How to bootstrap businesses with little to zero capital

“I need more money to become a business”

“You need a good capital to start a business”

I hear these phrases on daily basis – here’s an article with which debunk them once for all.

Caveat: this article is useful only if you actually want to work

A lot of people do not want to work: they want someone else to hand them out money. They’re, basically, economic parasites – and there’s really nothing surprising: there’s entire species whose life-cycle is based on living at someone else’s expense >>

If someone doesn’t want to work, there’s really not much to do: their life objectives are different than yours. You can surely send them this article, or anyway talk with them – but it’s just not in their nature. It’d be like talking a tiger into become vegetarian.

If you have a hard time wrapping your head around this, there’s another article about it incoming.

First of all: the mindset

Divide et impera: if you don’t have enough money to do a business as big as you want, start with a smaller venture. Earn money, set profits aside, build your capital – success: you now have the capital you needed to bootstrap a bigger project.

Please don’t use the excuse “What I want to do is too big to start small”: the bigger the business you’d like to do is, the more you can divide it into smaller parts. Being otherwise would be like saying “This cake is too big to make slices out of it”.

And here’s a way to structure a business – no matter the size:

The business pipeline

Your business is a conveyor belt with various steps – and here’s a graphic representation of the most common ones:

“Common ones” disclaimer Businesses can be of various nature. This pipeline in particular is thought mostly from service-based businesses – the ones that can be more efficiently run with little to zero capital (we were talking about starting with zero capital, right?): you just have to know your work. But, the underlying sense is the same for just about any kind of venture. For instance: if you’re to develop a retail business, step #6 is going to be named “Sale” instead of “Work” – which is exactly the same purpose, business-wise (#6: an activity that rewards your client with what was he looking for, and you with $$$).

I don’t think I need to explain what every single phase is about: they’re all pretty self explanatory.

About how to carry them out: that’s where your professionalism lies in. And that, you can’t buy with money – unless you think you can hire someone else to know your profession (but, at that point: why are you needed? Just to slap your name on the product and get profits off of it? Money is a reward for your help: i nobody is paying you, it means you’re not helping anybody).

“Further phases” involves secondary processes, like remarketing. But, as the name suggests: they’re secondary processes. The most important part is what led you to there.

Important note: if something goes wrong, you have to check previous steps

The fact they’re in chronological order does not means once you’re done with one you’ll never go back – quite the opposite: you’re going to do mistakes and, when that happens, you step back to see what you’ve done wrong. And, the more you go further, the more steps you’ll have to check back.

Here’s a practical example:

a sale went wrong.

Next steps? Sequentially, check if:

  • You know how to sell (“Selling” is oftentimes confused for “cram your product down your potential client’s throat”, because there’s very few good salesmen around. Instead: selling is genuinely helping your potential customer through his choice. You can see really good salesmanship in here: )

Do you? Next step:

  • The lead generation was successful (were these prospects brought in the right mood to receive a sales meeting? E.g. If the lead generation doesn’t make a good first impression, they’ll be wary of you – dooming your pitch to failure)

Was it? Next step:

  • The prospecting was successful (were these prospects the right ones? The fact they’ve shown interest doesn’t mean they are. For instance: they might be broke, or confused about what they actually need – and, hence, their interest misguided)

Was it? Next step:

  • The offer development was successful (was the offer actually good? Lead generation has to make a promise, but it’s up to your offer to keep it!)

Was it? Next step:

  • The market study was successful (in a very few words: are you sure you know enough of your industry to understand how to help it?)

In other words: check the whole pipeline until you find where the problem was. The ability to do so is called entrepreneurship.

Again: the answer to “I don’t have enough funds”

If you don’t have enough money to start a business as big as you want, start with a simpler business: solve a smaller problem. For instance: wanna do movies, but you don’t have enough money/network to do it? Start with commercials. Don’t have enough money/network for that? Start by being a runner. Don’t have enough money/network for that either? Start by washing dishes, in the meantime you study on the internet (which is free) how these things work. In other words, and I’m going to write it big, once again, so that it sticks:

Split big problems until they’re small enough to be handled successfully by your current abilities, and use the incoming profit and knowledge to grow.

Yeah but it’s unfair: I know how to do big right now. I don’t want to lose time working my way up” You can absolutely do this: do you truly have the knowledge to make something big from the get go? Go pitch CEOs and executive producers from day one: if you have a good idea, they’ll accept. That’s what they do for a living: shipping good ideas.

It is beyond me how can you know how to create something successful without having had to work your way up to get there – but, if you anyway know, that’s how to do it. The pipeline about how to run it is in this page, just above this paragraph.

Earn money, keep some profits aside, build your capital >> there you go: you now have a capital to invest. Rinse and repeat until you’re doing the things you’d like to.

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