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​Financing: Starting without money​

Starting a business will always cost you money, but there are ways of doing it that could prevent you from having to come up with a lump sum. The trick here is to start off very slowly, developing your ideas and your products in your spare time, doing your own research, selling a few products to test the market, getting feedback from customers, etc.
Here are some tips:
  • Don't quit your day job: If you are fortunate enough to be employed, use your current income to experiment with your business idea. Work on your products at the weekend, and talk to people who already are in the industry you plan to enter. Talk to prospective customers about what they think of your idea, and give them samples to look at or try out. Also talk to the suppliers of the equipment and materials you will need. This will pave the way for you to make some sales of your product, so that you can be sure that there is a market. It will also hopefully give you some cash to start putting aside.
  • Work out (and use!) a business plan: Taking a slower approach to starting your business will give you the time to think through all the hurdles and challenges that can and do arise. A business plan is a useful tool to help you through this thinking process. Start working on a business plan as soon as your ideas begin to come together, then develop and modify your plan as your ideas develop and change. (Remember: a business plan is never cast in stone. It is there to ensure that you know what you're aiming at, and that you've thought about how you'll get there. The plan, it is said, never survives the first battle! So you need to keep updating it.)
  • Build up sales before you launch: Ideally, get a few regular customers before you go into the business full-time. Try out some inexpensive marketing techniques. You may even consider employing someone on a temporary, part-time basis to build on the success of your first few sales and to build up a customer base. This will take the pressure off you when you launch the business officially, and give the business a bit of time to 'warm up' before you try to draw a salary from it.
  • Get some suppliers on your side: One of the cheapest forms of 'credit' can be your suppliers. While you should never drag your heels when it comes to paying your debts, you might be able to find some material suppliers who will agree to give you a few months to pay while you are starting up. This could benefit your business enormously, as you could get supplies without having to go to a lender for the money; and from the suppliers' point of view, you could become a good customer for them.
  • Phase your business into operation gradually: Depending on the type of business you plan to start, it may be possible to get it going gradually, reducing the amount of money you need to put in initially. There may be certain products that will sell better than others, with less infrastructure or with less capital outlay. Start with these, and get the cash flowing. Be strict about putting a portion of this cash aside to fund your expansion into other products.
  • Get as much paperwork out of the way as possible: Attend to all the regulatory requirements (such as trading licences) early, so that it doesn't waste your valuable selling time once your business is launched. Register your company or CC, get your tax requirements sorted out, register for VAT if necessary, find out what insurance you will need, open your business bank account, etc.
  • Get your systems in place early: Don't launch before you have a proper record-keeping system, invoicing system, book-keeping system, customer care system, etc. These will form the foundation of your office administration, and will keep your business running on oiled wheels. Get this organised early, as you will be working flat out when you launch to visit possible customers, to present your product, and to produce what the orders require.