How to get your startup funded when all you have is a good idea and no money

There are many people out there with a very good idea for a business - but who have little money and as a result give up on the idea of actually setting up their business. The fact of the matter is that it’s a considerable challenge to start up a business from scratch with virtually no money - but it’s not impossible!

Using all the knowledge I’ve acquired over the years from books, formal schooling, seminars and personal experience, I know it’s possible and I’ll tell you how, using as examples the methods I’ve successfully applied to my past business ventures and which I’m now applying in my quest to launch a new software business.

Regardless of finance, you have to start with the resources available to you and begin building on them till you’re in a strong position to attract funding or get an investor.

So what are these resources? Time… and a computer! With just these two assets you have all you need to research (Google) your idea and begin writing a plan of action (it is important that you actually write it out because that’s the best way to organize your thoughts).

First you need to develop a business plan. To do this effectively takes a lot of work and effort - it’s not something you can just dash off in a week. Yes I did say that! If you’re serious about getting the cash for your business, you have to put serious thought and effort into your business plan.

Depending on the kind of business and the time available to work on your business plan it should take you between three months and a year to develop a credible business plan from scratch. It must contain comprehensively researched information on the nuts and bolts of the operation, on your potential competitors and on the market in which you’ll be operating. That’s a lot of work - but the good news is that it costs you nothing but your time. Exactly how much time you need to invest will be determined by how rapidly you’re able to learn! Without funds to hire someone to handle this work for you, there’s no alternative but to put the hours in - but I can assure you that this investment of your time will pay dividends in the long run.

Of course, you could go to a professional accountant - but even if you can afford to pay hundreds or even thousands for their input, there’s no guarantee that they’ll be as thorough as they should be and the chances are they’ll simply be covering ground you’re perfectly capable of covering yourself. You’d be better advised to go to an accountant after you’ve finished the first draft. That way, you need only pay for the accountant to correct any errors and tidy up your presentation - all of which can be achieved for as little as $500.

The next vital resource is the internet. Available free of charge to everyone, it’s an infinite pool of information in written and video-based formats. Make the most of this resource: consume as much information as you can about business in general and your market of interest. Attend free on-line seminars, subscribe to portals and all the on-line start-up communities that offer them. In short, use this resource to learn, learn and learn and never stop learning. Be humble and accept that you don't know everything and that you never will know everything!

The process of writing your business plan and attending these seminars and events will embolden you and give you more confidence.

The next important tool to help you acquire funding without having any money of your own is the building of a TEAM.

In this day and age, no one gets funded as a one-man band. OK, there might be exceptions to that rule but they’re very few and far between. Why begin building your team now? To demonstrate clearly to potential funders that you have the resources to start your business right away should the money become available.

Having a team in place also demonstrates that others have faith in your business and believe that it will succeed. Your business plan and team together provide tangible assets, which only require the life-blood of cash to come to life.

So, how do you build a team? First, you identify all the areas of expertise you need for your business to succeed. Generally speaking you’ll already have identified these during your initial business planning process. For example, do you need a web designer or an online marketer? And how do you find them and convince them to join your business?

The answer is to go back to research (Google). The key word to search for is ‘freelancers’. Start looking for freelance web designers or marketing experts - assuming those are the skills you need. Freelancers are mostly self-employed sole traders who charge much less than companies would for their services and experience.

The key is to start communicating with these people; to try to get them involved in your business by offering them incentives.

That’s a lot of hard work - but it’s well worth the effort because it’s a simple numbers game: if you email fifty you’ll get at least one or two who are vaguely interested. They’re the ones whom you can make the keystones of your team - and on whom you can begin building it.

You could also go to colleges and universities to recruit and speak to graduates who might be interested in what you’re planning. Of course there’s no guarantee of success but many new graduates spend a long time unemployed before finding suitable work so you may well find that some are interested - especially if you target those whose degree subject is related to your project.

You can also advertise on Google and various start-up portal sites. Using such resources you should be able to build a substantial team ready to take your business to the next level.

After you’ve built your team, you can start sending your business plan to various organisations for funding. Strangely enough, raising funds is a lot easier when you have your business plan and team in place. It’s those with a poor business plan and an inadequate team who tend to struggle with funding.

Finally, don’t be discouraged by the current recessionary climate: counter-intuitively, this brings enormous opportunity. Why? Because banks are failing to provide sufficient returns on investment, many investors are actively looking for a chance to earn more than the 3% per annum they’re currently being offered.

In conclusion, it’s your business plan, your team and your evidence of financial commitment to your business that will get you an investor.

Yes it means a lot of tedious hard work,. But, I assure you, it can be done!