5 Ways to Start a Business Without Investors
One of the biggest barriers to starting a small business is not having enough money in the bank to pay for what you need. And who's going to lend you money, right?
But if you apply a little creativity to the problem, you'll see that you don't need investors or small business loans to get your business started.
Make money from what you're already doingMaybe you paint. You already have canvases and paints, right? Maybe you write fiction. Got a pen and paper or a laptop? Of course you do. Perhaps you design clothing. I bet you have a sewing machine and a spare room full of fabric. Make jewelry? Sculpt tree trunks? Your supplies are already around you. Get into the habit of thinking about your hobby as a business and everything around you as resources.
Internationally renowned historical costumer, Mathew Gnagy of The Modern Maker, recently told me his story: “I was suddenly out of work after 9-11 and needed to think fast to earn an income. So I immediately began to use every piece of fabric that I had in my possession to create costumes to sell at the local medieval organization's weekly meeting that allowed vendors. It started small. Maybe 100-200 bucks per week. I very pointedly began to talk about my business in a quiet way. Building interest. It became $500 per week. I began to look for events at which I could sell products. It sort of blew up after selling at my first large scale event. That one brought in thousands of dollars that enabled me to buy more fabric and perpetuate the business. It grew and grew until my small home-based business was selling over $100,000 per year of product and at only 6 large events per year. At the time, it was like a miracle to me.”
What can you make to sell? What have you already made that might sell? Network with other people who enjoy your work. Talk your stuff up on forums and blogs. Websites like Etsy.com are wonderful for this kind of thing.
Have a large customer foot the billSometimes you can seek out or create opportunities for other people to buy your products before they're even produced. This is basically what happens in the publishing industry. If you're a famous author, your publisher agrees to publish your book – edit it, print it, commission the cover art, distribute it to bookstores, advertise it widely, and cut you a big advance check – before they've read the finished manuscript. This is, of course, based on your reputation as a best-selling author and the money the publisher expects to make from your next book. But the rule applies to anything you produce if you have established a reputation for quality.
This technique isn't limited to the publishing industry. When I started Reconstructing History Patterns, I was intimidated by the huge expense of getting the first group of patterns professionally printed. A costume shop owner I knew had been encouraging me for years to start producing patterns. When I told her I was ready to take her advice, she placed an order before I even had product to sell. I based her price for the order on what it was going to cost to have the patterns printed plus some extra so I could plan for the next print run. When I got the bill from the printers 30 days later, I had her check with which to pay them. As I printed more and more, my printing costs went down and my profit margin increased. And I hadn't spent a dime of my own money.
Package somethingHave you written a bunch of stories but haven't submitted them to an anthology? Package them as a download from your site. Do you know how to do something that you can demonstrate in a YouTube video or with screen shots on your site? Set it up and ask for a modest fee from your page visitors. This works very well if it's something you receive questions about often. “How do I do this thing you're always talking about?” “Go here and there's a link to my new tutorial!”
The Art of Non-Conformity's Chris Gillebeau recalls his early days blogging and how his readers led him to create a product that they wanted to buy: “I wrote about traveling the world without clearly explaining how I did it and what it cost. After I answered about 50 individual emails that all asked the same questions, I realized I should provide more comprehensive solutions. I started by writing a short report on finding Discount Airfare.” After some small success with that report, Chris went on to write The Unconventional Guide to Working for Yourself, again based on reader questions and requests. This sold more than his first effort. Now he has a whole website of helpful ebooks and courses called UnconventionalGuides.com
Remember, what you do is valuable. If people ask you for the things you do, it's not ripping them off to put a price on those things.
Sell someone else's stuff that you've usedNothing is a better endorsement than the recommendation of someone your audience trusts. Pat Flynn of Smart Passive Income makes over $20,000 a month just by recommending products he believes in. This technique is called Affiliate Marketing. Many websites from big retailers like Amazon.com to small niche sites offer affiliate programs that you can join for free and promote the products you use and enjoy. Pat has a great article on the subject here.
Before I sold patterns, people would often ask me where I learned what I knew about historical costume. So I put up a Recommended Reading page on my website and filled it with Amazon affiliate links. I wrote a paragraph for each link explaining the value of each book as a resource. And people bought them.
It is crucially important that you recommend only items you have used and that you believe work well. If you just put up a page recommending a bunch of things, it will come off very insincere and probably get you no sales.
Build an audience and pre-sellDo you have a presence on Twitter or Facebook with lots of followers? Are you well known in your community for doing what you do? Do you have a reputation for great work and expertise in your subject area? Whether you're selling online or in person at your local market, there is nothing more important to a small business than its audience. You quite literally cannot sell anything without them. J.K. Rowling's Harry Potter novels gained fame through the word of mouth of her passionate readership, not because her publishing company threw a lot of money into promoting her work (that happened later).
Historical shoestore American Duchess started their business after hearing of the frustration of historical costumers like them who couldn't find 18th century shoes fit for a lady. With no background in shoemaking, founders Lauren and Chris designed an 18th century ladies' shoe and showed the sketches to their loyal blog followers. Their audience loved it, so they took pre-orders to fund the first production run. Now, a short three years later, American Duchess is the go-to source for high-quality historical footwear.
If you already have fans or followers of your work, chances are they'd be thrilled to buy something from you. The most important thing is to keep what you're selling relevant to the business you're trying to build. I mean, you could sell sweaters for cats while you work on your best-selling sci-fi trilogy. But it would be better to sell pieces of your writing so you can build an audience interested in what you plan to do.
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