Starting a business without initial capital is a process of building a foundation while minimizing risk.
There are three things needed to start a company:
Since we’re doing this without money, we’re left with just Customers and Products. The easiest way to get this started is with a side-hustle. The idea is that you keep a stable job to provide you regular schedule and some financial stability and work on your business during the time you should really be sleeping.
Your side-hustle doesn’t have to be the exact business that you will start but it should move you in the general direction of your interests. If you think your business will be in the food space consider delivering grub-hub/instacart as a side-hustle. Want to get into transportation? Look into driving for Amazon. You get the idea. The side-hustle gives you some extra cash while letting you research your domain. Most people who start a business don't really research the market needs before jumping in so make sure you really understand the space.
There are a lot of examples of entrepreneurs getting started by side-hustling. Michael Dell was hustling computer for friends while he was a student.
Daymond John, the founder of clothing company FUBU, was hustling hats on New York street corners.
The founder of Mattel sold picture frames as his main thing and used the scraps of the picture frames to start building and selling dollhouses.
Lara Merriken, was working in Whole Foods stocking shelves working on her product the Lärabar, which gave her insight into how Whole Foods works and it also gave her access to store buyers willing to try her product.
Starting your business as a side-hustle gives you the advantage of financial stability but it also gives you a unique view of business problems. It may also give you access to customers.
If you’re trying to start a company with little or no money one thing you try to do to get initial cash flow is to get a customer to pay upfront. You can sometimes do this by building a prototype or a sample.
Prototypes don’t have to be expensive, they can be drawn on a piece of paper, cut out of cardboard, hand made models, or 3d printed. Certain businesses are harder to start without funding but most business ideas can be prototyped.
If you’ve built a prototype or sample of your product then test market the product. Ideally, you can put it in front of real customer/buyers to see if there is interest and at what price. Services like Kickstarter, Fiverr or Etsy can give you a platform to sell products. These types of services require very little or no up-front capital. You can get customers before committing to a lot of financial up-front risk. Some of these services won't scale well with a growing business but your initial goal is to get initial traction.
If you have a service business you may also be able to charge an upfront-deposit or down-payment giving you initial cash-flow. This is common in many consulting, construction, and subscription businesses.
Your early samples and prototypes can also give you customer feedback on what people like or dislike about your product.
Initial sales are unlikely to have a significant initial financial impact but they will help you continue to improve your product and they will get the initial flow started. Initial sales are sold one-by-one, so expect to get personal when you start the business. As your product or service gets out into the real world, you’ll start to develop word of mouth about your business or product.
For companies that have Money – they can spend money to get customers. But starting a company with little or no money, you need to make your products really great to get the word-of-mouth and attract more customers.
As the business grows, the revenue flow starts to flow and you’ll be able to spend more on growth and making your products, prototypes, and samples better and better. I started my consulting business with no capital, it was a side-hustle while I did other work. I grew it into a multi-million dollar business that I recently sold. Now I angel invest in startups and make videos on entrepreneurship.
Good luck on your journey!