I would appreciate your advice. I have been working as a project manager for a long time at different companies and now my company is making me redundant. Although I have worked hard and achieved a lot of successful results, they didn’t consider my request to continue working with them. I am now in my late forties and I am thinking of starting my own business instead of looking for a job but fearful that it will not give me the stability that I need.
I am the mother of two teenage daughters and I think about their future. That’s why I am considering starting my own business as the better solution. Through the years I have developed a lot of skills and contacts but the only problem is that I haven’t saved money and I don’t have enough to invest in a business. I have seen you saying that if you have a good business idea, that is all you need to start. I think I have a great business idea but don’t feel confident because of the lack of funds. Do you think that I can start a business without money and still be successful?
At the very beginning of my career, I was like you in that I had no money to start a business. I was just a 22-year-old kid with no experience, no know-how, no network or mentor. With only $400 to my name and what turned out a rather unique perspective on potential opportunities, I started a successful business that evolved into what is now a multi-million-dollar operation.
The difference is, however, that you are older and wiser than I was when I started out, and even though you may not have accumulated any savings, you have surely gained life experience and know-how, and you probably have a network, which means you are much closer to success than I was at twenty two.
For me, going forward with my business idea, despite a lack of cash, was an easy decision. I risked everything I had. If I failed, I would be the only one affected, as I was young and single. But as a mother with the responsibility for two daughters, you would be risking not just your own livelihood but your family’s as well. This makes for a difficult decision. This decision is actually more difficult than finding money for your business.
Concentrate on business ideas that will work by using the idle capacity of your network members.
Starting a business without money has become one of my areas of particular expertise. It’s not as hard as you might think. Instead of focusing on a business idea without a specific context or a business focused only on what you particularly want, you might do well to analyse the businesses of people in your network to identify particular gaps or needs and come up with some potential solutions to developing their businesses by using your idea and the idle capacity of their businesses. See if you can match any of their needs with your own idea. Concentrate on business ideas that will work by using the idle capacity of your network members.
To help explain the concept of converting idle capacity to cash, let me give you an example from my own experience. As a student, I was aware that the classrooms at my university were generally unused at the weekends, so I made a proposal to the university’s Faculty of Education to use x-number of classrooms for English courses on Saturdays and Sundays, and for the use of the facilities, I offered the Faculty a percentage of the profits I would make. This afforded me the advantage of not having to spend money for renting a suitable place or buying classroom furniture and equipment; and it was a source of additional income for the Faculty of Education: a win-win situation.
Using idle capacity is applicable to most businesses — you just need to look around in your own environment with a keen eye for identifying opportunities. That is, to implement this technique successfully, you have to learn to ‘see’ as opposed to simply ‘looking’. Looking at a door and seeing that door are two different events. Everybody can look at a door, but not everyone can see the opportunities it may lead to.
One key question is how you can use your network to create and set up your business without a significant amount of cash. Envision yourself as the business development manager for a businesses in your network — businesses of family members, friends, acquaintances. Develop new ideas that will bring your network’s idle capacity into the equation.
Get a pen right now and write down the names of businesses and people you have ‘accumulated’ so far in your career.
Then start thinking about new businesses activities for these people and businesses, in your assumed position as their business development manager.
Prepare a business model that will show how this business activity is going to produce cash by using their idle capacity. When you present this proposal, ask for 50% of the profits.
With these 4 steps you will have become your own business angel, and you will gain the benefit of having access to not only the idle capacity they provide but also to the network of the company, and to the know-how of the people you will work with. Once you have generated some cash by using the idle capacity of a business in your network, the rest should flow easily!
This formula is valid only if you have a good network. Let’s say, however, that you don’t have a network to rely on. What should you do?
In that case, you will need to find a business angel who will provide finance, access to a network, mentorship and know-how to get you started on your great business idea. In order to reach out to business angels, visit acceleration centres, incubation centres, and business angel networks. They will be able to connect you with the right business angels.
Applying for business angel support requires thorough preparation. Develop a well thought-out presentation of your business idea for the business angel networks and incubation and acceleration centres. Incubation centres can help you produce a demo for your presentation.
In summary, you don’t necessarily need money to succeed, but you do need great ideas that work for a business in your network. By using the idle capacity of existing businesses or institutions, it is impossible to lose money because you are not investing any — which means you are not risking yours and your daughters’ livelihood. You risk only the time you spend in preparation!
Even if you do not succeed in your venture, you are expanding your know-how and network, which means you are acquiring important assets for your future. While you may not generate profits, you still gain much useful knowledge and earn valuable experience.
I wish you all the best.