Believe it or not there are ways to start a business with no money in the bank. Having financial reserves does not always guarantee the success or failure of a business.
Many failed businesses began with tons of cash that was burned through quickly. On the other hand, several successful major corporations were started with little more than a dream and a little bit of room on a credit card.
While having your own financial investment locked into a business can provide a personal incentive for doing well, passion for the business in which you are in can mean more than a lot of money. Having a product or service you are committed to will help bring customers or clients to your door and quickly establish a cash flow to help you grow the business.
When talking about a business getting off the ground without money in the bank does not mean it will be free. There will be expenses needed for the business as well as every day living expenses.
Regardless of how you feel about your business, you and any family you are responsible for, will still have to eat and need a roof over your head. Developing a viable business plan can help you attract investors who may be willing to put money in the bank for you.
One such method that has worked to raise money for business startups is through partnerships. In essence you have to find people with money who believe in you or your product and are willing to take a chance on your success. They know that if you succeed they will realize a profit on their investment.
Each person who joins a partnership you establish is eligible to receive a portion of the profits based on the amount of their financial commitment.
For example, you are going to sell widgets for $50 each and in order to begin production you need $100,000. Considering the cost of production you can allow $10 per widget sold to be returned to the individual partners based on their investment.
If a person joins your partnership with $10,000, they have a 10 percent stake in the potential profits. For every widget sold they are entitled to 10 percent of the sale price, or in this case $5. The more widgets you sell, the larger the return during the established distribution period.
If everything goes according to your business plan and you sell 850 units per month, the partners will receive $4,250 return, split according to the percentage of their investment.
At that rate, their initial investment will be paid back within 23 and a half months plus they will have shared $2,000 in extra profit. The returns keep going to them allowing their initial investment to double every two years, provided your sales continue.
The challenge of starting a business without money in the bank can look very daunting at first; however, with careful planning and implementation in the initial stages, you can pull it off with some effort.
Godfrey Thaxter is a Marketing Consultant who provides
articles, tips and resources to help new online marketers
get started right with their internet home business.
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