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Most people who want to start their own business don’t have a ton of money laying around and it’s probably one the most common questions I get emailed about: How can I get started without a lot of cash?
Well I’ve put together a list below of the best ideas I’ve heard and personally used. I hope you find it useful!
The three basic strategies to starting a business without much money are:
Delay the normal “business starting” activities like incorporating, hiring, renting office or retail space, etc until AFTER your business has started earning money. This is known as bootstrapping.
Doing everything yourself and spending your personal time instead of hiring an expert. (Takes longer but costs less.)
Using some neat tricks and little known deals below.
Start With The Easy Stuff: Eliminate Expenses
Don’t rent an office! – work from home. Or better yet work from the best free office with locations everywhere: Starbucks. If you need to meet with a client and are worried about seeming small time without an office, don’t be. Just meet them at a restaurant for a lunch meeting. This is what people with the nicest offices do anyway.
Don’t hire any employees! – do it all yourself until you have some $ coming in the door.
Don’t hire lawyers, technical people, graphic designers, or assistants (see below)
Legal Stuff and Incorporating
Get a free lawyer and legal advice from the mentors at Score.org
Find a website with a similar legal document and modify it to your needs
An LLC is probably the best business structure, but don’t worry about incorporating until you’re earning money, just do a sole proprietorship, you can always incorporate later (you can get it setup with the IRS in just a few minutes by calling them at 800-829-4933)
Learn how to do your own financial statements for your business in Excel instead of hiring a CPA or bookkeeper (again you can do this after you’re making money)
Take a Quickbooks class at your local community college
Make a website for your business
Don’t pay a premium for a top end domain name, there are plenty of good ones left
Test out your ideas by writing to a blog, you’ll get feedback on what people like and don’t like
Get a free business website at www.wordpress.com or tumblr.com. It won’t be your own domain (it will be something like yourbusiness.wordpress.com) but…
When you’re ready to have your own domain, register it at domain.com and add this as a custom domain to your WordPress or Tumblr site.
Get a professional website design for free with a wordpress theme that you can install with a few clicks (no programming knowledge needed)
Getting a Logo
Don’t hire a fancy graphic designer. At least not yet. Use LogoYes to create your own logo (or at least get ideas that you can recreate on your own for free)
Accepting Credit Cards
Don’t bother with a full merchant account to start off with, they are complicated, come with monthly feeds, and require programming expertise. Instead try a simpler (and much cheaper) solution like Google Checkout or Paypal
For a more professional look and a complete shopping cart for only $5/month use E-Junkie, its great and I use it on this site
If you have lots of physical products, try a Yahoo Store
Starting a service business where you consult, coach, teach, etc
Create several pages on your wordpress site: one for your experience, testimonials, rates, availability, etc
Pick a domain name with your #1 keyword in it! (Assuming it isn’t a very competitive keyword you’ll rank on the first page of google within a month or two for that keyword which means customers!) here’s some more info and an example
Creating Info Products
Use an ebook template like these from Eben Pagan
For print books, self publish it at www.lulu.com and use print on demand (they don’t print a single book until someone buys it which means you have zero up front cost for inventory!)
Use a $20 webcam or digital camera to create educational video products
Use camtasia ( $200 for PC) or iShowU ($20 for Mac) to record your screen and make great videos like this one. Or record powerpoints and do the voiceover to make great educational products. Update: even cheaper use ScreenToaster.
Use a mac to edit your videos (iMovie is free) and you can even produce DVD’s
Before investing in a retail location…
Go to a local fair or festival and rent a booth to see if anyone buys your product. Talk to potential customers and get feedback.
Try selling it on ebay
Always be learning about business
Go to a meetup.com groups in your city related to business/entrepreneurship
Read all the best business books by getting them from the library
Get 3 of the top 10 books on building wealth for free in PDF
Make friends with other entrepreneurs and share material
Install the stumble upon toolbar and choose business/entrepreneurship as one of your interests to find all the best videos and talks out there (this is literally like going to a free semester of business school, you get to see all the best speakers and thinkers of our time, and those of the past)
Read blogs like this one in google reader
Marketing, free website traffic, and getting your first customer
Get 250 full-color business cards for free to hand out to people you meet
Post an offer on craigslist
Post videos on youtube with links to your website
Post the same video to all video sharing sites (Google Video, Yahoo Video, MySpace, Revver, etc) at once with TubeMogul (this is some of the best free marketing you can do)
Generate leads by offering an incentive on your website for people to give you their contact info (some incentives that work well: Top 10 reports like the top 10 myths about…the top 10 thing you should know before…etc, videos, audio interviews, one page cheat sheets, free ebooks)
Write a good article and send it to more popular websites (include your byline at the bottom). This is also known as doing guest posts and is the #1 thing I used to grow this blog when it first started out.
Learn how to use google adwords and spend $10 and see if it brings in at least $10 (if so keep going!)
If you can’t afford to get links from expensive directories like Yahoo ($299) use Directory Submitter to get links from hundreds of smaller directories for free
Pick a good domain name with your keywords in the domain (use hyphens if necessary). This will help you rank in Google for that keyword and get visitors to your website.
Do some basic on page SEO
Research what keywords will bring you the most traffic (and are least competitive) with keyword discovery, Wordtracker’s Free Service, and (probably the best option) WordTrackers free trial of their full service (just have to remember to cancel within 7 days to not get charged!)
See which keywords are likely to bring buyers (instead of tire kickers)
Get more incoming links to your site by creating a Squidoo page (these rank very high in the search engines for some reason!)
Send an email to everyone in your email program’s contact list with a short friendly note letting them know you are starting a business and ask if they could forward it to just one or two people who might be interested. Offer something free for the first 10 people. This has an exponential effect because it not only reaches who you know, but everyone who knows who you know (an order of magnitude bigger group of people.)Here’s the top eight list of suspicious behaviors:
A change in the voice’s pitch.
A change in the rate of speech.
A sudden increase in the number of “ums” and “ahs.”
A change in eye contact. Normally, one makes eye contact one-quarter to one-half of the time. If suddenly, at the convenient moment to lie, he’s staring at you or looking away, beware.
Turning his body away from you, even if just slightly.
Suddenly being able to see the white on the top and bottom of a person’s eyes, not just the sides.
A hand reaching, even if momentarily, to cover part of the face, especially the mouth.
Nervous movement of feet or legs.
Of course, in order to notice a change, you need a baseline. So you must first watch the person when talking about innocuous issues.
Five Elements of Strategic Intelligence
According to Maccoby, visionary leaders succeed because they have mastered five elements of strategic intelligence:
Any coherent view of strategy involves thinking about the future. Leaders anticipate how current movements, ideas and forces will play out in the short and long terms. They can identify evolving products, services, technology systems, global gaps, competitors, and customer needs and values.
Foresight is more complex than extrapolating today’s market into the future. The dot-com bust between 1995 and 2000 is a perfect example of the difference between foresight and extrapolation. Aspiring entrepreneurs came up with ways to make it big on the Internet. They asked, “How do I capitalize on what already exists?”
Foresight would have required them to ask, “How do we capitalize on what doesn’t exist now but will in the future?” It’s not about linear thinking. Leaders must connect the dots among many interdependent forces and determine how they will coalesce. Foresight requires systems thinking.
Visionary leaders understand how disparate parts influence the whole. They synthesize and integrate various elements to build and maintain healthy systems.
Those who want to lead companies in new directions must have competency in systems thinking, as well as the other interdependent elements of strategic intelligence.
Foresight and systems thinking are pure intelligence skills. The other components of strategic intelligence – visioning, motivating and partnering – are real-world skills, sometimes referred to as “street smarts.” Unforeseen events, people’s quirks and qualities, messy interactions with other companies and a volatile economic climate make business success a complex affair.
Visioning combines foresight and systems thinking into a realistic view of business goals. In some companies (IBM, GE), visionary leaders have had the foresight to shift from selling products to selling solutions in a knowledge/service economy.
A focus on learning ensures that visioning evolves with the times. Yet, even the clearest vision can fail if a leader lacks the skills to motivate.
Motivating is the most misunderstood and elusive element of strategic intelligence. It’s one thing to talk up a storm about how a corporate initiative designed to improve sales and profits will help you crush the competition. It’s quite another to grasp the importance of “soft” skills like influencing others to act as you see fit.
Motivating is difficult because it involves the messy work of igniting people’s passions so they’ll carry out your vision. A business model that neglects human motivations won’t get the buy-in needed to make your vision a reality.
Consider appealing to the four “Rs”:
You must reward positive behaviors to further your vision. By building genuine relationships, you convince people to take ownership of the responsibilities you’ve entrusted to them.
Many leaders motivate only their immediate teams, often ignoring front-line workers and lower-level employees. A CEO with strategic intelligence recognizes the need to motivate the entire hierarchy.
Partnering is the ability to forge key strategic alliances. It’s different than making friends; a leader with strategic intelligence makes allies. You need to understand how each alliance fits into your corporate vision.
Partnering is the opposite of acquiring companies to bolster overall financial holdings. Leaders who operate in this fashion are merely “serial acquirers.” You must learn how to partner internally (with advisers who complement your personality) and externally (with companies that add value rather than size). This requires an understanding of how companies work together to motivate a social system that achieves one’s vision.
There is no established measurement tool for strategic intelligence. In Narcissistic Leaders, Maccoby offers several questions that can help you self-assess your abilities.
The real test of a leader’s strategic intelligence is in the workplace:
Foresight: How well do you stay abreast of marketplace trends? Do you excel at imagining new products, services and paradigms for the future?
Systems Thinking: Do you think in terms of systems, synthesizing and integrating feedback and hard-to-imagine possibilities?
Visioning: How well can you take an idea and translate it into a workable vision with measurable goals?
Motivating: Do you inspire others to buy into your vision and execute your ideas?
Partnering: How well do you forge strategic alliances, both internally and externally? Do you recognize that alliances are two-way streets and encourage collaboration?
There is a strong need for bold, visionary, productive narcissists who can lead companies through 21st-century periods of uncertainty and transition. The best way to avoid leadership derailment is to steer narcissistic leaders onto stabilizing paths by developing their strategic intelligence.
Maccoby makes a strong case against obsessive, by-the-numbers personality types as leaders because their conservative approach to running companies doesn’t allow for sufficient risk-taking or innovation. Much depends, however, on the specific business environment.
If you’ve ever wondered how someone like Steve Jobs could succeed, in spite of his lack of emotional intelligence, the answer may lie in his strengths as a productive narcissist, coupled with his strategic intelligence. The same can be said for many stellar leaders over the last 20 years: Jack Welch, Bill Gates, Andy Grove, Larry Ellison, Richard Branson and Herb Kelleher. Each is a strong personality with narcissistic tendencies of the productive kind.
Given the huge social and economic stakes, there’s a critical need to understand leadership personalities, including the value of the narcissistic leader.
The Board Chair runs the Board Of Directors. He or she is a Board member with the same roles and responsibilities as the other Board members. But in addition, the Board Chair is responsible for making sure the Board is doing its job. The Board Chair should make sure the Board is meeting on a regular basis, the Board Chair should make sure the CEO is getting what he or she needs out of the Board, and the Board Chair should make sure that all Board members are contributing and participating. When there are debates and disagreements, the Board Chair should make sure all opposing points of view are heard and then the Board Chair should push for some resolution.
The Board Chair should be on the nominating committee and should probably run that committee. I do not believe the Board Chair needs to be on the audit and compensation committees, but if they have specific experience that would add value to those committees, it is fine to have them on them. Either way, the Board Chair needs to be on top of the issues that are being dealt with in the committtees and making sure they are operating well.
Small boards (three or less) don’t really need Board Chairs. In many cases the founding CEO will also carry the Chairman title, but in a small Board, it is meaningless. Once the Board size reaches five, the Board Chair role starts to take on some value. At seven and beyond, I believe it is critical to have a Board Chair.
It is common for the founder/CEO to also be the Board Chair. I am not a fan of this. I think the Chair should be an independent director who takes on the role of helping the CEO manage the Board. The CEO runs the business, but it is not ideal for the CEO to also have to run the Board. A Chair who can work closely with the CEO and help them stay in sync with the Board and get value out of a Board is really valuable and CEOs should be eager to have a strong person in that role.
When a founder/CEO decides to transition out of the day to day management but wants to stay closely involved in the business, the Board Chair is an ideal role for them, assuming that they were responsible for recruiting or grooming the new CEO. If the founder is hostile to the new CEO, then this is a horrible idea.
When Boards get really large, like non-profit boards, the Board Chair is even more important. I’ve been on a few non-profit Boards over the years. I don’t really enjoy working in the non-profit world, but I do it from time to time. I have had the opportunity to watch a couple amazing Board Chairs at work and I’ve learned a ton from them. The partnership between Charles Best and Board Chair Peter Bloom at Donors Choose is a thing of beauty. Same with the partnership between John Sexton and Board Chair Marty Lipton at NYU. For profit CEOs and Board Chairs could learn a lot from watching these masters at work.
When it works, the Board Chair role is hugely impactful. It allows the CEO to spend their time and attention running the business and not worrying about the Board. The Chair will manage the Board and when the CEO has issues with the Board, the Chair will be clear, crisp, and quick with that feedback and will help the CEO address those issues.
Many CEOs find working with a large group of people who have oversight over their work and performance challenging. It makes sense. Who has ever worked for six or more people at the same time. How do you know where you stand with all of them? How do you know what they want you to do? How do you know what is on their minds? The Board Chair’s job is to give the CEO a single person to focus on in dealing with these issues.
The Board Chair job is hard, particularly when the company is in crisis, but it is also extremely gratifying. It is an ideal job for entrepreneurs and CEOs to take on when they are done starting and running companies and want to move into something a little less demanding. I’m always on the lookout for people who can take on this role in our portfolio companies. The good ones are few and far between and worth their weight in gold.