Business Success Strategies: How To Start Your Business Without Loan
A lot of people are held back from starting their businesses because they cannot get loan to start it up. But do you really need loan to start a business? Is there no way to own and run a business successfully without taking loans?
Of course there are. Almost all businesses can be started with little or no money and be successfully grown into multi million dollars businesses if their owners know how to go about it, which is what I want to share with you in this write up.
In fact, I do not encourage people starting a business newly to depend on loan for the take off of their businesses. My reason is that, from experience and studies, more than 90% of them will use the money recklessly on things that will not help their business to make money, and eventually the loan will be lost.
A lot of people starting business newly usually have high taste, coupled with high hopes for the success of their business. They usually envision that their business would immediately start making great profits, and money purring in for them to maintain a high profile life.
In this state of mind, they would want to have exotic beginning, with office in highbrow areas of the city and tastefully furnished, expensive cars, lots of employees, and other things they don’t really need now. They want to start big and so they go for loan.
Loans are not meant to cover overheads; they are to be used to finance the expansion of a business. Loans are actually meant for already established businesses with proven ability to generate revenue as reflected in their customer base, distribution network, production capacity, etc.
Such already performing businesses may need loans to enable them upgrade their facility, expand their operation, or to do certain things that will allow them to be more effective and efficient in their business.
If you take a loan to start your business, the more likely thing that would happen in a few years or months time is that you would lose it. I’m sorry if I’m sounding hard here, but that is the most likely thing that could happen.
There is a learning phase your business has to pass through when starting. It has to learn the best way to satisfy its customers so as to be able to keep them, and it has to learn how to deal with its suppliers, master its production and distribution, and a whole lot of other things to position the business on the part of success.
This learning phase has to be paid for because mistakes will be made to learn the needed vital lessons. The money you got from the loan may just be the prize to pay for it.
But you don’t have to go through the agony of losing your money and your business and not been able to pay back the loan you got when you can very well start your business with little capital, independent of loans.
I will now share with you proven business success strategies to enable you start your business on a shoestring budget without using any loan.
Start Your Business Small
Small is Beautiful. That’s actually the title of a book, which just came to my mind now as I remember the discussion I had with a successful business owner a few days ago. He was telling me how he thought he needed tons of money to start up his business when he decided to go the way of entrepreneurship after he resigned his employment.
But fortunately for him he couldn’t get any loan to kick start it. I said fortunately, because according to him, though it was painful at the time, that he couldn’t secure a loan to support his business, now with the benefit of hindsight, he would have easily lost the money.
He now realizes that most the things he thought he needed the loan for were not necessary, and worse still they were liabilities (take money away items) and not asserts. The business couldn’t have survived such situation for long, and the loan would have been wasted.
Luckily for him, he found Small is Beautiful, which taught him that to achieve success in business, the way to it is to look for a way to start it small and build it up.
There is always a profitable niche you can start from and possibly dominate in any industry. Don’t try to compete directly with businesses that have been existing for decades, thinking if you could secure some loans you would push them to the back seat overnight. It doesn’t happen that way.
In addition, cutting cost in operating your business should be a priority when starting your business newly. This means you will have to do several jobs yourself in the business. You may have to be the truck driver, deliveryman, secretary, account officer, and customer service manager. You really cannot afford to employ too many people at this time, and you don’t need to take a loan for it either.
Build Trust In Your Name
One of the most important success principles in business and other areas of life is having a trusted name. This is rightly captured in the popular saying that a good name is better than silver and gold. As a matter of fact, instead of relying on loan to start your business, you can actually take your good name to the bank and you will cash it. I will show you how.
In business, you are going to be relating with other people, such as customers, suppliers, and distributors. These people would definitely support you if they knew you are trust worthy.
Some of your customers would even be comfortable paying you upfront for your products, as well as some of your suppliers allowing you to take their products without money down. These support that you enjoy simply because you can be trusted are providing funds to your business. You would be able to achieve much more than a loan would have supported you.
However, know that Trust is earned. You will have to prove to your business’ stakeholders that you are a person of integrity, a man or woman of his or her words that can be relied upon. You will have to watch your words and actions diligently.
If you made a promise, make sure you honor it, or explain to the person you made it to why you couldn’t meet it. And very importantly, don’t take anyone for granted.
Good name, like anything of value is difficult and takes time to build, but to destroy it, it doesn’t take a minute. A good name is a great asset to your business to possess, far more than a million dollar loan, which you must protect by all means.
Watch Your Expenses
There are items needed for your business that you may have planned using the loan partly for, that if you take a deep look in the market, you may be able to find cheaper and good alternatives, saving you money.
When starting a business, you really have to be careful and restrictive about buying things, else you may end up buying things you don’t actually need, or that you could have gotten cheaply or for free.
Instead, before making a purchase first of all look out for any free alternative or other possible ways to achieve the same goal. Where there is none without upsetting quality or standard, then comb the market for cheaper kind, or one with the best bargain.
With this, you will be saving lots of money, or not needing to spend money at all, thereby making loan taking irrelevant.
Forming Partnership
Two or more heads are surely better than one. In starting your business, if you can find one or two other people that share the same goal and vision as you, that will be fine. It will be easier for you to start up the business together, putting your resources, cash, kind, ideas, and energies together.
In partnership, you will most likely be able to get your business up and running successfully without any loan.
Joint Ventures
This is a great business success strategy that can shoot your business to unimaginable level of success quickly at little or no cost at all. When you go into a joint venture partnership with already established and successful businesses, you will be leveraging on their resources, and this puts you in a vantage position to hit remarkable success.
You can form joint venture partnerships with other businesses where your contribution to the partnership isn’t money, but something else you can readily offer.
For instance, you can do a joint venture with a media organization to help promote your company while in return you offer the media company an opportunity to equally gain something of value from the project, such as a percentage of the income from the project.
This is a win-win relationship, which enables you to start up, and build your business with or without money. And you therefore wouldn’t need to take a loan since your joint venture partner would provide for free what you needed the loan for.
Before I end this article, let me emphasize that I’m not saying you don’t need loans to run your business, what I’ve tried to make clear here is that for people starting out in business newly, they don’t need loans to start up their businesses. In fact, you shouldn’t try taking any loan to begin your business because it is almost sure that you may blow it.
Instead of looking for loans, I have given you proven and workable business success strategies to use and I can guarantee you your business will be up and running in no time.
When your business has gotten its footing, with enough customer base, workable system, and is breaking even, then you may need a loan to expand or upgrade it.
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