Technology Advances

Do you have a grand idea? Are you thinking of starting your own business but are somehow discouraged by the skinny figure of your bank account? If you are, then this post is most definitely for you!

Before we proceed with our very interesting topic, let’s take a good look at a question asked by Henry Joe. An entrepreneur with little or no funds to start his business.

Henry Joe:

Hello Mr. Sam!

My name is Henry Joe. I currently work for a leading bank here in Lagos-Nigeria.

Three years ago, I had this great business idea which I really wanted to implement but after four months of struggling to raise funds, I decided to take up a job in a bank.

I’ve been working at that same bank for over two years now. Yet, I haven’t been able to raise enough funds to start my business. It seems like I’m pushing my business portfolio under the carpet as my daily bills keep screaming in my face.

I really want to start the business and implement this very exciting solution which would bring a positive change in the health sector of our country. Please, what should I do? This dilemma is really making me frustrated and deeply discouraged.

Entrepreneurship starts with an idea, a dream, a vision. For some, the idea is usually the initial propelling force until the money factor creeps in and slows things down.

This shouldn’t be so.

Finances are important to run a business but a lack of it shouldn’t stop you from taking the big step towards achieving that dream.

Money is a tool for business and not a barrier. Chasing after money shouldn’t be a goal.

It is possible to start a business with little or no funds if you have the right combination of skills, proper work ethics and a great marketing strategy. Getting a loan is not the only means to start up a business.

We’ll take a look at other means but first let’s touch some key points:

HOW REAL IS THIS IDEA TO YOU?

First, you must believe in your dream and also believe that you can achieve it. You are your very first client. You must be able to first convince yourself that your dream is achievable and then savor that idea. Season that idea with the right amount of knowledge, research and a great strategy. Once your idea tastes good and is palatable for mental consumption, go ahead and sell that idea to potential investors.

KEEP YOUR EYES ON THE BALL

At every stage in business, you must always keep your eyes on the ball. The ball consists of your vision, your goals and your objectives. Here are some of the things to focus on when starting up a business:

1. KNOW THE TERRAIN

In war and in business, knowing your terrain is important. Very important. The terrain is the playing field on which you and everyone else competes. Knowledge of your field can make a big difference in how you approach business matters.

Knowing your terrain involves: -

- Gathering relevant information about the business you want to venture into: Doing proper research, asking the right questions. Generally equipping yourself with basic knowledge of how to successfully execute, run and manage that business.

- Explore the terrain: Get to know your competitors. Find out who is successful in that field and learn from them. Get mentored by experienced and successful people in business. Don’t just learn from their success stories, learn from those stories of failure they hardly share with everyone. Get information on the best business strategies to use and how to use them.

- Team up with players who know the field. You can also ask your mentors for recommendations and advice on who to team up with. And when they give you their recommendations and advice, take it seriously. If they do not give you any recommendation, you can always create your own team from scratch.

2. HAVE A BUSINESS MODEL AND A BUSINESS PLAN

Now that you know your terrain, it’s time to draw up a business model.

A business model defines how your business will make money. It ascertains the rationale of how a business, creates, delivers and captures value. A business model establishes:

- Who you are creating value for

- Who are your most important customers

- What value you are delivering to your customers and what problems you’re solving

- The best cost-efficient methods to use to reach your customers

- What value customers are willing to pay for and how they will prefer to pay

- Who your key partners, suppliers and what your key resources are

- How to generate revenue

A business plan is a vital roadmap for business success.

A business plan should serve as a business guide on what you want to achieve and how you will do that. It should outline the structure of your business, the product or service, the customer, the growth potential and the financials.

NOTE: A business model can be seen as a destination, while a business plan should serve as a roadmap on how to get there (to the destination).

Look out for our post on How to create a business plan.

3. HAVE A GREAT MARKETING STRATEGY

To paraphrase Peter Drucker: Consumers do not buy what you sell. They buy what has value to them.

A marketing plan/strategy is essential to the growth of any business.

Most marketing strategies can be capital-intensive, some can be low-cost while others can be implemented at no cost at all.

A good marketing strategy will help you identify your best customers, understand their needs and implement the most effective marketing methods.

4. BRANDING IS KEY

This should be a part of your marketing strategy. Branding is so very important. It is oftentimes ignored by many start-ups and small organizations but that shouldn’t be so. A poor branding strategy has a negative impact on any business.

Branding goes beyond just a catchy business logo, proper branding actually increases the value of your business. It also provides employees with direction and motivation, and it makes acquiring new customers easier.

Your brand needs to pervade your entire business.

Your brand tells a unique story about your business and what it stands for. Proper branding has a lot of benefits such as:

- It creates trust

- It tells people about your business DNA

- It fosters identification

- It supports advertising

- It sets you apart from the competition

- It provides motivation and direction for your team

- It inspires your employees

- It generates referrals. It makes it easy for clients to refer your business to others. Etc.

5. GET EXPERIENCE

Gather as much experience as you can. Volunteer your services in exchange for knowledge or pay to get trained. You can also learn from successful people in your line of business. Work for them and learn from them. Go for trainings, workshops and conferences. Network with people within and outside your field of business.

6. FIND YOUR DREAM TEAM

What makes a business successful is the execution aspect of it. Discover your strengths and get relevant people to join your team. Identify what roles you need for your company to become successful and go scouting. Identify these people and sell your dream to them. Bring them onboard and work with them. You should have the right people onboard.

7. HAVE A MENTOR

Get mentored by great business men/women. Learn from them and let them guide you on your business journey. A good business mentor should recommend you to other successful people in your field of business. It is helpful to have a mentor when going into business.

8. TIMING

Timing is key.

A product or service that is introduced at the right time to solve an eminent problem would thrive.

Imagine if you provide a solution to the current economic challenge Nigeria is facing at the moment, the recession. For example, if you introduce a cheaper means to buy and ship in goods irrespective of the dollar rate, your business would be solving a big problem for most businesses and individuals who have to import goods into Nigeria from countries who make use of the dollar as their official currency.

Another example is, importation or manufacturing of good quality but cost-efficient hand sanitizers during an Ebola epidemic.

Now, these are just scenarios but most investors will love such ideas and would be willing to invest in a business which aims at providing a service or product that is needed or is in demand and in return be profitable enough for them to get an impressive Return on investment (ROI).

Execution matters a lot but timing matters much more.

After you do all the ground work, always be sensitive to trends and needs in the society.

1)     LET YOUR PRODUCT SOLVE A NEED

To apply this tip, you must have a very unique solution. You must have also followed done your homework by doing a proper product survey and general research about the terrain, your competitors and potential investors. Now, the next step is to package the idea and present it to an organization that is in need of that service. You don’t need finances for this all you need is incredible marketing skills, an in-depth knowledge of the product/service you are offering and relevant information about the organization you are presenting this idea to.

It’s irrelevant to mention your financial status when you present this idea to them but you must ensure that your execution cost is included in the first installment of the project cost. If it’s a payment agreement of two installments, include your execution cost in the first installment. This way, you can execute the project seamlessly without any financial hitches.

For example, Mr. Ken is a Database Administrator with a good database software that can help organizations easily manage their database locally and remotely with ease. Company A has been experiencing challenges in managing their database for years. They have lost very relevant records and can’t effectively keep track of their data. Mr. Ken goes hunting for potential clients/customers to present his product to. His friend who works for Company A then tells him about their eminent database challenge. Mr. Ken presents his product to his friend who encourages him to present it to his boss. Mr. Ken presents the product to his friend’s boss in Company A. Company A is thrilled with the presentation and decides to implement the solution to solve their database challenge. Company A pays Mr. Ken the first installment of the project cost which unknowingly to them, contains the project execution cost. Mr. Ken uses the first installment of the project cost to execute the project successfully. The software is successfully tested and Company A begins to use the database software. Company A then pays Mr. Ken the final installment which is basically his profit.

This is a very effective method for zero-financing.

2)     PARTNER WITH A LOCAL VENDOR ANONYMOUSLY

This method is another smart way to successfully execute a business deal with little or no finances.

In this method, you basically do not need to have any sort of capital to startup your business. All you need is a good business deal and a strong drive for business.

To also apply this method, you might also have little or no experience or knowledge of the business deal you’ve secured but you should have relevant knowledge on how to run and manage a business in general.

This method best suits individuals who have no capital but have secured a business deal/contract. The deal/contract is usually one in which payment is made after the successful execution of the project/deal/contract. Once the deal is secured, the individual partners with another business to execute the job. The other business would be responsible for the execution but would do this anonymously without the knowledge of the client.

For example, Ann secures a deal to supply one thousand air-conditioning units to a new serviced residential estate. Ann signs a contract for the deal which indicates that all payments will be made after the delivery of the air-conditioning units but Ann has no capital for this business deal. So, Ann goes to a reputable air conditioner (AC) retailer to discuss this deal and proposes a partnership which gives her credit as the contractor. The vendor agrees to her terms and handles the supplies without an initial down payment. The supply goes smoothly and Ann is paid in full. She then transfers the vendor’s product and delivery fee to him and they both gain greatly from the business deal.

Summary: What you need to do is propose a business solution, secure a business deal and source for a third party to help execute the business deal anonymously.

This scenario is another legit method to startup a business with zero-financing.

3)     PARTNER WITH A REPUTABLE ORGANIZATION

This method is a very interesting and smart way to successfully execute a business deal with little or no finances and at the same time gain experience and knowledge about your field of business.

This involves an Individual without a registered business name or company selling a business idea to potential clients/customers, securing the business deal and then partnering with a registered company/business to execute this project. The registered company/business would make their resources (office space, documents, business tools and/or staff) available for the execution of the project. Before the project is executed, both parties will sign an agreement which would state how all profits will be split and how the project would be executed.

This method, requires little or no finances to startup the business, since the registered business would bear all running cost as indicated in the partnership agreement. All that is required is a great business idea, a great business and marketing strategy, a business deal, an existing and reputable registered company/business and a partnership agreement with the registered business. You should also have done your product research, market research and also have relevant knowledge on how to run and manage that business.

For example, Dave is a dynamic business man who has worked as an IT trainer in a leading IT school in Nigeria, he has also worked as a banker and a secondary school Computer Science teacher. Dave decides to start up an IT training business but has little or no finances to start up this business.

Dave shares his business idea with the HR Managers in some leading banks in the country and secures a business deal after six months of aggressive marketing. The bank specifies that they want their staff to be trained in a training location outside the bank. The bank also wants eighty of their administrative staff to be trained for four weeks.

Dave has no financial resources and has no business facility to execute this project, so he goes into a partnership with an existing and highly reputable Training Centre in the city where the bank is located. He makes use of their training facility, their training materials, official documents and also, their staff to execute this deal.

He is fully involved in the execution of the project but the deal is officially executed by both parties.

In this method, the partnership isn’t hidden and it is stated clearly that the business deal is executed by both parties. Another advantage of this method is that the individual gains more experience on how to successfully run, manage and setup the business in question. It’s a way to learn on the job and gather more experience.

4)     GET INVESTORS

Don’t just believe in your dream, get others to believe in it too. To sell a business idea to an investor, you must have thoroughly done your homework. No one wants to invest in a business that would fail immediately after it startup due to poor planning and a bad business strategy.

Once you have thoroughly studied the terrain, structured and packaged that business idea, it’s time to sell your business idea to potential investors.

Look for individuals/organizations/banks who are willing to invest in your business idea. Be flexible with your terms but very cautious when signing contracts/agreements. Get a third-party to read through agreements before you sign; preferably, a lawyer.

I wish you the best as you pursue your dreams and achieve them!

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