If you think the only thing keeping you from entrepreneurial greatness is a killer VC pitch and a few million dollars in seed funding, we've got good news and bad news for you: No money is no excuse. All you really need are great ideas, tons of drive, and deep faith in yourself.
Just ask these entrepreneurs, who founded now-thriving companies with little more than the inspiration they found in dorm rooms, birthday parties, or relatives' kitchens. Whether selling handmade clothing, developing apps, or helping rescue animals, they show it's possible and maybe even preferable to realize any business dream on a shoestring. --By Leigh Buchanan and Paul Keegan.
Looking to launch? Do show off your work--and follow these other tips to start up cheaply
- Do give away samples. When Ginny Simon was launching the organic foods company Ginnybakes, she gave out cookies and snack bars wherever she went, from her yoga studio to her hair salon. Proprietors began carrying the products and talking them up, creating early demand.
- Do outsource. As they were launching Caskers, a spirits retail website, Steven Abt and Moiz Ali hired freelance artists in Europe to help make their logo; developers in India helped build the website. Online portals including Rent A Coder, Elance, and oDesk let you solicit bids from hundreds of programmers, giving you ratings for the bidders and a feel for the market.
- Do be creative. Thad Tarkington and Kevin Barry of FilterEasy, which delivers air filters for home heating and cooling systems, used their filters to build a booth for their first big trade show. They were shocked to win a booth-design prize, which gave them much-needed visibility in their industry.
- Do ask for an advance. Can't afford the help you need? If you're a business-to-business company, try asking your clients for a percentage of your fee up front to meet payroll or hire contractors. "I hired my developer and now co-founder Doug Churchill by finding a small software project and asking for a 20 percent deposit," says Jim Belosic, CEO of ShortStack, a digital marketing firm.
Don't buy before you try and other "don'ts" of saving money.
- Don't overspend on the perfect domain name. The concept and focus of your company may change during the turbulent startup phase, so settle for a good-enough domain name now and hold off on that ideal, expensive name until your business plan solidifies and you can really afford it.
- Don't buy software until you really need it. Even at $50 to $100 a pop, software can add up quickly. Fortunately, most programs come with free trials. Queue up your work so you can finish the projects before the test period expires. Take the plunge only once you've vetted the software and know you'll regularly use it.
- Don't hire a lawyer before you really need one. Paying upfront legal expenses is a definite "do" for some entrepreneurs. But Justin Nassiri, founder of the internet marketing firm StoryBox, argues that you should turn first to online legal services like LegalZoom.com, which can handle incorporation and other simple tasks for a fraction of the cost of a real lawyer. When you do need more complex legal advice, vet several candidates; most lawyers will meet with you for an hour at no cost.
- Don't scrimp on important stuff. Holly Bartman of Superfly Kids thought she'd save money by using home sewing machines to make her superhero capes, but the motors died in less than a year. Industrial machines cost more, but they last longer and are much faster, increasing productivity. "Buying on the cheap can cost you more in the long run," she says.