Start Your First Business with No Money
We ran into this question on reddit (paraphrased) “What is the best thing to do with $2,000? I’m 15 and have worked for a few months to save it.”
On commenter replied, “Buy some stuff and see if you can flip…”. This was not the best advice and needed rebuttal. Well that rebuttal received additional conversation and we turned it into this article with our advice for young people looking to make it big.
It’s important to reiterate, this advice is for first time young startup entrepreneurs. It is not for someone who has run a business or has investment capital to spend.)
Save that $2,000, and keep it for an emergency or something unexpected.
Choose your product or service.
Research a product and be ready to buy it (just don’t do it yet). It should be something that you believe in, something that has demand but needs a market test before you stock your shelves with thousands of boxes you have to get rid of. You don’t have to reinvent the wheel here either. Lots of people sell handbags, refrigerators, or cars. Buying is emotional, and with the right pitch you can sell anything that anyone else is selling. (Heck, just look around your house and think about the things you’ve recently made impulse purchases on. You weren’t the only one to do that.)
Make sure you can buy it.
Have your ducks in a row, so to speak, so that it’s a button click away once you do make that first sale. It would really stink if you make that first sale and can’t deliver the product.
Setup a store (or sales page).
There are numerous way to setup a free site that you can use for testing. It is not a permanent solution, but that isn’t the goal right now. The goal now is to learn how to sell, and start learning as quickly as possible. Begin a Blogger site, or WordPress, or Tumblr, or whatever service you can find that gives you a free website. You can even get a FREE phone number at Google Voice for customer service requests. Oh and by the way you can even accept payments for FREE… Paypal is a great startup payment providers.
If you like it, someone else will too.
Now that you have a place to conduct the transaction, start communicating your life experience with and about the product. Twitter, Facebook, Instagram, Linkedin Groups, these are all FREE communication tools. Start conversations with people and be brutally honest. Honesty will make you popular, even if everything about the product isn’t roses and rainbows.
Build trust and start selling.
Now that you have everything setup, you’ll begin never ending process of learning about selling. Selling is the life blood of business. It doesn’t matter if you are doing a charity or a car dealership, you have to sell to succeed. Now a course on selling is a bit beyond the scope of this article, because learning about selling is really a never ending endeavor. A quick tip though… remember your “3 Buying Motivators” and that you need to convince your customer of at least two of the three to make a sale.
- Customer has to want it.
- How much time until they need it.
- Is the price to perceived value ratio right?.
(an article on the 3 motivators is coming soon, but here’s the short of it… You want something, it’s priced well then you buy even if you don’t need it right away. You want something, it’s priced too high but you need it right away, you still buy. If you only meet one of those criteria the person won’t buy.)
Create value and give it away.
Time to get creative. How you will execute this comes down to the details about the product and you simply need become a problem solver. Find a method to deliver value people, and in return you get information (email, Twitter follower, Facebook friend – which you can use to begin the sale pitch later). Fair warning – weird example coming up – If you were selling toilet paper, you might start a Twitter account that discusses the problems that everyone faces in the bathroom. Be funny, be brutally honest, be the trusted source for that human experience. Your sale might as simple as an affiliate link.
Self promotion is at least 80% of the work.
You have your communication tools, but sounding off on Twitter isn’t enough, (unless you get pretty lucky out of the gate and are saying something truly fresh and valuable, but don’t plan on it). Cross multiple platforms, keep giving value away, make friends with influencers, build an audience that you can leverage to become an influencer. There are dozens if not hundreds of ways to self promote, so just keep at it until you get your first sale. The hope is that your second, third and fourth sales all get easier.
Ask for the sale.
Use your communication tools, add value to someone’s life, and when the time is right, ask for the sale. (Hint: the time is right when you’ve established the perception of trust. You establish trust by giving value away.)
Get the money upfront.
Congratulations you made your first sale!!! Now you can buy! Beware though, some industries are ripe with fraud, and people trying to take advantage of new and inexperienced sellers. It’s a cost of doing business, mitigate the problem by making sure you keep records, well someone has said it better than I… trust but verify.
The important thing to remember is that you would have to do all of these things even if you had thousands of dollars to spend on your startup business. Sure you could buy ads and make sales like that, but then you will miss out on the education you simply have to have in order to run a successful business… You have to be able to SELL!
Now as long as you were up front about shipping times and didn’t over promise during your sales cycle you’ll be fine to purchase whatever it is you sold, and deliver it to the customer, with the peace of mind that you have money in hand before you knew whether you could sell your product.
Now be ready to provide great customer service – go above an beyond – and you will get a raving fan who may make your next sale for you. Speaking of that… get to work on your next sale too, and never stop selling. The profit you make should be used to make your selling process more efficient and to bring in more sales.
Oh, and don’t forget, people LOVE to buy, but they hate to be sold.