How to Start a Business With Very Little Money
By John Mullins, wsj.com
Everyone knows what the formula for entrepreneurial success is
supposed to look like. Come up with a great idea. Write a great business
plan. And then raise a boatload of money to make it all a reality.
That
final step is where so many entrepreneurs
falter—either they can’t get
the cash they want, or the very thought of getting it is so daunting
they just drop their dream entirely.
But it doesn’t have to be that way.
Small-business
people can find the cash they need to grow without going hat in hand to
reluctant bankers, pleading with relatives or pandering to venture
investors. They can, in fact, launch a business with almost nothing but
salesmanship and the willingness to take a risk.
How? By financing the company with their customers’ cash.
It isn’t a new idea—in fact, variations on the strategy have been
used by many savvy businesses, from Microsoft to Banana Republic to
eBay, as they grew from upstarts to household names. But many
entrepreneurs who have gotten an earful of the conventional wisdom on
financing may not realize that there are alternatives out there, and
just how simple those alternatives can be to implement, especially when
they can use the Internet to improve their reach and keep down overhead.
For
instance, businesses can act as middlemen between buyers and sellers
and avoid putting up cash themselves at the start. Or they might offer
subscription models, where customers pay in advance and so provide the
businesses with capital to make the products. Or they might offer deals
for a limited time, so that customers snap up the merchandise before the
business has to pay its suppliers.
Of course, entrepreneurs can’t finance every business with
customers’ funds. Some, like brick-and-mortar stores, are just too
capital-intensive. But for businesses that fit the model, this can be a
perfect way to get under way without leaving the company staggering
under debt or beholden to the demands of investors. And even if the
companies end up needing lenders or investors later on to expand their
reach, they can get deals on much better terms than they could at the
start.
Here’s a closer look at these strategies, and how some entrepreneurs used them to build successful businesse >>>
Commentaires
Enregistrer un commentaire