Do you dream of starting your own business but suffer from nocapitalitis? Don’t despair. We set you up with these ten steps, complete with tips, advice from the trenches, and free tools for starting your business with nothing.
What you’ll need:
Internet, lots of it
Coffee, in abundance
The big idea
Here are eight ways to come up with one that sticks.
Ask yourself, “What’s next?”.The most successful businesses are the ones ahead of the curve. Look at trends and technologies on the horizon and how you might move in those areas.
Do something about that pet peeve .Some of the world’s most successful businesses started as a one-man operation created out of frustration. You just have to look to yourself and your life to find what frustrates you. There might just be a market in it.
Don’t [re]invent the wheel.Sometimes there are ideas that create entirely new industries. But most of the time you don’t need to invent or reinvent one. Analyse big industry players to find their gaps then figure out if you can fill them. Sometimes the big guys create tremendous opportunity in their wake.
Big fish, new pond.Think about your skills and whether they may be useful in a new area. Do you have technical skills or expert knowledge in one industry that can meet a need in a different one?
Get your innovation on.When coming up with ideas, try to identify markets that haven’t had many recent innovations. Be careful though, there may be no innovation because it’s had its heyday or because it’s a non-starter.
Be like fast food: Fast, cheap, and easy. Many companies have got their big start by offering customers an existing product at a lower price. Be smart though. Consumers are discerning and want quality.
If in doubt, talk.You don’t have a business if you don’t have a market, and successful businesses have ideas that meet people’s needs. And the best way to find out what people’s needs are, is to hang out with them or just ask them what frustrates and interests them.
Don’t be afraid to mix things up.If you’re the evil genius sort, take a cruise down a shopping aisle and see what happens when you combine two products across the aisle from each other. While it will probably spark a whole lot of bad ideas, you may find a brilliant gem in there.
With no market, there’s no business
As the saying goes, if there’s no market, there’s no business. But having a wishy-washy idea of who your market is – like a blanket description of ’women‘ – isn’t going to cut it either.
You need to know everything about your would-be customer, from where they live, the routes they drive, their income, what their interests and needs are, right down to the number of sugars they like in their coffee.
One of the best (and free) ways to get this information is through surveys. Facebook and Twitter are your friend – provided your target market actually uses these social media platforms.
If you have a database of email addresses, online surveys can be useful too, but be sure not to spam, or make them too lengthy and vague.
If social media isn’t your forté, you can try keyword searches on Google, visit competitor links to see their pricelists and offerings, read expert blogs, or go the old-fashioned route and get talking to people on the phone or face-to-face.
Get yours here:
Lets you create surveys free of charge for your own audience. For a little extra, you can also get feedback from your target audience.
To start and run a business you’re going to need a business plan. It gives a clear overview of what you’re going to do and how you’re going to make it happen.
If you’re planning on starting a business for free, it’s more important than ever to figure out where you’re going to incur costs and how long it will take you to start generating cash flow and profit. That way you can implement a cunning plan to get what you need for free.
Some work required
Google ‘free business plan template’ and in 0,18 seconds you get 37,2 million results. Some plans are better than others (and length isn’t the deciding factor either), so make sure you have the following elements thought through:
General company description
The industry and market
Your team and roles (even if it’s just you)
A marketing plan
An operational plan
A financial plan
And an appendix.
Get yours here:
By Entrepreneur US expert Tim Berry gets you started on your business plan.
Now that you’ve got your business idea, you’ve identified your market, and you’ve fleshed out a business plan that documents how much money you’re going to need, you can go about getting that money – preferably for free. Here’s how.
If you’ve had designs on running a business for some time, chances are you’ve been saving for it. While timing can be key in starting a business, keep saving until you have enough capital to keep you going for at least three months to give your business time to start generating cash-flow.
Friends, family and fools
The three f’s for funding, and two out of three love you, which means they’re willing to invest in you and less likely to scrutinise your plan or demand high returns for their investment. The bad news is that if things go pear-shaped it could make things more than a bit awkward. So when seeking money from friends and family, here are some basic rules:
Treat them as if they were strangers. Keep business and personal separate by insisting on legal documents or promissory notes, and don’t offer less than commercial interest rates.
Debt can be better than equity. When someone lends you money, you pay them back with interest and they can’t tell you how to run your company. But when someone buys a share, they are your legal business partner. When in doubt, rather ask for a loan.
Tie repayments to cash flow. Try to avoid obligatory and fixed repayment schedules, instead work on a percentage of operating cash flow.
Consider non-voting share. If family or friends insist on buying, try make it non-voting so they don’t have the right to second-guess your every decision.
Angel investors and venture capital. An angel investor is someone with loads of money and eyes for mentorship interested in helping out the next generation of entrepreneurs in return for a piece of the action (and anywhere from 10% to 50% equity in the company).
Venture capitalists are in it to make a lot of money quickly and firms have different specialties and requirements. They play hardball and want in on high growth companies, which means your idea needs to have momentum – revenue, channel partners, business development deals – and you need in place a management team, market size, and a number: How much money, and what for, right down to stationery.
Both angel investors and venture capitalists like to see an endgame that will allow them to pocket their winnings by having their shares bought out or selling off the company.
Get yours here:
Get in touch with South African angel investors through various angel investor networks.
Crowdfunding is a relatively new way to generate capital for launching your business idea. Instead of approaching an investor for a lump sum, crowdfunding is about persuading individuals to each give you a small donation. With enough donors, you have some serious start-up capital. Special rewards are offered in return for donations, ranging from names appearing in menu items, behind-the-scene tours, early releases, small return on investment or royalty.
The best part is that by pitching your business idea to the masses, you also create a base of customers who feel as though they have a stake in the business’s success. The downside is that without an engaging story to tell, your attempt might flop.
Get yours here:
Crowdfunding platforms have sprung up both locally and internationally, here are the most popular sites:
These are a godsend if you qualify, meaning your business needs to have a positive impact on the local economy, create jobs and meet the requirements of B-BBEEE. You also need to be prepared to jump through a lot of paperwork hoops and wait a very, very long time.
Get yours here:
The Department of Trade and Industry has dozens of grants, funding and incentive programmes available across a range of sectors.
A small network of enthusiastic believers to get the ball rolling (See family, friends and fools).
Think up other perks in return for money (remember, donors often want bragging rights to share at the pub).
Offer a serious business plan that explains what the money will achieve.
Show you’ve got some of your own skin in the game.
Include media like videos and pictures, links to active social media sites and regular updates until the project is complete.
Getting free office space
Office costs can be a major hurdle for entrepreneurs with tiny budgets, but the first question you need to ask yourself is: Do you really, really need an office, or is it for show?
There are a number of spaces that can serve as offices, and the first can be your home, lounge, bedroom, garage, local library, café, someone else’s office or even collaborative office space.
If working from personal spaces, offer to visit clients instead of them coming to you (they’ll consider it value add) or spend a little bit of money getting your working space looking professional.
If a home-based business won’t work for you, try co-working spaces by looking for solopreneurs to sub-let excess office space to. If you’re able to offer another business a barter, you could well get your office space super-cheap in exchange for services offered.
Collaborative spaces are also on the rise as more and more solopreneurs need ad hoc office space for conferences, presentations and resources. In these spaces resources and furniture are provided on a pay-per-use rental or membership basis.
Get yours here:
Is a collaborative work space in Joburg’s Maboneng Precinct that you can rent on a membership basis.
Remember, you are your best employee. To keep things small and cost-free in the beginning, see how long you can get by with just yourself.
Then it’s time to ask the same people you asked for money to get involved: Family, friends and fools. If they don’t have the specialist knowledge and skills you’re looking for, lure in talent by offering equity or profit share.
If you’re not looking for a full-time employee (expensive), consider using freelancers for ad hoc projects.
Get yours here:
Freelancers can be found all over the place. But good places to start are:
It’s pretty much free (if you don’t count your bandwidth)
There are dozens of open source and freeware applications out there to help you run your business, some are even designed for operating from a tablet. Whether its project management, communication, creating documents, or specialist programmes, Google is your friend.
Get yours here:
Allows you to create everything you could possibly need from anywhere that has an Internet connection. From spread sheets to word documents to presentations, Google Docs has it covered for a couple of dollars a month. If you’re into completely free software, try Open Office.
Can be your perfect free solution if you need to video or phone call one location at a time. If you need some extra bells and whistles though, like video conferencing, you can pick up the tab of a few dollars a month.
Unless you have a financial or HR background this can be particularly daunting. But having a clear picture of the financial status of your business at all times is essential.
Fortunately there are various products available to help you out. Be careful though: Some can start free and then quickly become expensive.
Get yours here:
Is offered to FNB clients free of charge. It collates electronic bank statements to generate financial statements. It also allows you to prepare income statements, balance sheets, cash flow statements, and provides debtors, creditors, budgeting and Vat functionality.
If you’re not able to keep things to a one-man-band, online payroll can be your answer. Sage Pastel Payroll software offers start-ups more cost-effective solutions depending on the number of employees you have on your books.
Cost: R17 per employee for My Pastel Online (aimed at start-ups)
People management for SMEs is available from PeoplePlus. It is available 24/7 and offers data back-ups, legislative updates, HR resource information, leave management, disciplinary and training management modules, a recruitment portal, a document manager and payroll module.
Probably the most important thing you’ll need after a business plan
Today’s consumer is a few steps ahead of you in the sales process and it’s all thanks to the Internet. So if you don’t have a good website, you’re seriously hamstringing your business’s chance of survival.
At the end of the day, if you’re not online, you don’t exist. But here’s the great news: You don’t need to be a tech boff, spend loads of money or do anything complicated to have a hot website.
Here’s what a good website needs:
A domain name that’s easy to spell and correlates to your business’s name.
A front end that’s HTML or Flash (that’s amateurish basic text or more sophisticated functionality).
Highlight your brand. Make sure you convey what your brand stands for. Be sure to have relevant and useful content, information about the company, news, pricing, promotions, review and testimonials, everything a potential customer would want to know before they decide to purchase.
Spell out what your product or service does and why it’s relevant to the consumer.
Showcase your brand leaders – it helps personalise the brand.
A space to let happy customers grow.
Keep it clean! Go easy on flashing, spinning, garish colours, poor quality pictures, and anything that could be annoying.
Make sure it’s easy to navigate.
Choose smart keywords and get working on SEO so you pop up first in Google searches.
Start a newsletter that visitors to your site can subscribe to.
Get a blog going that’s linked to your website. People want information. Give it to them.
Linking your site to social networks is great for Google ranking, so at the very least, get a Facebook page.
Generate interest with news about upcoming promotions or new products and services.
If you’re an e-tailer, streamline your payment service to be as quick and painless as possible.
Contact information. Make it easy for potential customers to get hold of you for more information and quotes.
Get yours here:
To see if your domain name is available, spend time looking up names and variations.
The impression your business makes on potential customers is critical. It has to speak to your target market, convey the right kind of message and convey legitimacy and credibility. But it needn’t cost you a fortune. Here’s how to get branded:
Lets you design your logo for free with a user-friendly interface. You can choose from thousands of icons too if you don’t fancy yourself a designer.
Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.