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Everyone! While this might be a slight exaggeration, I don’t think there is anyone alive who hasn’t had an idea for a new product or service or company, because we are always looking for innovative ways to make our lives better.
Another recent survey showed that 20% of those over 65 wanted to start a business.
According to a new survey commissioned by Bankrate.com, more than one in four respondents who have a secondary source of income said they are “more passionate” about that work than their primary job or career track, a number that jumps to 40 percent for 18-to-22-year-olds
Tom Corley, author of Rich Habits proved in his study that of the 4 most common ways to become a multi-millionaire, that starting your own company was the fastest, most rewarding path, and that it guaranteed the most money. 28% of the multi-millionaires in his study had accumulated at average of $7.4 million in 12 years.
Seven out of the 10 richest billionaires in the world, including Jeff Bezos, Bill Gates, Mark Zuckerberg and Michael Bloomberg, all got rich by starting their own company. (5)
So, let’s just concede that a majority of Americans… and I believe the majority of people in the world want to start a company. Why isn’t it happening?
Only 10% of Americans own their own business.
What gets in the way?
What most people tell me is that they have a money problem, but I personally, don’t believe that. I believe most people have a partner problem. Sometimes they have an idea problem but idea problems can be solved with partners. Money problems can be solved with partners, too, but I just don’t believe that the biggest obstacle is money. Starting a company just requires a different way of thinking or as we say at Partnerhere.com, you need to learn how to do deals differently.
Here is what Jack Ma, billionaire founder of Alibaba had to say. “I think most of the startups, the number one mistake they have that they always say I don’t have money. If I have money, I am going to solve this problem,” Ma told CNBC-TV18 in an interview that aired in 2015.
Now, listen to Mark Cuban from SharkTank: “I think the biggest mistake people make is once they have an idea and the goal of starting a business, they think they have to raise money,” Cuban said on the podcast “On Air,” “and once you raise money, that’s not an accomplishment, that’s an obligation. Now, you’re reporting to whoever you raised money from.”
Cuban says entrepreneurs who rely on outside funding can become too beholden to the interests of their investors, who might have a different idea of how to grow the business. “If you can, start on your own … do it by [yourself] without having to go out and raise money,” Cuban tells Seacrest.
The Right Ideas Generate Revenue
My mentor Stan Leopard taught me that most great ideas can be bootstrapped. If your idea is good enough, you can pre-sell the product or service to a needy early adopter who will pay you up front for your product or service and if you find enough early adopters or price it high enough, you can start your company with your customer’s money. This is always my preferred way of financing startup and growth. You are proving your market exists by selling your product or service from day one. This is how I created most of my content for my training business. I got paid to create it by clients who needed it. When you bootstrap this way, you also have a committed customer partner who wants you to succeed because they have a vested interest in your success. They need what you are selling!
What Would You Do with the Money If You Had It?
When I talk with entrepreneurs who are all excited about their idea and tell me they need money to start their company, I always ask what they would do with the money if they had it. This is where it gets interesting.
Most people tell me they would use it to hire people who have skillsets the founders don’t have. Payroll is expensive and quickly builds high burn rates. Instead, I recommend that you find key partners who will work for equity or a success fee or a commission or some other creative form of compensation like trading your skillset for their company. If you want really committed people, it is important to find people who believe in your idea, and those who are willing to work for equity or a success fee are true believers.
Sometimes founders tell me that they need a maker space or an office or retail space that costs money. Again, I would always try to find someone with space who will take equity or a commission rather than rent. Rent comes due every 30 days and as a lifelong entrepreneur, I can tell you it feels like every ten minutes! Trade for space. Find a way. Don’t build debt or your burn rate.
Spend it on Marketing and Advertising
The next big expense on the budding entrepreneur’s list is marketing and/or advertising. This is a huge mistake for many reasons. If this is at the top of your list, you need to slow your roll and learn more about revenue generation strategy. Public Relations ALWAYS comes first. Why? Because it is 10 times more credible than advertising and it costs NOTHING! PR leads! PR also leads to more PR. It is a virtuous cycle.
You also need to get close enough to smell your customer’s breath. That means selling one-on-one to potential customers so you can learn more about their true needs and how they feel about your solution. What is their motivation to buy? What problem are they solving? What makes your product different or valuable? What words do they use to describe your differentiation? This research is essential to getting your company off the ground the right way. Build your Minimum Viable Product and start selling. You will learn more and spend less. Keep adapting until you have strong market pull.
You don’t need marketing and advertising money until you have SALES. Once you have sales, you can start taking a percentage of revenues to invest in advertising and marketing.
Invest in Product
The last category entrepreneurs tell me they need money for is the cost of the product itself. This is not even and issue if you are a service company but if you are manufacturing a product, you may need money for R&D or to build prototypes. I would offer a few ideas here. The first is to get your first customers to pay for it. They second is to fund it yourself from your current income, if you can afford it. (Of course there is always the friends and family option.) Lastly, you can crowdfund on Indiegogo or Kickstarter or many others. If you can cover the other categories of expenses through partnering, you won’t need as much cash for your product and your likelihood of success at crowdfunding will be greater.
They highest value assets you can build in your company are great ideas. Great ideas don’t come from navel contemplation. They are created in great conversations with smart people. I’m sure you’ve heard many CEO’s say their greatest assets are their people. People are awesome and the real assets they create come from their ideas. The right idea is worth billions!
The Bottom Line
The bottom line is that you probably don’t need money to start your company. What you need are people and access to assets. That’s why we built PartnerHere…so you can find people, ideas and assets without cash. How can you use the awesome assets here to build your great company faster, without finding investor money that comes with strings attached? Start exploring the possibilities today at PartnerHere.com