Business without a Business Loan


Business without a Business Loan


start business

You don't really need outside money, like business loans or venture capital, to start and grow a business. In fact, there are more than half a million (500,000) new businesses that are started each year in every country (each and every year) and I can guarantee you that very few of them obtain or qualify for a business loan or some other form of external capital. 

Given the poor capital markets small businesses face these days with banks not making loans to small businesses let alone startups, over 90% of all startups have to start their businesses without no external financial aid.

So how do they do it?

They find a way. What is the defining characteristic of an entrepreneur: finding a way to make it happen. All businesses are limited in the amount of resources they have to run and grow their businesses. Therefore, to survive and expand, they must make the most of the resources (cash, capital, equipment, property, labor, etc.) that they have.

 Therefore, those companies that manage to get their businesses up and running without business loans do so by finding a way to make what they need happen. For example, a company that does not have the money or staff (limited resources) to start a marketing campaign, but can still attract customers to the business through the use of free resources such as social media, word of mouth marketing, and marketing programs. Reference. Or the new bakery business that can't afford a kitchen or cooking equipment, but grew the business by using other restaurants' stoves and ovens after hours and providing them with a percentage of the income earned in return.

 While getting a business loan or millions in venture capital is sure to make your business life easier, having those resources is not a key element to success. What it is is the ability to find a way, either way, to start and grow your business, regardless of what you have on hand.

3 different ways to begin your business without a business loan

The first thing to understand is that all businesses are unique and therefore all must find their own unique ways to overcome their particular obstacles. Up to that point, we tried to generalize these 3 simple ways to start a new business as a means of not providing a gig roadmap to the success of your individual business, but as a means of demonstrating what can be done and then letting you take. the ball. there and apply it to your own circumstance.

 Lastly, while the following may be instinctive to some, it may also seem impossible to others, know that companies have been using these methods or some variation of them to start their businesses since the beginning of time.

business loan


1: Don't use money.

Most of the time, new business owners will use the capital (money) they have on hand to accomplish tasks, either by hiring labor to do it (be it employees or professional help) or by purchasing a product or service that will complete homework. for them. What this means is that your money is being spent to save the business owner time and effort.

 However, if you don't have money, you just have to do those things yourself. And, for those business tasks you're unsure about, you just have to take the time to learn.

 This is a great example. When Bill Gates first founded Microsoft, he too had limited resources and spent most of his money hiring geeks (software designers, software engineers, etc.). But that left no money for legal or accounting matters. Thus, when he hired someone, he also told them; "Now you have to learn the legal side and handle that for us" in addition to all your other tasks.

It worked? Look at the company now.


Another example could be a retail business that wants to set up a physical store front but doesn't have the money to do so. So the owner takes the business online first and uses a lot of the free resources out there (like eBay, Amazon, WordPress, and even Facebook) to do it, followed by spending a lot of time making everything work.

 Then when the business reaches a certain point where it can pay the rent or lease and all other expenses associated with running a traditional retail business, it can decide if that is the direction the business still wants to go.

 Other ways to do business tasks without spending money (especially if you don't have money) are:

 Note: These are just some of the top expenses small businesses face.

 For Marketing: There are many free ways to market a business these days, all primarily related to social media. If your potential customers are on these free social media sites, you should be too. 

For the workforce: Most startups don't need a full-time workforce as they just can't keep people busy enough all the time. So, look for ways to hire interns, college students, or even people who will work for equity in the company. So you can still get the tasks your business needs done without spending a penny.

 Or hire local or national freelancers who can perform those tasks at a fraction of the cost of hiring a full-time or even part-time employee. Therefore, their minimum cost is directly related to the income they help to generate in the business.

 For Operations / Management: Accounting, inventory management, and sales tend to require very sophisticated software programs to control and manage, don't they? There are many basic open source software programs on the market that can handle almost any management task in your business. And they are all free. The only downside is that they generally don't offer live support, but most have forums where you can get all your questions answered, quickly and in your time. Therefore, these free programs can easily become your front office and back office without a single monetary expense for you.

 It only takes some time to find these free programs and learn how to get the most out of them.


start business without money

2: Work in your business part time.


One of the hardest parts of starting a new business is also having to cover personal expenses during the startup phase.

 It is estimated that it takes 12 to 18 months for a new business to break even, which means that it takes more than a year before the business earns enough revenue to cover only the ongoing expenses of the business, and a lot less have enough earnings. pay the business owner.

 And, if you can't access an outside business loan, this also means that the business owner might have to go those 12 months or more without a paycheck.

 On top of that, add this poor economy and that 12 to 18 months could be extended to more than 2 years before the company reaches that important break-even point or profitability.

 To combat this, many new entrepreneurs keep their day jobs and work at their businesses part-time, nights, and weekends during this startup phase.

 This means that the business must start on a smaller scale and potentially limp until the business can sustain itself.

 However, keep in mind that this is only temporary and the end goal is to eventually transition full-time into business when feasible.

An example of this (and there are many) is the moving company PODS. The PODS founder kept his day job and worked only a few hours each night on his business and business plan. He did this because he was not in a financial position to quit his job, as well as his desire to spend some quality time with his young family as the business began its assent.

 Be that as it may, with some close to home pay, this business proprietor was additionally ready to.

 Take a lot of the stress of a new business off your shoulders when it comes to covering your personal expenses, Provide some money to invest in the business as needed and

Most importantly, it allowed the company to focus on a long-term growth strategy rather than a short-term strategy of earning income now, which would have forced the owner to make poor overall business decisions.

Therefore, by having a full-time or even part-time job alongside the company, new entrepreneurs will have additional time and resources to research and develop their products and services, market the company, and properly grow the business in the long term. term (which is the ultimate objective all things considered).


3) Use your own savings.


Given the unlikely likelihood that most businesses will obtain or qualify for a business loan, even a small business loan guaranteed by the SBA, it means that many business owners have to rely on personal resources to finance their new businesses.

 This can be good in a number of ways. First, the business owner already shows the necessary discipline to make the right decisions for the benefit of the business, as saving money requires a lot of discipline.

 Second, by having the necessary funds, the entrepreneur can more easily focus on starting and growing the business and not worry about debt payments or resistive loan agreements.

 And lastly, starting a business is about securing the financial future of the business owner - almost the same reason people save money. Therefore, using personal resources is basically changing one method of financial security for another. As the business grows, you can offer much more to the future with the owner's resources than your savings.

 The types of personal resources that can be used include:

 -Personal savings accounts,

 -Selling personal assets such as stocks and bonds or other personal property that has monetary value but no longer has personal or nostalgic value.

 -Or, take retirement funds and invest them in the new business.

 Lastly, even if you don't have personal savings or resources now, you can always continue working at your current job or any job while saving those funds. Again, it is only temporary until you have the necessary assets on hand to start your business and realize your true dreams.


start business without a business loan


Having a business loan or some form of outside capital might make it easier for your new business to run at first, until you have to pay back those funds, but having a business loan is not really necessary to start a new business or be successful in business.

There are many ways to avoid having to search for a business loan, some of which we describe here. Just think of the hundreds of thousands of businesses that go live each year around the world, since the beginning of time, and how they were able to find ways to get their businesses up and running, and on a solid path to success. success, all without business loans.

If they can do it, so can you. You just have to be willing to try to find ways, your own unique ways, to make it all happen.

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