So you’ve decided you want to be an entrepreneur. That’s great. But you have no money and therefore have also decided to wait until you get some before you start your entrepreneurial journey. That’s not so great.

People come up with all sorts of reasons why they can’t start a business and a lack of money is usually one of them. You’ve heard the saying, “It takes money to make money”? Not true. Just ask all the hugely successful entrepreneurs out there who started off with no money. I’m sure this one negative belief must be responsible for millions of missed entrepreneurial opportunities alone.

At this stage I can hear many of you coming up with examples of scenarios where you might absolutely need money to get started. “But I want to build the first 6-star hotel in New Zealand – I need money to do that”, “But I want to create a pill that stops people from ageing – I need money to do that”, “But I want to create an alternative to Facebook – I need money to do that”…

And yes, you’d be right. Many businesses require an investment of capital to get them up and running. The problem is when you let this stop you from beginning your entrepreneurial journey.

Because by definition, the key part of your job as an entrepreneur is to figure out how to bring a vision to life in spite of your current lack of resources. If you give up on your entrepreneurial dream because you don’t have the resources, then you have missed the point completely – you have failed as an entrepreneur before you’ve even started!

So, what to do if the dream business you want to start requires money? Well, the first option is to go out there and sell that vision to get the investment you need.

This may require canvassing family and friends for early stage seed money, or learning how to pitch your startup to angel investors.

Alternatively if you want to fund your business through debt rather than equity it may require you convincing your bank manager to provide you with a business loan.

“But that’s too hard!” you say. “I really need $5 million dollars to start this business – who’s going to give me that?” Well, in all honesty, if it’s your first venture and you have no track record, connections or reputation to trade… probably no one.

So assuming raising capital is not an option, then what?

Enter… ‘bootstrapping’.Bootstrapping 101 - How to start a business with no money

‘Bootstrapping’ is what your business is considered to be doing when you’re simply trying to grow using the personal funds you and your co-founders can provide and what you can generate from making sales. It basically just means doing whatever it takes to get up that mountain; your job as founder is to pull yourself (and your team) up by your proverbial ‘bootstraps’ if that’s what it takes.

Generally the founder’s personal funds will be limited and soon depleted. This may mean taking on additional jobs to fund your way (Otago entrepreneur Trent Anderson is an inspiring example, working 10 hour days as a fencing contractor so he can keep working on his personal safety startup); downgrading your lifestyle by cutting back on expenses and sacrificing anything non-essential, e.g. entertainment, holidays, memberships etc; or freeing up cash from existing assets, e.g. selling your ‘toys’, or downgrading your car or home.

If the thought of having to do any of this frightens you, then maybe entrepreneurship isn’t for you; after all, if you’re not prepared to make sacrifices for your vision, why would anyone else back you?

But if you do go this route, obviously you will be aiming to fund your own way by making sales of some sort as soon as you can – even if it means what you’re selling is not the perfect end product you are aiming for. What is the minimum viable product you can start with to start generating cash?

In many instances, reward-based crowd funding platforms such as PledgeMe and Kickstarter, and even crowd equity funding platforms such as Snowball Effect and Equitise, enable you to do just this. These platforms provide opportunities previously unavailable to entrepreneurs for pre-selling their products and raising capital at the same time. You can get market validation, sales and funding all in one go – never before has becoming an entrepreneur been so easy.

Yes, but what if we just can’t bootstrap my idea? Should I give up on being an entrepreneur?

The real point of this article is that if you’re really committed to becoming an entrepreneur, you won’t let that stop you from getting started by finding an opportunity you can start working on now without any money.

To some extent, entrepreneurship is a self qualifying endeavour – the bigger and better you become as an entrepreneur (i.e. the more qualified you become), the easier it becomes to execute on bigger, more complex and difficult problems and opportunities.

So it may simply mean that you need to scale back your ambition temporarily and get started with a slightly more achievable idea first.

What may be a feasible and achievable idea for the likes of Branson, Musk, Gates, or Page and Brin, may simply not be feasible for where you’re at right now. That’s not to say it’s not a great idea, just that it’s one you are not yet qualified for. After all, if you were, you would have the reputation, networks, track record and resources to pull it off.

Entrepreneurship is a series of baby steps

If you’re really committed to being an entrepreneur, start by building a small revenue stream with whatever opportunity you can get to work on now.

What can you do with the skills and resources you have right now to help other people in some way? If you can’t think of anything, well then that’s your first entrepreneurial lesson – learning to see opportunities that you can address. Keep looking and you will find them – they are most often disguised as problems.

Start small. Invest your time, not your money. Go talk to people and find out what they need help with. Go find some customers. Focus on generating some cashflow – it doesn’t matter how small it is, because it’s the principles you’re learning in the process that matter.

To do this you will need to work on your business, people and technical skills. You will need to work on your sales skills. You will need to work on your skills in leadership and management. You will need to work on being extremely resourceful, frugal, and smart.

Keep at it, keep learning, keep on ‘keeping on’ and eventually with the skills you’ll have developed you’ll qualify to work on bigger ideas and opportunities, with more money flowing, and hopefully a track record that will support you as you get closer and closer to starting that ‘dream’ business of yours.

So far, I’ve started four businesses with zero money in four different industries – only the problems I saw people had, the skills I had to start solving them, and the ability to learn quickly as I went. Any money we’ve spent on our businesses has been money we’ve earned from sales or that co-founders have managed to scrounge together from personal savings, credit cards and small bank facilities. It’s been slow going, frustrating and certainly not easy, but with each new business comes a new level of success at an accelerated rate.

Rod Drury, founder of Xero says that “entrepreneurship is a series of baby steps”. So don’t let the belief that you need money stop you from getting started – because you’ll probably find yourself waiting forever.


RICHARD LIEW IS THE FOUNDER AND EDITOR OF NZ ENTREPRENEUR MAGAZINE AND ESPIRE MEDIA. HE IS AN ENTREPRENEUR SPECIALISING IN SALES AND MARKETING, AND HOLDS A BACHELOR OF COMMERCE IN FINANCE FROM THE UNIVERSITY OF AUCKLAND.

Like this? Get NZ Entrepreneur by email each week!