Starting a business is a dream shared by many. From taking a fledgling idea and turning it into an actual product, to the independence that comes from being your own boss, the advantages to owning your own company can seem endless. But good ideas don’t pay the bills – which is why money is often one of the biggest obstacles for future small business owners. With banks and investors more cautious than ever about where their money goes, it can be tempting to give up your dreams before they even begin.
It doesn’t have to be that way. In an inspiring article for the Wall Street Journal, author and professor John Mullins claims that many small businesses can start without the help of big banks or venture capitalists. “How? By financing the company with their customers’ cash,” he says.
Skip the bank – go straight to the source
Technology has changed the way we do business – and in many cases, how we start businesses. Web-based services and products don’t require the same amount of startup funding as traditional business ventures. This opens the door to all kinds of new opportunities, and one of them is using your customer as your biggest – and only – investor.
Selling products to make money isn’t a new concept, but how we go about doing that is. Crowdfunding sites like Kickstarter, GoFundMe, and Indiegogo were built on the concept of preselling, and their popularity is undeniable. A recent article from Business News Daily reports that financing a business through crowdfunding will go mainstream in 2015. Entrepreneurs: it’s time to sit up and take notice.
Stay focused to be successful
No matter where you get your money, obtaining funding is just the first step. When you have cash in hand, that’s when the real work starts. From managing your reputation and customer expectations to fine-tuning your processes, running a business is a big challenge – but it’s far from impossible. Here are a few tactics to help you stay on the right track:
- Don’t bite off more than you can chew. When you’re taking those first, crucial steps, it is extremely important to do business within your means. Making promises doesn’t mean anything if you can’t keep them. Manage expectations by starting small and building confidence as you fill orders and stay true to your word. Cultivate trust and loyalty by delivering on the small things; the big picture will unfold later.
- Use smart software to help you manage cash flow. For small businesses, every penny counts. Manual accounting and expense management consume valuable time, and can result in costly errors. Keep track of spend with affordable software solutions like Concur that give you – and your investors – peace of mind.
- Build on past success. Once you’ve perfected your initial product or service, it’s time to move on. Ask your customers what they want next, and decide on your next set of features or improvements. As in the beginning, be strategic in what you choose to add. Trying to please everyone is a sure recipe for frustration.
With a little ingenuity, it’s possible to grow and run a business without multiple rounds of venture funding. Your product really can sell itself – with a little help from a loyal customer base, and savvy management. Owning a small business isn’t out of reach anymore, so get out there and start making your dreams a reality.