Go to Top

3 Reasons Why No Startup Capital is Good for Your Small Business

Irene Kotov is the founder of Arielle. Through resume writing services and interview coaching, she ensures her client’s presentation of their most authentic and inspiring self through the recruitment process. 

I started my business, Arielle Careers, with no investment. Within the first 6 months from launch it was doing surprisingly well! 

If you think that you need capital in order to start that small business of yours, think again. Startup money is great, but it also makes you think in sloppy ways. A shortage of available cash, on the other hand, forces you to think creatively to achieve your business goals and helps you navigate around pitfalls, which stand between you and success.

Here are 3 reasons why having no dough in the startup phase can be used to your advantage. 

1. Become A Hardened Businessperson

It’s a basic law of evolution – when your surroundings are arduous, you learn to adapt in order to survive. You can’t afford to be lazy and complacent. And so, you learn to become shrewd, resourceful and clever. You begin to think outside the box for solutions to your problems. You learn the art of taking calculated risks.

For example, when throwing a few thousand dollars on a PPC (pay per click) campaign to test market response is not an option, you might investigate options which don’t cost money and which are easy to resist (which, ironically, tend to be more effective) – like talking directly to people about their needs.

This process of struggle can be very useful in helping to dramatically sharpen your value proposition and learn skills, which will help you outmaneuver your more cashed-up, lazy, competition.

2. Avoid The Seminar Junkie Trap

Because you can’t afford to throw money around, you also become less susceptible to the sales pitches of all the so called “business gurus” out there who are just itching to sell you their “money-making secrets”, seminars and “businesses-in-a-box”.

And there’s no shortage of those. They’ll take thousands of dollars of your money and promise that ownership of your dream business is just around the corner. They’ll sell you a dream that apart from their secrets/software/products, you don’t need to do much else.  Some will even suggest to you that you can be in business even if you don’t know what problem you can solve in a marketplace and don’t have a product or an idea. 

The trap there is that you can spend a few years and many thousands of dollars, being a seminar junkie. You’ll end up knowing a lot of business theory and will probably end up owning a dozen domain names and all kinds of weird software.  

But when someone asks you about what value you deliver, you don’t know how to answer that question. 

3. Stop Being A Copycat

When starting a business, there’s a huge temptation to emulate your competitors. You may check out their websites to get “inspiration” for your own web copy. Or you look at the way they package their offerings and make yours a tad different – usually by claiming that yours is a tad better while making it a bit cheaper.

And if you have money to burn, you can pretty much copy their business model, marketing and offering – and purchase everything you need to launch your own version of their business. 

Or so it seems on the surface.

Look deeper, and you’ll see problems with this “rich guy buying his way into a marketplace” approach. The main problem is that the things you can easily replicate are rarely what gives your competitors a competitive advantage over you.

And the things you can’t easily rip off – like tested and faultless processes, culture, customer relationships style, company philosophy and IP – sit at the very heart of your competitors’ businesses – and are instrumental in their success.

Which means that if you try to buy your way into business by copying your competitors, you’ll probably end up spending a lot of money on things that don’t give you much power in the marketplace.  

 

In Conclusion

If you’re serious about starting a small business and you’re planning to do it with little or no startup capital, you’re going to live through a trying and potentially stressful time.

You’ll find yourself outside your comfort zone and, like most entrepreneurs, will have days where you feel like giving up.

However, this very act of building and managing a business that has little resources and can tolerate even less error, will teach you invaluable lessons.  You’ll grow as a human being and as an entrepreneur, and you’ll learn lessons that would have otherwise taken you years to learn had you had more funds.

The best part is, when you look back on your business, and compare where you were to where you are today, and you say that you created this all on your own… You slogged it out. You made your dream happen the hard way… that will be satisfaction unparalleled. 

Interested in learning how to fund your business?! Watch and learn from angel investor Judy Robinett. For more on getting your small business off the ground– including funding!– check out resources and recommendations here.

photo credit: danielmoyle via photopin cc

  Sign up and receive updates and the latest in recommended resources… straight to your inbox!




About Irene Kotov

An HR Manager who has gone from partnering with the employer to the employee, I started Arielle Careers because of my belief that everyone deserve to find and follow their passion, and because I believe that work should be something that we all love. Through Online Presence Creation, personal branding, Resume Writing Services, career coaching & Interview Coaching, I ensure presentation of one's most authentic and inspiring version of themselves, creating an impact that has them stand out in today’s market, and as a result, will have them in the sort of company and role that they care about!
  • Eric Chidubem

    thanks, this article was really helpful

  • Quibs

    I needed to hear this. Thank YOU.

  • Amanda

    Very very good advice. We are currently working on our flagship product – on a shoestring budget of $20k from my own credit card. And while I know that I have to spend money to make money, having this limit prevents recklessness, getting suckered in, and promotes innovation.

    I’m watching a friend fall into the seminar junkie trap as we speak – She’s just been to a $13k seminar, and signed on to pay the guru $30,000 for one on one advice – and yet the advice and the plan he has sold her on completely disregards the past 12 months of work on her as yet unfinished product – and drags her in a new direction.

    I get how uplifting having a ‘guru’ see possibility in your idea can be, but at the same time, it takes a huge jump to make your thousand dollar product into a $25k product – but she has been taken in by the compliments and the dream.

  • Pingback: Lessons Learned at Mozilla()

  • Alicia

    Are you losing sleep at night worrying how to get legit loan lender?
    instead visit Hinosword Loan Service today, we offer private, commercial
    and personal loans with very low annual interest rates as low as 3% in
    one (1) year to fifty (50) years repayment period anywhere in the world.
    We offer loans ranging from $5,000 to 100million USD. Our loans are
    well insured for maximum security is our priority. Contact us today at
    hinoswordloanservice@gmail.com Thank you