How to Start a Business with No Money

You probably never thought you’d see the above title on a practical small business platform, but it is possible to start a business with no money.

I have looked into starting a business with as little capital as possible before, but I have recently laid a lot of foundation to look deeper into this.

Now I have already said that the least money you have the lower you have to start in your businesses supply chain unless you are willing to be an agent then you can be anywhere. But this is not about agents only, this is about starting your business with no capital.

Do you really have no money?
The first thing to starting a business with “no” money is to establish if you really have no money. I often ask people who say they have “no” money is “who feeds you?”, “who houses you?” “how do you get around?”. Sometimes people have money to spend a lot on unnecessary things and this makes people think about how they can save money that can go into starting a business. While I find others are looking for investors to risk their money and don’t want to put up theirs. Those people won’t get investment anyway and might as well put up their own money. But let’s say you really have no money.

The first thing you need to establish is that do you really have no money. I often find people who live comfortably but then say they have no money and they want investors to risk their money (preposterous I know). Ask yourself how much are you spending a month and can you do without. Let’s say you come out saying you still have nothing.

Learn a skill
The easiest way to start a business with no money is to learn a skill that would allow you to ask a client for a deposit to start the job. Many people’s minds wander towards the internet economy such as web development, but this can be done in any business, where you are selling your skill as labour. The client can buy the raw material and even supply the equipment and you use your skill to make something. It can be done in building, fashion, and any type of design. When you learn a skill, you don’t just have to offer a service on its own, you can become part of a value chain.

Outsource | Be a middle man
The second way to start a business with no money is to get work and outsource it. What happens here is, the client will ask you to quote, you take that job to a  competent person and ask them to quote you, you add a markup and provide the client with the quote.

This works better in an industry in which you have some skill and some knowledge. If you are a graphic designer, you can make t-shirts or signs by outsourcing the printing or vinyl cutting.

But you don’t have to do part of the service. If you know a plumber, electrician handyman. You can start a service to get those people clients and take a commission.

Become an agent
Another common way to make money with no outlay is to connect buyer and seller or sell other’s people products on consignment.  There can be an agent in every part of the Supply Value Logistics Chain. Even in logistics, you can arrange to fill a truck or shipping container as an agent. Read more about becoming an agent.

The Smuse Way
Do your effectuation theory

Bird in Hand Principle – who you are, what you know, and who you know.

Affordable Loss Principle – the time the money the effort you can afford to lose. You have no money fine.

So we have established that you have no money.

Supply Value Logistics Chain Analysis
Smuse says you have to go as far back in the Supply Value Logistics chain in your chosen business as possible until you can afford. So you don’t have money to manufacture, or wholesale or retail but after the consumer has the product can you clean it, service it, repair it, refurbish it and of course…

Recycle it
Usually if you have no money to start a business, you can start enter the recycling industry, either collecting waste and sell it to a recycler, making something from recycled materials.

Your first option, right at the end is to get into the recycling industry, collecting waste and selling it further down the recycling value chain.

If you bird in hand came back with someone who you know and that person has a business, then maybe you can be an agent for them. Read more about what an agent is.

Connecting Skills with Equipment & Spaces

  • If you have skills you can connect with someone that has a piece of equipment that can be used to start a business. If you know how to bake you can partner with someone that has an oven and someone with money to buy ingredients to start a business.
  • Same story in you have a piece of equipment that you don’t know how to utilise, you can partner with someone that knows how to use it and you can do the management and the person does the technical
  • If you have a space that can be used to start a business, you can let a person with skills and equipment come and use that space as premises.

The above three scenarios are possible but challenging to pull off in SA due to human nature. It is very difficult to find genuine people who are not greedy who won’t try to screw you over. Without a legal agreement spelling out each persons role it will be hard, it will even be hard with a legal agreement because legal agreements have to be enforced. It’s a pity because there is a lot of potential here. I have done this before with people I know and trust so it is possible but even challenging with people you know.

Bartering skills
If the bird in hand came back with what you know you can exchange that skill/labour for something other than money, which you in turn can resell. But what if you have no skills? All is not lost. You can do something like barter cleaning in exchange for a waste product a company disposes of which you can in turn sell or process again.

Some ideas
You arrange to clean a run range in exchange to keep the shell casings that you can clean/tumble and resell again. The gun range doesn’t have to spend money on a cleaner and you don’t have to spend money on stock for a business. Win win.

Same can be done at a golf course you can ask to do the gardening at a golf course and they let you keep abandoned golf balls.

These are not glamourous or profitable, but the more skills you have the more potential. If all you can do is clean, that is not worth much I’m afraid because there are so many cleaners out there.