Starting a Small Business with Little or No Investment

Nearly 28 million businesses in the United States have fewer than 500 employees, qualifying them as small businesses. Approximately 120 million people in this country, more than half of the working population, work in small businesses. These businesses are the lifeblood of the United States, generating more than 65 percent of net new jobs within the past 30 years. Each month more than 540,000 new businesses get off the ground.

Starting a business is exciting but it is also challenging. Only about seven of every ten new businesses last for at least two years and approximately half close their doors within five years. A mere quarter manage to stay in business for at least 15 years. Lack of capital is a major reason for small business failure.

Unfortunately, inability to secure funding prevents many would-be entrepreneurs from transforming their ideas into reality. However, money should not be an obstacle to taking a great idea from paper to the marketplace. By following a simple plan, anyone with a good idea and a smart plan for executing it can realize success.

The key is to build the small business around what you know and do best. Creating a business based on personal knowledge and skills prevents the need to rely on other people whose expertise often comes at a steep price. After developing a business plan, inform everyone in the personal network about the new venture. Do this in person and via email and telephone, each of which represent free marketing avenues. Ask these folks to spread the word and provide introductions to new professional contacts.

Social media is perhaps the best form of free advertising for an entrepreneur today. It provides exposure to prospective customers all over the world at no charge. Facebook, Twitter, Instagram, and other social media channels allow small business owners to interact with prospects and customers on a personal level without leaving their offices. Using social media to expand the contact list and engage and respond to customers regularly are easy ways to generate free buzz and develop corporate branding.

Monitor other startup expenditures carefully and use credit only when there is no other alternative. Expenses related to a home office can mount quickly, causing a new entrepreneur to begin in debt. Rather than equipping the home office with brand new furnishings, equipment, and supplies purchase used versions or buy items gradually, using revenue from the business to pay for them. Avoid unnecessary expenses such as top-of-the-line coffeemakers and flashy, overpriced business cards. Traditional cards with a catchy slogan will capture just as much attention at a lower price.

Individuals in the service business should think carefully when creating their receivables policy. Though customers may want to pay within 30, 60, or 90 days this may not be feasible for business operations. Base the policy on what facilitates continued business growth. Then, get to work because effort will increase the value of the business over the long-term. New entrepreneurs with little capital to invest must put their hearts and souls into their ventures in order for these to be successful.

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