Do You Really Need Money to Start a Business?

Brad Matthews entrepreneurship category

Well, it depends entirely on what you want and what you mean by ‘business’.

  • Do you want a side project that you work on to learn marketable skills and also sell a few products? You can do that very cheaply.
  • Do you want to put a few hours in each day and make enough to get by? Mostly depends what you want to do, that can be cheap or it may need a little money.
  • Do you want to try and build something bigger? You can start small but will likely want funding eventually.

Before spending any money you should email or speak with a handful of people who would be ideal fits for your product/service to find out:

  1. Whether it’s valuable to them (whether they would use it), and
  2. What it’s worth to them (how much they’d be willing to pay for it), ballpark is fine.

That informs your next move. If no one wants it, you need to make changes or abandon the idea. If people are only willing to pay a nominal fee for it, you need to ask yourself whether it’s worth your time to make it a business (that depends on your opportunity cost—is there something else you’d rather do?).

At the same time, you can’t take enthusiasm as a commitment to buy, you have to use your judgement as to whether they’re truly interested or casually interested.

But ‘business’ at its loosest definition includes anything from baby sitting, running local business’ social media accounts, creating logos and graphics, or writing/editing blog posts. Starting out with most of those is not easy—you have to be proactive and find work yourself—it won’t come to you. But it doesn’t require much money.

Even a business creating websites for local/industry specific businesses, or setting up a droppshipping store (which I am currently experimenting with), can be set up for a small up-front cost.

However, if you’re trying to build a game changing app or revolutionise an industry though, chances are you’ll need a lot of money early on for an accountant/advisor, legal advisor, CRM, marketing team, sales team, operations/product development team, kickass website etc. Investors or crowdfunding can help minimise the burden on you personally—but to get those you have to work and convince people not only that your idea is good but you are the right person.

But starting a business does not mean ipso facto require a lot of money.

 

Post 4/30 (30 day blogging challenge #2—writing quickly) [19m 19s]

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