How to make a start-up business with no money and alone
Tim Hoiseth
Chairman CNL Group | Business Psychologist | Sociologist | *Capacity building for the future
Ever wondered how you can start a business with almost no money? There are a lot of good ways to do that. Well, isn't it obvious that keeping the expenses low, or at a sustainable level will make your business survive longer? That is true, but only the half truth. That is an easy structure to follow if you provide something as simple as a service you as a person deliver alone. But then you only created a equity job, that is not really a scalable business is it?
A business shouldn’t cost much. In most cases...??
The dream example is that the structure of a company should be self sustainable and be highly automated and self sufficient. So isn't it as simple as: "Make a business structure that creates more money then what is spent". In theory yes, in practice its somewhat hard.
Scalability
Make the business scalable. Having the functions to scale the business comfortably, quick and at ease. When things go upwards in growth, and downwards when things aren't so good, both events being very dangerous for a start-up or any business. A liquidity squeeze for example, bad for business. A good scalable business model makes your company less vulnerable to this. Being able to be in a position where none of them has a great impact on your company, is a good move.
The key in scalability is to be able to create/ deliver as much as is needed, when things are going good. And still not take damage when things go bad. And being able to scale this after need at no effort. Sounds like magic? But if you scale your business right, this is not really any effort at all. And off course some stuff are more scalable then others, but you get my point! The key is to keep expenses low. No money no spending, kinda that simple. And remember this goes for start-ups.
Examples:
Approach 1
As an example of different thinking, lets look at a typical business idea in a typical profession, a seller selling software. A typical start-up idea would be to try to sell your competence and skills as a seller or consultant. Creating yourself a equity job in your own company, requiring you maybe to have an office space and expenses. So in other words, you have traded the responsibilities, and safety your employer would be legally bound to over to yourself. At the reward of having your own business, sort of. What a great deal for your client...
How can we approach this different? Instead an approach could be to arrange this in a different way, instead of selling your hours for a client. Arranging cheaper software solutions at a deal price or bulk discount, finding users and taking the profit in between. Actually creating an income from the software sale, instead of your hours traded. Creating your own sales funnel towards what you sell. Being a software reseller for multiple offices, this gives more potential, and is scalable if automated right. And it would be possible to grow and scale, something trading hours rarely allows. You could for example employ someone if things go great, to generate more or have more free time . The person in this start-up, maybe seeing a main strength in sales, practically does exactly the same job. But when planning the structure from a different perspective, making more profit and scalability to the business. By not just having the company holding an employment to sell hours, but providing a product by using skills as a seller. Making a service instead of trading hours for money.
Makes some sense? Well…..
Approach 2
In approach 1, we looked at a way of not selling hours, but instead making service. Another example is for example digital platforms, a scalability to distance yourself from what is offered in itself. Takes longer to build, but is extremely scalable. Platforms I personally find fascinating in its potential and possibilities. For most recruiting and staffing, professional competence requires time and workforce to organise. Searching professionals, finding costumers, even having employees to organize this and not to mention the organizational costs of this. Salary, accounting, systems and license. This is a typical model that requires more and more of everything, and an increasing complexity when a company grows. A typical problem in business with growth. Many business models try to fight this structure, and struggle to create scalability. One solution is to have a franchise among many other solutions.
In todays market possibilities, ideas like TheGig.Net, Uber, Airbnb rethink the structure of this outside the box thinking. A platform can for example avoid having any product or staff connected to what they offer, by having a platform as they do. For example the ones offering a service on a platform. They are actually the ones who does the sales, the platform itself is the structure and it requires limited organisation cost. Since the income does not come from the products offered on the plattform, but the service of the plattform itself. It is no fixed expenses because of this, and very scalable. It depends totally on the users of the plattform. The company can go to no sales, and also deliver huge amounts and adapt to this in very short time. A less scalable business structure would collapse under its weight a lot faster, due to its structure. Companies like Uber, TheGig network and Airbnb, their structure has a great deal of scalability. Being biggest in their field, with no ownership to the product offered trough their channels.
What would be possible to do?
Keeping start-up cost low and running cost low. To keep your business as sustainable as possible. Remember, you are maybe in a learning process. keep it cheap to fail. Focusing on the business structure and scalability, being agile all the way. Instead of focusing on a traditional start-up model of having an idea, making detailed business plans, implementing, increasing cost and using a lot of money on things like doing market research, subscriptions, office space and the like.
Launching this with a typical waterfall model. Well, this is what often has to be done for companies with a lot of investment capital to risk losing, tons of experience and access to skills and competence. For the average start-up instead focusing on structuring propper and implementing a business using your strengths. Learning along the way to create the business.
Your business is not supposed to be a burden on you. Something you have to look after that steals your freedom and life. Dont make a equity job, or a low payed and stressful job you pay a lot of money to make, and not a business. Your business should be something you enjoy as a process of learning, an asset that makes you money, that you hopefully can become something you love doing and become proud of.
Valuencer
6 年good reading :-)