model and will help you steer your efforts in the right direction. One advice I give to all aspiring entrepreneurs is to opt for a business idea that you already possess knowledge and skill in. This will save you from spending money in acquiring the expertise you need to run your enterprise.
Additionally, if you still have time to graduate, you should capitalize on your student status to expand your knowledge base. You can do this by taking up courses that are specific to your field of interest or generalized courses on entrepreneurship, marketing, etc. and gain feedback from your professors regarding your business plan.
Explore funding options
If you’re aiming for a service-based business, you can start by simply offering your service on a smaller scale and then expand your operations as profits generate. However, starting a product-based business can be slightly trickier as it usually requires a substantial amount of initial investment. The good news is that there are some funding options that you can utilize:
a. Pivot: Capitalize on your current skillset to build startup capital:
An excellent way for you to generate startup capital for your product-based business is to start a service-based business where you sell services related to your business and collect the incoming funds for your startup capital.
This way, you’ll be acquiring money for your product-based business with minimal or zero financial investment and will expand your knowledge of the industry along the way.
There are many companies who’ve followed this strategy including Microsoft which started off by undertaking sporadic software development projects, 3M which was initially a mining company and 37signals which offered web design services. This mode of funding is ideal for students who don’t want to a acquire a hefty business loan.
b. Use crowdfunding for startup capital and market validation:
An increasingly popular channel of gaining startup capital is crowdfunding which allows the public to invest in your business in return for a buy-in in the future. Crowdfunding is easier to obtain as opposed to getting financial support from venture capitalists or angel investors and is recommended because it simultaneously enables you to test the market viability of your product.
In addition to this, your crowdfunding campaign will also help you build a loyal following even before the launch of your enterprise thus escalating your initial sales and even allowing you to re-sell your idea to an interested buyer.
c. Apply for government programs:
Students with little or no startup capital should apply to government programs such as Start Up Loans that is specifically designed to support entrepreneurs.
d. Use your credit line:
Many students use a line of credit to finance their startups, however, while using this mode of funding be sure to keep purchases to a minimum so that you don’t get bogged down in debt.
e. Use an incubator or an accelerator:
If you believe that you have a workable business plan you can reach out to government sponsored incubators who offer funding as well as administrative support to selected startups.
Another option is to go for accelerators which are quite similar to incubators except that they expect a quick response to their investment. So if you feel that you are prepared to hit the market I recommend you go for a government approved accelerator.
Test prior to investing
Even a seemingly winning idea can fail to catch customer interest and therefore it is imperative that you undertake rigorous product testing and modification before your launch to assess your product’s market viability.
This is recommended for two reasons: Firstly, it will allow you to use customer feedback to make crucial tweaks to your offering thus increasing its acceptability by the market. Secondly, receiving an encouraging response from your target audience will make you more attractive to investors allowing you to score funding easily.
In addition to crowdfunding which I’ve already discussed at length above, here are some additional inexpensive yet reliable ways that you can test your product before it hits shelves.
a. Minimum viable product:
One of the best ways to test your product is to develop your Minimum Viable Product. Through this, you can float among your target audience to identify their response.
b. Customer discovery interviews:
Customer discovery interviews will help you identify the features and functionality that your product should possess and enable you to develop your roadmap.
c. Ad campaigns:
You can run an ad campaign using Facebook or Google to determine the demographics of your target customers as well as to validate your offering.
Spread the word
One thing that can skyrocket your success is efficient marketing using paid as well as unpaid channels. You can begin with grassroot marketing tactics where you announce your new venture within your social circle and request them to spread the word.
Such preliminary efforts may seem beneficial. However, they work wonders in introducing your business to a bigger audience and reliable vendors. Here are some excellent ways you can advertise your offering without spending a dime:
a. Setup a free website using online website builders.
b. Submit guest posts to blogs to acquire free link backs to your website.
c. Have your company listed on Google Local as well as other free directories.
d. Establish a strong social media presence.
e. Host an event funded by sponsors.
Bootstrap your way up
If you’re trying to setup a business using a limited amount of money then you are essentially bootstrapping. While bootstrapping, you only spend your finances on absolute must-haves and use improvisation to handle other requirements. A tried and tested way to bootstrap is to do everything yourself at the beginning which sounds tedious, but it’s a great way to hone your entrepreneurial skills.
The key here is to save every penny. However, it doesn’t mean that you compromise on the quality of your offering or the efficiency of your operations. For instance, if you’re just starting to build your online presence it may be better to get help from an IT service provider or hire the services of an SEO expert to optimize your website instead of going at it yourself.
Great entrepreneurs never depended on mounds of money to establish and run successful businesses and neither should you as you can make up for your lack of financial backing with endless perseverance and good old sweat equity.
About Author: Erica Silva is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. Currently, she is associated with AirG Team. Find her on Twitter:@ericadsilva1