Every year my team and I talk to hundreds of thousands of business owners in all stages of business, many of whom are just beginning their entrepreneurial journey. And one of the things that we hear time and time again, is the myth that "it takes a lot of money to launch a new business."
This is one of the most common and damaging misconceptions in the business world, and one that in most cases, simply isn't accurate.
First, the facts.
According to studies, most new businesses are launched with less than $10,000 of startup capital. One study from Wells Fargo conducted by the Gallup Organization found that 73 percent of new businesses were launched with no outside funding of any kind and that the average business startup used less than $10,000 of launch capital. While most new business owners wish they had more money at the start, by keeping their expenses to a minimum and being creative they are able to launch their companies on a small amount of money--making launching a new business accessible to almost anyone. Of course, some businesses do require large capital outlays (usually for expensive equipment, extensive facilities, development costs, or required staffing), so these new business owners must raise outside funding, but the majority can get by with much less than expected.
But what if I do need more funding?
But David, that sounds great but my industry/business is going to need more than that to get up and running!
If you require outside funding, you can bootstrap, i.e., fund out of your sales, raise private capital (from family, friends, angel investors, or venture capital sources), borrow through Small Business Administration loan programs, crowdsource your funding, or create a joint venture to launch your business without a lot of personal capital. There are dozens of avenues you can take to get the funding you need to make your dream a reality.
Thank you, technology.
The myth that starting a business is expensive isn't entirely without basis. A hundred years ago, it was expensive to start up a business and it did take quite a bit of capital. But technology has changed the playing field, giving the newcomer easier and less expensive access to the great game of business than at any other time in history. And the trend is accelerating. Never before has it been easier and less expensive.
Don't let the lack of funding stop you from launching your dream business. You can and will find a way to access the capital you need. And for about 80 percent of you, that number is much less than you originally thought. If the idea is a good one, and your team is strong enough anything is possible.
Remember, in life you can either buy your excuses or buy your dreams--but you can't buy both.