6 Tips for Starting a Business With No Money


Many people dream of starting their own business but think that dream is out of reach because they do not have the money required to get a business started.  These six tips can help you start a business with little to no start-up cash.


1. Leverage Your Life Insurance Policy

If you have a whole life insurance policy with significant cash value, you can leverage that cash value through cash flow banking. When you leverage money against your life insurance policy, instead of taking out a traditional loan, you are only required to pay the interest, rather than also having to pay back the principal.



Because your loan is fully collateralized against your policy, you can get your money much quicker and without having to meet the credit requirements of a bank loan. Additionally, you still have the benefits that come with owning a life insurance policy.


2. Get Some Partners

Figure out who you know that has money to invest and might be interested in investing it in your business. Friends, family and coworkers are good places to start. They might be willing to offer you a low-interest loan or put up the financing in exchange for a share of the profits. Just make sure you consult with an attorney and work out all of the terms upfront and in writing, so that everyone is on the same page and knows what to expect out of the arrangement. When done correctly, going into business with friends or family can be a rewarding experience, but if done incorrectly could lead to a damaged relationship.


3. Choose the Right Type of Business

Some types of businesses are easier to start with limited funds than others. Businesses that rely more on the skills and talents of the owner than on purchasing expensive equipment and inventory, such as service or performance businesses, are usually easier to start with less capital. Examples of these types of businesses include plumbing, computer repair, musical performance, financial consultation or real estate sales.


4. Be Prepared To Work Hard

Starting a business with limited funds means you may need to do the majority of the work yourself until the business begins generating enough revenue to hire employees. Be prepared to put in a lot of hours operating the business and taking care of all the behind the scenes things that need to happen to keep the business running.

You will likely need to wear a lot of hats in the early going. You may need to be the manager, customer service agent, salesperson, head of marketing, mailroom and custodial staff, among other things.


5. Get a Line of Credit

A line of credit may be easier to obtain than a traditional business loan. Some banks and other financial institutions offer lines of credit specifically designed to help fund start-ups. These lines of credit often have more flexible repayment terms than a typical line of credit or consumer credit card. However, this financing method can be expensive, so it is best to only use it for the purchases you absolutely must make to get your business going.


6. Consider an Incubation Program

Business incubator programs are often sponsored by private companies or regional economic development organizations and are designed to help entrepreneurs with a solid idea, but limited resources, get their business started.  To qualify, you will need to convince the program administrators that you have a good idea and a solid plan for making that idea profitable. If you are accepted, the program may provide you with funding, shared office space, administrative services and other assistance.


Starting a business with little or no money is challenging, but it can be done with the help of a lot of hard work and a little creativity. These six tips can help you find creative ways to finance your startup and turn your dreams of owning a business into reality.

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