CONVENTIONAL METHODS: There's nothing wrong
with following the advice of many experts and starting your new business the conventional way.
But many people with a will to own a successful business just don't have the resources to be
conventional. Yet somehow they get started and grow their business to success just as those do
who have plenty of start-up capital. How do they accomplish this miracle achievement?
COMMON SENSE: Anything can be achieved through applying common sense to your thinking.
It's an old adage, but it's so true: where there's a will, there's a way! The first step to successful
business start-up is to evaluate what you have to work with and then give plenty of thought to
a business plan that is compatible with those available resources. Sounds simple, doesn't it?
It is simple! Now let's discover how to eliminate the need for start-up capital.
GETTING REAL: Let's use a simple analogy here. It's lunchtime and you are very hungry.
You want a steak and all the trimmings but you only have $4.00 in your pocket. Can you find a
restaurant that will serve you a steak dinner for under four bucks? Not likely! So reality sets in
and you settle for fast food. It's not steak, but after you eat, you're just as full and satisfied
until it's time for your next meal. Will you have a steak dinner sometime in the near future?
Probably! The fast food got the job done.. the steak will come in time, and when it does, it will
be all the more delicious! Your new business may not be the steak of the industry, but you'll get
the job done and the steak will come in due time with due diligence.
WANT VERSUS NEED: Most of the time we mistake what we need for what we want. Need is an absolute -
want is a variable. There are needs in starting any business, but most business plans include about
60 - 70 percent want. Oh yes, we think we need certain things, but when there is lttle money to get things
going, it's amazing how many of those needs can be set aside until the business is off the ground and
turning profit.
NEGATIVE STATISTICS: Yes, the charts show that under capitalization is a prime factor in many
business failures. Why is this not a concern? Most businesses that fail because of insufficient start-up and
operating capital were budgeted to operate in such a way as to need more money than they could take in.
The key is to bring in more money than is needed to cover expenses from day one! That means you have to
turn a profit from day one. Once again the stats show that most new businesses can't count on turning
profits for at least a year. So how can your new business turn a profit immediately? By having virtually
no overhead!
ELIMINATING OVERHEAD: Let's say you start a catering business. The equipment alone will cost you over
$5000. Once you have the equipment, the main cost of doing business is marketing and promotion. If $200 will
market your new business enough to get your first two catering jobs and you need $300 to purchase the raw food
items to cater the first job, your real capital need is $500. So you have a thousand dollars in start-up capital.
Rent the equipment for the first few catering jobs instead of buying it. You can start your business for less
than the capital you have on hand and your first job will turn a profit. Will the profit be as high as if you
owned the equipment. YES! Because the overhead cost of the equipment must be factored in to each job. Once again,
this sounds simplistic, but what's the catch?
SIMPLE AS IT SOUNDS: Let's take an inventory. You probably own a computer since you're reading this. You have
a phone and some form of transportation. Free software programs abound on the internet. So you can set up simple
accounting, desktop publishing and word processing to meet your office needs. Including paper and postage, initial
cost is under $10. You pay your phone bill anyway and your catering business will require no long distance calls so
you initial cost is $0. Your car, van or truck will require a litte extra gasoline so your initial cost is $20. Most
new caterers would plan for a new computer, business phone lines, office rent and furnishings, and a well equipped
Van to haul their wares. Their plan would include an additonal $25,000+ for these items. Your cost for these items is
around 30 bucks. Are these things needs or wants? Yes, they will be needs for the future, but they are only wants in
turning your first profits. Eliminate unecessary overhead.
CAN'T ELIMINATE ALL COSTS: True, but there are so many ways to cut your initial start-up needs. Utilize what you have
on hand. Take full advantage of free resources. Rent, instead of buy. Buy smaller quantities of supplies. Barter services
or finished product for things you need. Take some risks. Step out and try it the low/no cost way.
Make some sales and turn some immediate profits. Then invest part of your profits in your new
business to buy the things that will make your job easier and turn more profit.
In a few months, you'll be conventional and no one will know that you started on a shoestring.
APPLYING THESE STEPS TO YOUR BUSINESS: Maybe you're still at a loss as to how this
can work for you. Start by thinking. Follow that with more thinking. If you can't begin to
create ways to start your new business with little or no money, maybe we can help further.
Simply e-mail us a little information about the new business you wish to start. We'll send you
a customized how-to sheet with all the tips you need to start on a shoestring. This is another
free service of MM$tw!
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