Huge fan of the Sergio Leone western The Good, the Bad, and the Ugly here. Beyond being one of the best westerns of all time, the film also has a lot to say about the way we do business (or try to) in this world. Some are good ideas no matter what situation they’re applied in; others are so bad you should never do them, ever; and still others aren’t ideal but they can frequently get results. (These are the Ugly.)
We’ve scoured the web for some of the most popular advice on starting a business with no money and made our GBU distinctions below. See if you agree or disagree.
From Chris Guillebeau, author of The $100 Startup: Reinvent The Way You Make A Living, Do What You Love, And Create A New Future:
Good: Turn your general idea into a specific idea.
Our Take: Ideas are worth nothing until they’re put into action. But the only way to put an idea into action is to hone it until there is a clear progression that leads to a sustainable source of income.
Good: Don’t wait to get going.
Our Take: We don’t believe in jumping right in, but Guillebeau stipulates that you shouldn’t wait as long as you have a plan of action. He suggests setting a timetable of 30 days or so to get your business developed and launched. That, we can get behind.
For a bit more on this tip, here’s Trent Dyrsmid’s “The Best Way To Succeed in Business Is to Be in Business”:
Good: Tell everyone you know about what you’re doing.
Our Take: Yes. This instills a healthy dose of accountability on you to get things done. Without talking about it, it’s too easy to delay and delay and delay until years have passed with no action.
Good: Commit to a process of continuous improvement.
Our Take: Right again! If a business doesn’t learn from what it’s doing right AND what it’s doing wrong — if it’s the same exact business in two years that it was on start date, in other words — it’s destined to fail.
From Donna Fuscaldo of Fox Business:
Good: Start in the garage.
Our Take: Good advice even if you don’t have a garage! Fuscaldo is saying you shouldn’t add to your overhead unless your overhead adds measurable results, allowing you to maximize income. Most of the time, especially in the case of micro-businesses, external office space is just an unnecessary expense. Find a place to work where you don’t have to pay any extra and keep it that way until you can justify adding the expense.
Ugly: Get paid upfront.
Our Take: On paper, yes, you should get paid upfront as soon as humanly possible. But when you’re unproven and just starting out, getting many clients to agree to those demands can be unrealistic and crippling. Take this on a case-by-case basis and don’t let it affect your decision to leave promising business on the table. Once you get established, however, make upfront payments a requirement.
Good: Barter for what you need.
Our Take: So you can write but you can’t program? Partner with someone who can and instead of paying them, offer to supply free content for a limited time in exchange for their services. Bartering is not dead. In fact, it’s still a great way to overcome no resources. Determine the business you want to be in, hone your idea, and find someone to fill in the gaps where you’re lacking. Just make sure you have something (other than money) to offer them in return.
Good: Commit to keeping costs low.
Our Take: This goes back to working out of your garage. Use any means necessary to cut costs. For an excellent take on how to maximize your ability while minimizing your expenses, read the Robert Rodriguez book Rebel Without A Crew. Rodriguez made his first feature film for about $7,000, and it single-handedly opened the doors of Hollywood to him. Great book for entrepreneurs of all stripes.
Source: Fox Business
Bad: Use credit cards.
Our Take: No. Lousy idea. Credit cards impose higher interest rates and should never be used to fund a large-scale idea. If you can’t get the money somewhere else, then retool your business idea and come up with something that doesn’t require a substantial upfront investment.
Ugly: Borrow from friends and family.
Our Take: Not a good idea but not bad either. If you have friends and family who believe in you enough to loan the money and love you enough to not hire a legbreaker if something goes wrong, then have at it. Still, it can place unhealthy tension on your relationship should things not turn out the way you planned.
Good: Start a service business.
Our Take: Service businesses can be started with a very limited financial investment. You’ll need to put in the extra time, but if you go six months without work, nobody comes to take your house. (Provided you’re still working your day job and keeping bills current.)
Good: Don’t hire people to do something you can do yourself.
Our Take: Excellent advice, and it’s also worth mentioning that, these days, there isn’t much that is beyond your reach. With a number of online tutorials and classes out there from reputable institutions like Kaplan, not to mention free resources like iTunes U and YouTube, you can broaden your knowledge base for a fraction of typical college tuition costs (and maybe even free). Again, you’ll need to invest the time, but isn’t that better than bleeding money?
From Robert Pagliarini of CBS MoneyWatch:
Ugly: Build buzz.
Our Take: Pagliarini uses the skinny dipping example to prove his point: “The first person to jump in risks the chance that nobody will follow. But by the time four or five people jump in, all the risk is gone. Your mission? When talking to potential partners, sell them on the fact that you’ve got several other interested partners. Nobody wants to be first and nobody wants to be last.”
We agree that this is an effective way to do business, but two things you’ll want to consider: 1) Don’t misrepresent yourself, at least not in a way that is discoverable. 2) When it comes to jumping in early, don’t do it just to do it. Make sure you’ve got a solid business plan in place before launching the business. Sometimes entrepreneurs spend so much time building hype and demand that they neglect delivery. Don’t let that happen to you.
Good: Establish credibility and trust.
Our Take: Absolutely. Not only is it good for making repeat customers, it also places you in a position where more work comes to you without you having to always be on the lookout for it.
Source: CBS News
What are some of the best, worst, and ugliest pieces of advice that you’ve received on starting a business with no money?[Image via Flickr Creative Commons]