By: Michael Glauser November 9, 2016
“I want to start a business but I don’t have any money.” I hear this statement over and over again as I work with aspiring entrepreneurs. Many of them have sound ideas, but feel they need a lengthy business plan and a large amount of cash to get started. The reality is, most successful entrepreneurs end up bootstrapping their business. If you are passionate about what you are doing, there are always ways to get things done with limited resources. Here are five keys successful entrepreneurs use to build thriving companies.
- Build a Brain Trust of Free Advisors
Nicole DeBoom was a professional triathlete for 11 years. She knew a lot about women’s sports clothing, but very little about the apparel industry. Her solution was to find a group of advisors who could teach her what she needed to know and introduce her to other contacts. Nicole explains: “When I started out I had coffee meetings ten times a week. I just started picking people’s brains.” The end result: Nicole found the resources she needed, launched her company, and has now sold over $25 million in women’s running skirts. Her advisors have been a huge key to her success.
- Find an Enthusiastic Angel Investor
One of the goals of building your brain trust is to find potential partners who want to get involved in your company. Jeff Wester is a great example. Jeff wanted to build an old-fashion Black Smith shop in Sisters, Oregon. He found a wealthy mentor who had built a blacksmith shop earlier in his career. He gave Jeff a piece of ground and funded his new shop. He then created a promissory note so Jeff could pay him back over time, which he was able to do.
- Start with Borrowed or Used Equipment
Justin Gold was making the best nut butters on the planet with a food processor in his kitchen and selling his creations at farmers’ markets. When he was ready to scale his company, he talked with several large peanut butter manufacturers. They told him they couldn’t add honey, maple syrup, and other ingredients because it would burn out their large industrial grinders. Justin wondered why he could do it in his kitchen, but they couldn’t do it in their multimillion-dollar plants. So he went out and found some old used industrial food processing equipment for almost nothing. Justin recently sold his business to Hormel for $286 million.
- Find Something to Sell to Get into the Game
Allen Lim spent his early career in the cycling industry. He created several all-natural hydration drinks that some of the top cyclists in the country loved. He wanted to turn his hobby into a business but had not money. He found an old used funnel cake cart and converted it into a burrito kitchen. He sold burritos at running and cycling events around the country to pay the costs of marketing his new products. With the revenue from burrito sales, his total cost to launch his new products nationwide was $800. Today, Skratch Labs is a major supplier of healthy products to both professional and amateur athletes.
- Sell Your Product Before You Create It
The ultimate validation of a business model is to have customers buy your products. In many cases, you can sell products before you even produce them. I sold a half million dollars of frozen dessert products before I created my new brand. David Cann sold a million dollars of his “Double Robots” before he built them. And the founders of Power Practical raised $1.5 million for their energy generating products on Kickstarter before they built these products. Crowd funding is a fantastic way to test products before you spend a lot of time and money on your business.
In sum, there are always ways to get things done with limited resources. Find a group of mentors who will advise you for free, get to know potential angel investors, start with used equipment, find something to sell to raise funds, and sell your product before you