No Money? No Problem!

by Tim Berry

Is it possible to start a business without money or collateral?

Anything is possible and most companies were started from someone’s ideas written down on paper and financed by those who saw merit in the plan. Still, realism is important. This depends a lot on the specifics of the business. Some businesses are relatively easy to start without start-up funds, some virtually impossible.

I think you need to match your ideas to reality. Millions of service businesses start without money or collateral. These tend to be consultants, graphic artists, accountants, and other professionals. You have a skill that other people need, you have potential customers, take a job, and get started. Twenty years ago I started my business plan consulting business without money or collateral, just a skill, contacts, and the will to do it. You probably know several people who have done the same.

On the other hand, some businesses just don’t happen without start-up money. For example, you may want to develop and produce some electronic item that the world needs, but for that business you’ll need money for designers, software engineers, hardware engineers, prototypes, testing, packaging, and lots of other start-up costs.

Even on a smaller scale, few restaurants or retail stores start up without money to pay in advance for the location, fixtures and furnishings, signage, and so on. In these cases, you don’t necessarily have to have the money and collateral yourself, because for a good business the idea is that you raise the money from other people who want to participate in the upside of the investment.

That’s what this whole site, Bplans.com, is about: developing the business plan and raising money.

About Tim Berry

Founder and President of Palo Alto Software and a renowned planning expert. He is listed in the index of "Fire in the Valley", by Swaine and Freiberger, the history of the personal computer industry. Tim contributes regularly to the bplans blog, the Huffingtonpost.com as well as his own blogs, Planning, Startups, Stories, Up and Running, and Planning Demystified. His full biography is available at timberry.com.

More from Tim Berry

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  • rita

    I am very disappointed today. I have applied for a loan from the ithala bank in south africa. i need capital for my medical company, they want me to give them security of 60% against my loan or an investment from me as a member. I just don;t get it…If I had so much of security, would i have come for a loan? I am so so disappointed.

  • http://? kim jackson

    I am so determined to open my own salon,but my dreams seem soo hopeless,why ?because i don’t have the money to even start. i once had income in 2005 and i started a corporation at the above email name,but still to get the building and take off with success and my visions of helping others feel good about themselves is on a complete standstill,i try to play lotto or wish someone could help me .i would like t set out a day at the salon where homless,low income families,kids who are starting school,prom,etc without money to look the very best come in on this special days ad allow me to care for them and thier needs. but i see it takes money to get money

  • Thola mlondo

    Hi
    I’m looking for a busness plan ,i’ve found someone who is selling the bar and the resturent and i,ve found the person who is willing to help prevousely dissadvantage black people with money to start their own small busness.i’m just looking for a busness plan

  • http://Www.smallbusinesswizardry.com Dane Pymble

    Very sound advice. I think funding can be a blessing and a curse at times, particularly debt funding. I think one should work on their project for as long as they can with the resources available to them prior to seeking funding.

    It is also very good to get some practical experience in an industry before going it alone. You can try getting part time work learning the ins and outs or even volunteer if that is possible. Not only will you get hands on experience but it’s a great way to build up your network.

    Also there are so many things you can do for free to create exposure such as writing a blog, participating in forums or simply helping out someone you know. I am doing all these things at the moment in my project Small Business Wizardry (www.smallbusinesswizardry.com). We help small business owners access resources and tools to help start and grow their small business.

    There is no better feeling than being able to help people out, sharing your experiences so they can also develop. It’s a wonderful learning experience!

    Stick to what you really love and give of your time and people will be sure to talk about you:)

  • anzar ali

    i want to make a live project, and for that i want to start a buisness, bt i’ve no money to start, whats the gavernment skimm for this….

  • http://bizgreenglobe.blogspot.com Jude

    I think your tips are hot. I am trying to start a business on shoestring and I think I’ll apply these tips.

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  • http://royaltyfashionandstyle.com Royalty Fashion

    This is great and very timely because I am planning to put up a soap making business next month but the problem is I have no enough capital to make it a go, I have all the idea and drive to make it realize but the big problem is–money…This information is really a good help.

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