How to start a business with no money. Hint: Don’t…

After the Army my first job was selling BMWs at the local dealership. I hated it, but it taught me some invaluable lessons about myself. It didn’t take me long to decide to go out on my own and since I liked cars, I figured I could start a little mobile detailing company out of my SUV. The research I’d done, the YouTube I watched, and the local market all made it simple enough. For a very modest $500 I had an LLC, cleaning supplies, small pressure washer, a water tank, and that good ol’ Airborne Ranger mentality. With that I could get into the market, tap into my network, and after a few short months grinding it out, charge anywhere from $200-$400 for a 3 hour auto detail. Not too shabby for a $500 investment. But is that really all it would take?

It didn’t take too long before I was detailing commercial fleets, dirtier cars, fixing scratches, and charging more. Great right? Of course! Mo’ business equals Mo’ problems which could be solved with Mo’ gear…And Mo’ money. Money which I now needed to spend, which if I had just invested in the first place, I could have avoided many of these growing pains. Many entrepreneurs are self-funded, start from scratch, and build up from there. When it comes to initial investments, scalability, and ultimately ROI, that initial investment and commitment need to be considered carefully. The Small Business Administration conducted a survey for all startups in 2023 that directly correlated start-up success with initial funding and found that overwhelmingly, the lower the initial investment, the lower the success rate. Conversely, they found that franchisees whose initial investment can be hundreds of thousands of dollars or more, have the lowest failure rate. Clearly there’s something to be said about an educated initial investment.

So what should that initial investment be spent on? I’ll get to that in a moment, but first let me provide some more context. The same study stated that new businesses with less than $25,000 in initial start-up funds have significantly lower success rates. So firstly, if you’re about to quit your job, you may want to consider having that much set aside. This can factor into purchasing more professional and commercial equipment than anticipated, paying yourself, extra employees, and marketing. Additionally, 82% of businesses fail in their first few years due to cash flow problems. It’s obvious, but if the business isn’t making money, then it’s going to fail. People don’t know about your business, so they don’t buy your product. They don’t buy your product because it comes down to no one knowing you exist. How do they know you exist? You have to tell them! (And I don’t mean the soul reliance on volatile word-of-mouth referrals)

Now to answer the question. Your initial investment will always be the equipment necessary to do the job well enough to be professional. It’s kind of like buying a ratty old guitar when you tell yourself you want to learn. If you’re testing it out to see if you like it then sure, get something cheap. On the other hand, if you’re about to quit your day job to gig at your local restaurant, then you may want to get the nicest gear you can afford, then practice like a mad man. If you’re committed, all-in, and passionate, then why not get the nicest gear you can afford because if you survive the first 6 months you’re going to have to upgrade anyways.

Marketing is one of the most crucial elements of starting a business that many entrepreneurs overlook or underfund, thinking they can handle it themselves or relying solely on word of mouth. Your initial investment, if underfunded, can can sneak up on your quickly and create a larger headache than previously imaginable. Getting the word out about your business is essential. Without visibility, even the best products and services will remain unnoticed. Investing in a professional marketing strategy can make a significant difference. This means allocating initial funds to create a strong online presence, engaging content, and targeted advertising campaigns is crucial. A well-crafted marketing plan not only attracts customers but also builds brand credibility and loyalty. So, while you may be tempted to work harder instead of smarter on the start, but have enough discipline to consider the rest of the picture before launching without a long-term plan.

I hope you continue to follow me on my journey as an entrepreneur, a veteran, and a Christian. Please like, comment, and share if you gained anything from this blog. I look forward to chatting again soon!