You’ve written a very good business plan. A friend reads it and agrees that it’s a bomb! You show it to a respected business mentor who says you are in for a breakthrough! Your sister’s boyfriend exclaims: “This is one of the best business plans I’ve ever seen in my career as a banker!” You grin from ear to ear thinking your million-dollar idea is about fruition. You begin imagining all of those goodies-your dream air conditioned office with all the latest office equipment plus, a good employ or self-motivated staff, a nice BMW and great business contacts.
You hear enticing adverts by some financial institute that they are here to support SME’s. An official visits the studio of the particular radio station to say all the nice things. You think: Yes! That’s the real deal! I can access a decent loan for my business”.
All of a sudden, though, you realise those hopes aren’t coming true; they fizzled out! WELCOME to the World of Business!
The above scenario is a likely graduate at any level of the educational ladder who wishes to start-up. Many of such graduates as well as employed people would like to start-up. But the question arises: “How do I raise the capital?”
The fact, though, is that it is a huge fallacy that you need cash to start a business. The truth is that your skills are the greatest capital you’ve got!
Today, I want to show you how you can bootstrap and start a multi-million dollar business with next-to-no cash! But to begin with, let’s look at what type of business will best suit your interests.
I would not advise you to go into manufacturing if you don’t have the capital. Here are my reasons:
Firstly, for even a small-scale manufacturing set-up, you require a physical location. Add that to hands that you need to employ, electricity bills, water bills and the like and you’d realise that your overhead costs would be hitting outer space.
It is even worse if you acquired a loan from a bank. While it takes time to set-up and begin operations, your bankers would commence working the interest on your loan the moment the money hits your account; whether you’ve started operating or not. And this in the sight of the fact that you might require about six (6) months to begin operation and another maybe three (3) years to just break-even.
Manufacturing is therefore not for you as a start-up with capital challenges. That is why I would recommend the services sector.
There are so many services that you can provide without the need of a physical location coupled with all the other costs associated with manufacturing. You’re thus able to start small and grow with time right from your bedroom! And remember, successful companies such as HFC started in a garage.
Another area I would recommend is selling physical goods. A lot of companies would like to have a large salesforce but can’t afford it. You can approach such as a free-lancer and ask for wholesale prices. If you can afford it, buy samples and use these to establish sales leads, pick the items, deliver and make a modest profit.
Yet you may wonder; without a physical office how do I receive my clients?
Depending on the kind of service, clients may hardly come to your office. And even if it becomes necessary, meet your clients at a restaurant over a glass of fruit juice. If you can afford lunch, all the better. After all, that is what many of those who have impressive offices do any way. But how do you proceed? Here’s how:
Select an appealing business name. The name should be easy to pronounce, easy to remember and should be able to create a picture in the mind as to the type of business you are into and the quality of services to be expected.
Then check with the Registrar General’s for the availability of your chosen business name and register it. Initially, simply register as a sole proprietorship; that is cheaper than a limited liability company. You can always convert to a limited liability company when your business begins to make decent income.
Then proceed to design a logo. Get yourself a professionally design that communicates effectively the embodiment of your business and its uniqueness.
If you can’t afford a professionally designed logo, try a logotype. A logotype consists of your business name or its initials written in a characteristic font(s) and colour(s), e.g. creativity, you can use CorelDraw or even Word for this.
The next stage is to get professionally printed call-cards. With good negotiating skills you can get this done at least cost. Make sure you concisely summarise aspects of your business on the card in bullets. This is a smart way of advertising your business since everyone who either accepts or sights your card gets a good idea about what services you provide.
Afterwards, you can ask the printer for a soft copy of your logo or logotype in jpeg format and use it in word to design a letterhead. You don’t need the printer to do this for you. Just get good quality A4 paper and use this to print your letters for a good impression.
Next, open a bank account. This is very useful for receiving payments and for paying out. Besides, it adds to your credibility when clients know they’re paying into a business account and not a personal account. This is especially useful since you don’t have a great office to receive clients.
On your call-cards, make sure you have an email address and a website address (URL). If you can’t afford a professionally designed Web site, use an online do-it-yourself web site tool. While it will not have your choice address (it may be yourname.toolprovider’sname.com) you can still have a Web presence; very important in the modern world. You can always contract a professional to do a simple but functional Web site for your business once you can afford it.
With your call-cards, letterhead and website ready, your business has started.
The extent to which you are able to harness ICT with your business will go a long way to lower costs and increase efficiency. Thus mobile phone especially should be your personal secretary.
You don’t need an expensive cell phone to have WAP or Internet functionalities. The cost of your mobile phone does not guarantee business success. You can always get very affordable phones with such capabilities. But be sure to acquire a good brand and durability. With this, you can send/receive emails and browse the Net on the go.
Also, instead of using family and friend facilities provided by your mobile network for social contacts, why not add business contacts you regularly call rather? That would save you a lot of cost.
If you don’t have a computer, go to an internet café to type your documents. Just get yourself a flash disk. You can print your documents there as well. So even if you have a computer, don’t saddle yourself with acquiring a printer if you can’t afford it. You can use the café. Besides, these days many people and businesses have email addresses. So instead of printing, send documents via email. That also saves you some transportation costs, you know. Very important!
At this stage, try to do everything yourself, as much possible. If you don’t know how to perform a particular task, say sales for instance, read about it online. For you to succeed as a businessperson, don’t neglect the value of reading. Make the time to read wide. And get friends in specific fields to give you a few practical tips as well.
In the area of Accounting, you can hire the services of a free-lance, part-time accountant who can keep your books and advise you. He will also give you a simple format to keep daily records. You don’t need a full-time accountant for that.
If ever you need to hire someone, make sure that person would add value worth at least three times what he/she is paid.
However, you must develop good habits and qualities that will enable you to run your business successfully.
Be punctual, honest, frugal and hardworking. As Marcus Garvey’s quote states, you need confidence.
While running your business, you’ll come across so many disappointments and set-backs. But with confidence, you’ll be able to brace yourself and face all of them. “You are the only person who can use your ability.” Zig Ziglar. Hence, since you know what you are capable of achieving, just remain resolute and focused.
In business, every encounter is an experience you can draw on in future. Hence strive to see positive things in misfortunes. Develop a sense of humour that will help you carry on even in the direst of circumstances.
Capital for start-up is certainly hard to come-by. While it is true that certain institutions should be up-and-doing to curtail the challenge, we as individuals can also creatively circumvent that challenge. It is truthful that you can start a business without a Pesewa! Why not try it today?