Building a business costs money, and unfortunately, as the old saying goes, money does not grow on trees.
I started my mobile gym franchise, GYMGUYZ, 7 years ago with little capital myself. In the process, I learned that it is possible to pursue business ownership with around $15,000. To go big places, you will always need more money, but you can start out with very little as long as you take care of some careful planning and are passionate about your company.
- Have a Plan
From the very beginning, put everything down on paper. If you do not have a plan, you do not have a business. More importantly, a financial model allows you to understand what kind of budget you are working with, where the funds are going and what is required to grow. In order to design a plan, think about key questions such as:
-How will I differentiate myself from competitors?
-How much will it cost to provide my product or service?
-How much will I charge?
-Where can I cut costs so I can still run at an optimal level?
- Stay Focused
Some new entrepreneurs are all over the place. Starting a business takes passion, self-confidence and fortitude. Start thinking like a businessman. You will experience setbacks and times of frustration, especially in the early stages of lifting your idea off the ground. During these times, I encourage you to remember why you decided to go into business ownership in the first place and know that entrepreneurship is a journey of highs and lows.
- Ask Your Network for Help
Growing your budget is important, and you can increase your spending through friends, family, the SBA and other lenders — building relationships can help you get there faster.
At GYMGUYZ, we needed more vans. A new van is $35,000, which is money we did not have. I did my research and asked around. I asked experts, friends, acquaintances, you name it — and all this outreach led me to connect with a company that leased vehicles at a significantly lower cost, which helped me keep my overhead down. We did not have to put in too much upfront, and we got to keep more cash flow in our business. Do not be afraid to explore new options, take different routes and ask those around you for help.
On the same note, asking friends or family for a loan is a great way to increase your cash flow and capital. Be smart about it. Have a plan outlining terms of the loan in writing so that both parties are in agreement. Know how much money you are borrowing, how long it will take you to pay it back and whether you feel comfortable with that.
The Small Business Association (SBA) is also a great resource; use it to your benefit. The SBA has a variety of programs like 7(a) program to help small businesses find their footing in a growing economy.
- Continue to Learn
Finally, it is important to be connected in the industry. There are always people and resources you can turn to for answers. Never stop learning — there is always more information to know, use and retain. By building your glossary of terms, procedures and policies, you can ensure you are dialed in and always understand what is going on. Pick up books, read the news, analyze competitors and stay on top.
Most importantly, never forget to stay humble.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by This is Edinburgh