It seems that every single new so-called entrepreneur out there believes that building your dreams consists of raising money for your project or taking out a loan. One of the most disturbing things I hear from newbies who don’t have any money is that it takes money to make money. That is just about the biggest reason most people fail before they even start, because they typically never do.
The world of business is brutal. I can tell you that because I have spent most of my life building businesses in many industries like a $40M concierge service down to a $5M website. However, not one of my businesses, not even my first one, was funded by investor capital or borrowed money or used a significant amount of money as a starting base. Each and every time I bootstrapped everything myself, and there are reasons for this.
In business, money is used to scale and is not the deciding factor of why someone gets started. It is also the reason why most people are in business; and therefore, needs to be made before it is spent (not the other way around). This is partly why I am big believer in not needing a lot of money from others to get started. You can simply save a little more until you can afford to get to the starting line.
Here are 4 tips on what you can begin doing now to eventually start building your dreams:
1. Spend Less
This may seem like common sense, but it is much easier said than done. It’s understandable, yet nowhere near as difficult as building a business. Make a list of all your spending in a month’s timeframe from every single credit card transaction, to money you withdrew at the ATM. Mark off anything that you didn’t actually need to buy.
The following month, make sure to cut down spending by proactively putting aside the same amount you spent on unnecessary items the month before, which gives you the false sense that you are out of money.
2. Create a Savings Account With NO Access
One of the main reasons people put off saving more is because every time they save, something comes up and they have to reach in their savings account to handle it. With a savings account in a non-local bank, like a credit union, that is not connected to your other accounts online and has no ATM access, you are forced to consider if your dreams are worth shattering before going and putting your hands in the cookie jar.
3. Get a Relevant Side Job
You may be required to work a job you don’t love or build a small company based on skills you have today that you don’t want to use anymore, but welcome to the world of business where you will have to learn to do things you hate until you make enough to focus on things you love.
Starting a different business from home on the side or getting a second job working for a business open longer hours may be the necessary steps to putting some additional money aside to get started on the actual thing you love to do.
4. Rethink Your Credit
Credit isn’t evil, and debt isn’t bad. It is leverage as long as you use it properly. Anything considered a liability should be paid for in cash, but many things that are assets can and should be financed. Understand what factors of your life can be transferred to positive debt to allow you positive cash flow early on with your new business. In other words, leverage bank money to cover good assets so that you can keep more cash in your pocket for starting your business.
Hopefully these 4 basic tips can help you put aside a little bit of money needed to hit the ground running. I’ll leave you with an example that may make you rethink why starting a business with money isn’t necessary, and why not having any money to start may even be a greater indicator of why you shouldn’t get started.
In my best-selling book, Third Circle Theory, I break down the core principles required to achieve a certain level of self-awareness leading up to living a great and purposeful life leveraging entrepreneurship. In one of the segments, I discuss the idea that a business is like its own entity; it has its own life. It’s like a baby, and you are its father, teacher, and just about anything else you want to be.
Therefore, if you can’t save enough money to have in your pocket to enjoy life, to have reserves for bad days, and/or to start a business; then what makes you believe you are qualified enough to form revenue for your new business? If you couldn’t do it for yourself, then chances are you’ll never do it for your business.
