5 low-cost ways to bring your startup to life
Was one of your new year’s resolutions to bring that startup idea to life?
Did your hopes deflate by January 1 when you realised you had no money?
Luckily, what makes the world of innovation and entrepreneurship so exciting is that it’s littered with tales of people pulling themselves up by the bootstraps and building globally scalable businesses.
We’re not saying that your idea is the next Google, but it’s easier than ever to build a business with little capital.
We’ve come up with a few ways that you can at least get the ball rolling if you’re strapped.
1. Rely on the kindness of others (to a point)
Many startups don’t have the balance sheet power to be able to staff up from the get-go, so more than likely you’ll be building the proposition to take to an investor.
A popular way to get some help is to ask friends and family for help, but there’s only so much you can impose on them without risking your invitation to Christmas lunch.
A tried and tested route is apportioning equity to people who help early on in a company’s life – but it’s a limited playbook as you only have so much equity to give away (or want to give away).
If you’re a sales-led business, there’s no reason why you couldn’t have a sales force working largely on commission.
It can reduce your profit, but ‘units sold’ looks great on a pitch deck.
It’s all about finding ways to incentivise people to work without paying up front.
2. Free tools
Spending cash on various bits of software can be a money-suck for a brand-new startup, which isn’t great.
There’s all sorts of free software out there and business tools to help you grow.
Even paid software offers free trial periods, and this can be great for a lean startup.
MYOB offers a 30-day trial period so you can start out on your journey and try before you buy.
All these tools do different things and there are thousands of them out there – so get clicking.
3. Government grants and crowdfunding
Getting a government grant can be a tricky thing, but if you can pull off the paperwork and understand the sometimes-complicated selection criteria then it can be a good source of startup capital.
Through programs such as the Accelerating Commercialisation program, Research and Development Rebate, and government-sponsored Landing Pads, startups may find that there’s a pool of cash waiting for them.
Meanwhile this is a good place to start for New Zealand businesses.
Crowdfunding is also an attractive option for startups – particularly if the product or service you’re hoping to create is consumer-facing.
That can be in the form of a pre-order of the product you’re making, an experience, or a cup of coffee.
This is where you can get creative to incentivise investment.
The important part here is that you spell out your budget and what you’re raising the cash for.
It also helps if you’re a social media whiz to help draw attention to the campaign.
4. Time to incubate your idea?
Startup incubators and accelerators are starting to crop up across the country, offering those with an idea a platform to generate early capital and gain access to expert advice.
An incubator helps a budding entrepreneur develop their idea and flesh out exactly what they need to do to go to the next level.
An accelerator helps take an existing idea and build it into a globally scalable business.
You need to convince the operator of the incubator or accelerator than you have a good idea on your hands – because they generally want some equity in return for space in the program and funding.
As a bonus, pitching to these programs can help you hone your business idea.
5. Tell everybody about it
Chances are that in your professional life you’ve run across the perfect person to help your business – but you don’t know it.
Tell everybody on your LinkedIn/Twitter/Facebook list why you’ve moved from your previous job to chase a dream.
While this borders on the line between informing and spam, you never know who knows somebody who knows somebody who can help.
It’s all about how you frame the request. If it’s a sales pitch, then people may turn off immediately.
But if it’s light and enthusiastic information that could pique someone’s interest in a genuine opportunity, you’ll hopefully pick up some decent word-of-mouth marketing in the process.
These are just five suggestions that can help a startup get going with little to no capital. Do you think we missed anything? Let us know by leaving a comment below.