The simple answer is yes. Now, are you ready to get to work?
My wife and I had been dating barely six months when we had an ‘aha’ moment that culminated in starting our own business. We decided to commit $1000 each to see if we could get our idea off the ground.
Upon reflection, it is clear that we began our business with a number of distinct advantages. These advantages are as follows:
- Two founders with complementary skills (a generalist and a specialist)
- We had a business idea that leveraged those skills AND solved a problem
- Our business required minimal financial outlay to start
- Our product was digital (which meant it was scalable)
- We only sold subscriptions
Based on these significant advantages, here’s my advice:
1. Find a co-founder who brings complementary skills
Fortunately, I had a co-founder from day one. Our skills complemented each other perfectly.
I was a generalist with digital production experience (design, web development, marketing, social strategy, business knowledge), while my wife was a specialist with domain specific experience (school teacher).
I had the lofty ambition of growing a multi-million dollar business, while my wife had the discipline, day-in day-out, to make it happen.
These complementary skills were crucial to our business’s success.
2. Start with an idea that solves a problem AND leverages your skills
Teachers are time-poor and often overworked. Our product provided relief from the planning side of teaching, giving them more time in their day
With my digital background and my wife’s teaching background, we combined those skills to create a subscription based service for teachers. My wife would devise the content and I would design the finished poster or activity.
Our subscribers could log on and download the resources they needed to teach. Because we saved them time, they were more than happy to pay us.
Our product solved their problem.
We leveraged our combined skillsets to create a product that solved a problem, which in-turn created a business.
3. Create a product that requires minimal financial outlay
The beauty of our product was that the main ingredient to create it was our time.
Here’s a list of our expenses for the first few months:
- Adobe Creative Cloud — $50/month
- Web Hosting — $10/month
- Google G Suite — $10/month
- Domain name — $20
(We didn’t form a company until we had been trading for three months, so I have excluded those costs from this list.)
Here’s how we used our time each day:
- Woke up, checked customer support emails and scheduled social posts for our business
- Worked 8 hours at a paying job
- Came home and worked on our business for 2 to 3 hours
- Worked on our business most weekends
We had the time, so we used it.
We didn’t have a mortgage or children (we have both now) so we had no other commitments. We were able to commit the majority of our ‘free’ time to the business. We traded nights out for nights in. As we used to say, it was ‘two years of pain for a lifetime of gain’.
The beauty of maintaining a day job to pay the bills meant that it wasn’t ‘all or nothing’ for us. Plus, we could reinvest every cent earned back into the business.
4. Create a scalable product
Our products were digital downloads. This meant that they had a high up-front cost to create (time), however this cost was amortised over hundreds (then thousands) of customers. We could create the resource once, and it could be downloaded millions of times.
This was a huge bonus for our business. It meant that we could grow without worrying about supply. It also meant that we didn’t have cash tied up in inventory (however, with the rise of drop-shipping, many physical goods based businesses also have this advantage).
5. Subscriptions over one-off sales
If you can, sell your product or service as a recurring subscription. This is honestly one of the best decisions we made. Recurring revenue has many benefits, such as:
- predictability — you begin each month with a base of expected revenue. Whereas, with one-off sales, you begin each month at $0.
- measurability — it is easier to monitor your cash flow and forecast revenue months into the future based on your growth and churn rates.
- increasing margins — it’s much easier (and cheaper) to retain a customer than it is to acquire a new one. Each month (or year) a customers stays with you, their life time value increases.
6. Give it time
Stick with it. A business isn’t built in a day, a week or a month. You need to have the patience and discipline to persevere. You also need the humility to know when your product isn’t hitting the mark.
What did we spend the $2000 on?
Outside of the expenses listed above, we spent it on Facebook ads.
It was 2013, so our ads absolutely worked. We accumulated thousands of likes, which gave us a platform to share content with an engaged audience.
Facebook ads are still incredibly effective and we still spend on the platform each month. The targeting is far better than when we started, however the competition for social real-estate has increased.
When you’re starting with such a limited budget, you need to find a way to spend money that guarantees sales. In the digital space, this usually means spending money that will drive traffic. With Facebook ads, we knew that for every dollar we spent, so long as we were getting more than a dollar back, we could grow.
Were we just in the right place at the right time?
Perhaps. However, we certainly made the most of our opportunity.
You can do so much with so little in this day and age. Thanks to the internet, there has never been a better time to start a business. The barrier to entry is so low. If you have a computer and an internet connection, you’re in the game.
As a result, it’s also highly competitive.
On the one hand, it’s incredibly easy to start a business. On the other hand, it’s incredibly hard to build a successful business.
But if you take a long-term perspective, and you have the discipline to work on it every day, you will put yourself in a stronger position than others and give yourself the slightest chance of success.
How can you tip the scales of success in your favour?
Simple. Execute better than your competition.
That’s the beauty of a free market. The market decides who wins.
Sure, things will occur that are completely out of your control. However, most of the time you can choose how to react. It all comes back to execution.
Remember, ‘better execution’ isn’t only reserved for those who can afford it.
Better execution means caring more than your competitors.
Genuinely caring for your customers. Caring that your product is exceptional. Caring that your customer support emails are replied to as quickly and professionally as possible. Caring that your Facebook page is providing exceptional value to your audience.
This level of care is often easiest in the early days when the numbers are low. You can absolutely afford to give each customer the royal treatment. There are no excuses. If you fail to care, your business deserves to fail.
All of this just takes time. If your business is your top priority, you’ll make the time to show this level of care.
I’ll give you an example:
I am obsessive about customer support. When my wife and I were the first line of contact in those early days, I would stress out if a ticket was not responded to in under four hours. This was such a simple, cost effective win for our business. The number of times we received replies of surprise, due to the speed of our reply, said to us that no one else was doing what we were doing. It was one way we executed better.
Failure is a very real possibility
Once you’ve taken the time to weigh up all of this information, you then have to wholeheartedly embrace the fact that you might still fail. If this doesn’t sit well with you, then it might not be the best idea to start a business.
For me, the thought of not starting a business was far scarier than the thought of starting one and failing. With this mindset, it was very easy for me to at least try.
Entrepreneurship isn’t for everyone.
In summary, the answer is yes — you can start a business with little to no money. But, as you will have learned, there are myriad factors that align and combine to produce a successful business.
Sometimes it’s blind luck — however, I am a firm believer that most of the time you have to make your own luck by first taking a chance.
Remember, a business that never starts, has already failed. Starting a business gives you a chance of success.
The question is, will you execute well enough to take it?