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Many would-be entrepreneurs never start because they’re waiting for the perfect idea or don’t have enough disposable capital to break out of the rat race.
These accomplished entrepreneurs and members of The Oracles share how to start with $100.
1. Buy and flip
Even the poorest of us has $500 to $5,000 of crap sitting in our closets. Those unwanted toys — the jacket you no longer wear, shoes that are out of style, or that old hammer — $7.99 on eBay is better than zero. That’s how you start building your capital.
Find out what things are worth. Research the hell out of it. Devour completed auctions on eBay to know the value. Become an expert in that category. Then, once you know your products, know the markets. Buy on Craigslist and sell on eBay. Buy some old T-shirts on eBay, and turn them around as trendy vintage tees on Etsy. Buy at Goodwill or a yard sale, and flip on Facebook Marketplace.
But you’ve got to make the time for it. $20,170 can be easily made this year if you take the 300 to 500 hours you were going to waste reading on the bus, playing an iPhone game, or watching every sports game and apply them to learning the markets. Convert that leisure time into flipping time. I’m calling it the #2017FlipChallenge.
2. Take inventory and crowdsource
A friend’s 15-year-old daughter once asked me how to start a business for $100. I asked her, “How much clothing in your closet doesn’t fit you anymore but is practically new or unworn?” After some thought, she replied, “About 20 percent.”
I advised her to set up a small Facebook page and a PayPal account. She then used her $100 to buy phone credits to make cold calls and to run small ads online.
She crowdsourced all her product images by asking other young people to submit snaps and pictures of their unused stuff and listed prices she felt would move the products quickly. She began to drive cheap traffic to her Facebook page by boosting posts with $1 to $5. Ultimately, she got half her school and a few other schools onto her page.
In three months, she sold over $19,000 worth of products and netted 50 percent profit. She sold at least $4,000 worth of shoes alone.
One person’s junk is another person’s treasure. Anyone can locally source goods for next to nothing from people who don’t have the time, energy, or technical know-how to list them online and promote. You can do the same using e-commerce platforms like GearBubble, Shopify, Amazon, Facebook, and Etsy.
Not having money is not a valid excuse — it’s a lack of resourcefulness that stops most people from making money online.
3. Sell or service
The best businesses to start when you have $100 or less are either sales or service businesses. All you need is your phone and the internet.
It could be a consulting business or selling cars, life insurance, or even vacuum cleaners door to door.
These fields hone the skills that will be invaluable when you have more capital. You’ll learn how to persuade, negotiate, overcome fear, and handle rejection.
In every city, someone will always hire you to do cold call, commission-only sales because there’s no risk: if you don’t sell, they don’t pay you.
4. Test before you invest
Would-be entrepreneurs are afraid to start because they’re afraid to fail. Test your idea or generate leads with 20 $5 Facebook ads — a $100 investment.
You’ll get a positive or negative response. If you get many leads that you can close — which bring in more than $100 — roll it out from there. This gives you momentum and traction.
We call it “testing before you invest.” Spend $100 and bring in $200 to $300. Spend $1,000 and bring in $2,000 to $3,000.
This is how a typical campaign starts and rolls out. The amazing thing is that in many cases, these metrics will hold upward and beyond $100,000 a week in spending. Now is the time to start. Act now.
5. Utilize your expertise
The simplest way to “bootstrap” (start a company with minimal finances) is to identify, share, consult or teach, and scale. Take your $100, and stash it away for a rainy day. I took this path to create an eight-figure global consulting and hosting company.
First, identify an area of knowledge that others want to know. Consider your profession, skill, or hobby. I look for one that satisfies four criteria: passion (you care), skill (you can do it), market need (people will pay), and timing (people are looking for it now).
Next, find out where people who need your knowledge hang out. It could be a forum, a website, a social media platform, or someplace in real life. Share your knowledge in a way that matches how people consume information. (Use your phone if you need to make audio or videos.) Besides building a reputation and authority, use this time to refine your ideal customer and branding.
When people want more, offer your services as a consultant, teacher, or mentor. You’re trading hours for dollars, and it only scales so far but that’s fine. Split the money you make into thirds — for yourself, to reinvest in growth, and to stash away for the right opportunity. Build your cash reserves and authority while refining your market research (customer needs and your offering).
Finally, scale. Raise your rates. Outsource and automate tasks that don’t match your unique gift. Hire others to teach or consult for you. Create an app, course, or product that doesn’t require you to trade time for money. License your intellectual property. You will make the most of your financial gains in this phase. So, besides building and empowering your team, use this time to innovate.
6. Don’t forget service
Growing up, my dad would get laid off from his union construction job from time to time. One day, he bought a $100 hedge trimmer and put up signs in the neighborhood saying: “I trim shrubs.” Folks called, and he could put food on a table for a family of seven. “Whatever it takes” was instilled in me from an early age.
My industry — horticultural landscaping — is one of the easiest businesses to start in. It’s a lot of hard work, but as my dad proved, it’s low entry (plus, you get a free workout).
The best way to drum up business with a zero marketing budget is to service the crap out of existing clients. Give them FedEx speed and Ritz Carlton service — it won’t cost you to be faster and nicer. Going above and beyond gives you the room to offer other profitable services within your niche.
Remember: every client has at least a few referrals in them. Push for these: not only are you spending zero dollars in marketing, you’ve already done great work, so the least they can do is offer you a name.
7. It’s never about the money
You could start over 6,000 businesses with $100. For example, starting a network marketing business is straightforward. It’s even simpler to take options on property. In fact, I’ve taken whole blocks of apartments with a $100 option and traded these properties.
But it’s never about the amount of money you have. It’s about how good the idea is. It’s about your team, joint venture partners, and money partners who will help you with the transaction. It’s about your deep knowledge and understanding of the marketplace that will transition you to liberation.
As the entrepreneur, it’s your job to articulate the vision of the future and bring the right people together. Money is the least of your issues.
Originally published on Entrepreneur.com. ©2017 by Entrepreneur Media, Inc. All rights reserved.