There are many business books that people interested in starting a small business should read, How To Start a Business Without Any Money, is definitely one of them. Rachel Bridge who is very passionate about entrepreneurship has done a brilliant job packing so much information into this book that would otherwise have been difficult to access in one place. She concentrates on making a case that a small business can be started even when there are very little resources available. To prove this point Rachel starts a small business just to show it can be done and takes us through the various steps she took to start it with very little resources. But she doesn’t stop there, she presents a lot of information also that is very useful. No doubt Rachel has done a lot of research for this book and it’s no surprise that she has done a lot of journalism in the area of entrepreneurship and also written other books on the subject.
This is not a small book as it has 288 pages with 20 chapters, but don’t let that deter you from reading it. Also you don’t need to read it from cover to cover, the chapters are titled in such a way that you can decide which parts of the book you want to read. Below is a very brief review of each chapter.
Chapter 1 – How to think free
This chapter is an introduction to what you will learn from the book as it briefly summarises cost effective ways to access resources for your business. She discusses these areas:
– Work from home
– Use the skills you already have
– Use the resources you have at your fingertips.
– Do all the work yourself and don’t pay yourself a wage
– Hold on to the day job
– Source free equipment
– Tap into free inspiration
– Access free research
– Get a grant
– Learn the business skills you need for free
– Make the most of free technology
– Make use of existing local infrastructure
Each chapter concludes with an action plan. The one for this chapter suggests that you should:
1. Find free local business networking groups and join them
2. Think about local infrastructure in your area that you can take advantage of
3. Write down skills and resources you have that you can charge for.
Chapter 2 – Ideas that will make money fast
Here ideas of products that can start making you money almost immediately are covered. Rachel writes what to do and what to avoid. The products she suggests are:
-Products or services that people need not want.
-Product or service that people understand.
-Product or service in areas that people already feel comfortable with. A category that already exists in the market.
She also suggests that:
-The product or service chosen should have more than one way into the market.
-Start with products that don’t cost of OK much to produce.
-Focus on a business with variable costs not fixed costs.
And here’s what she says we should avoid:
-Businesses which need to reach a lot of people before they really get going.
-Businesses which rely solely on advertising four revenue.
-Businesses which make money from linking to other sites.
Chapter 3 – Putting it into practice
To validate some of the advice she is giving Rachel decides to start a small business. She discuses the criteria for her business and how she decides on a product. Her business idea is called Entrepreneur Things and the first product she decides to sell is a mug with the word ENTREPRENEUR written on it.
Chapter 4 – How to spend nothing on premises
When I saw the title of this chapter, I asked myself the question, how is this possible? I soon realised that while there are some businesses that definitely need premises, in the age of the internet, you can start a lot of businesses without premises. And as Rachel discusses here, even for those who may need a physical location for their businesses, there are some creative ways to go about securing space.
The most obvious option for a lot of businesses is to work from from home, particularly if your business is about providing a service that is internet based. Here are some other options that Rachel suggests:
-You can use hotel lobbies with free WiFi to get work done and even hold meetings there also.
-You can use a pop-up shop
-If your business is retail based you can set up in a concept store which is a communal retail space that sells a mix of brands, products, and services provided by a range of small businesses.
-You can become part of a co-operative that is composed of businesses which join together to cut overhead costs.
-People are also running businesses from self-storage facilities. This is an option you can explore though not for retail space, just office space.
Chapter 5 – How to spend nothing on staff
Another title that got me asking questions, but Rachel does give some good options such as:
-Using websites where people can bid for your work
-Using people on a contract basis where you only pay them if you win a contract which they will be working on.
Chapter 6 – Taking the next step
In this chapter Rachel tells us what the next step for her business is. To move the business forward she:
-She finds a supplier for the mugs
-She finds a designer to print ENTREPRENEUR on the mugs
-She opens a business account
-She registers her business as a limited liability.
-She protects the design of her products by copywriting it.
Chapter 7 – How to spend nothing on a website
It is a given nowadays that a business must have a website, but they can still cost a bit of money. Rachel gives a couple of suggestions to spend little or no money building a business website:
-Build a free website yourself in one of the online website builders.
-Pay for your website with equity from your business, although you have to be carefully not to give too much equity away.
Chapter 8 – How to spend nothing in stock
While this may sound challenging, according to Rachel there are ways it can be done. To start with she suggests taking a just-in-time approach when it comes to stock which means you only order products when people make a purchase. This is useful for buy-and- sell type retail businesses. You can also order products which require upfront payment from the customer. Another option is to specialise in particular products and direct people to the supplier of these products from your website.
Chapter 9 – How to price your product or service
Pricing a product or service can be tricky as people have the tendency to price either too low or high. Rachel discusses some things to consider when pricing your product or service. To set your price make sure you research what other similar or competing products cost, find out what people would be prepared to pay by asking potential customers when setting your price. Think of how much profit margin you want and the issue of VAT added to the price of your product. Rachel also discusses what to consider if you want to price your product higher than that of your competitors. Three topics she writes about are:
1. Pricing for selling on the high street
2. Pricing for selling to big retailers
3. Some tips to set the right price
Chapter 10 – Get the cashflow right
While I have no exact figures, cashflow problems is often cited as being the top reason why businesses fail, so the information in this chapter is worth paying attention to. Here Rachel describes what cashflow is and what it isn’t and outlines some actions to take that can help business owners to manage cashflow which are:
-Getting paid for your product or service upfront
-Get payments to match the easy cashflows in your business
-Buy stock in small quantities
-Make friends with your supplier
-Ensure customers ate creditworthy
-Invoice customers properly
-Chase all payments
Chapter 11 – How to spend nothing on marketing
Marketing is another reason why businesses fail. When nobody knows about a product or service because of inadequate or non-existent marketing then nobody will purchase the product or service. People may complain that marketing is expensive and Rachel provides some ideas for affordable or even free marketing. Here are some of the ideas she discusses:
-Make your product or service unique so it stands out from the crowd.
-Use word of mouth
-Send postcards to people
Chapter 12 – How to spend nothing on promotion
Personally I don’t know why this chapter isn’t part of the previous one as I really classify the information discussed here as marketing. So what Rachel discusses here is really an extension of chapter 11. Most of this chapter concentrates on promoting a business using social media tools such as Twitter, Facebook and YouTube. The latter part of the chapter discusses going viral and getting into print.
Chapter 13 – How to spend nothing on advertising
This is another part of book I feel should have been part of chapter 11 because the information discussed falls under marketing. The whole chapter concentrates on Search Engine Optimisation (SEO) and Search Engine Marketing (SEM).
Chapter 14 – How to get free help and advice
This chapter is all about getting feedback that can help improve your business. Rachel discusses how, and who you can get feedback from, which include close acquaintances and customers. Feedback also can come by way of listening to yourself, locating your business where other businesses are located so you can learn from each other and getting involved in a low cost incubation programme designed to help entrepreneurs start up by providing access to free resources and guidance.
Chapter 15 – The importance of starting small
Many people who want to start a business may not have the resources or time to start a full time business, so in this chapter Rachel reinforces the possibility and benefits of starting small. For me this was an exciting chapter because she discussed some benefits of starting small and illustrated some of them with some real life stories.
Chapter 16 – The business partner decision
If you are thinking of getting a business partner then the advice Rachel gives in this chapter might be helpful. She first outlines the advantages of partnerships and illustrates partnership through her own choice to seek for a partner in the business she started. The chapter concludes with some information on where partnerships can go wrong.
Chapter 17 – How to spend nothing expanding your business
While some want their businesses to stay small others will make the choice to expand and grow bigger. But scaling a business upwards is not cheap. Rachel offers some advice on how to expand a business in an affordable way. Personally I didn’t see much value in this chapter as it discussed ideas such as expanding the product range, being creative in ways that will help you find new markets for your product, exporting and analysing data on your website to identify more potential customers. I didn’t think any of the ideas Rachel discussed could help to expand a business without spending any money.
Chapter 18 – How to get post start-up funding
This chapter simply looks at ways you can raise money after starting your business. The options discussed are:
-Selling equity (part of your business) to raise money
-Friends and family
Chapter 19 – But what about the recession
A discussion on how to think and act as as business owner during a recession.
Chapter 20 – Onwards and upwards
I see this chapter as a call to action. Rachel has presented us with a lot of information, some of which she acted on by starting Entrepreneur Things. She now challenges us to take action too.
Overall this is a book with lots of helpful information and Rachel has certainly done her homework. I do have an issue with the title though because a lot of things Rachel suggested will still cost you some money, even if not much. Despite this, Rachel has written a good book and I do recommend it.
Start something lessons
I learnt a lot from this book especially from the breadth of ideas discussed on how to save money or spend nothing at all on resources needed for a business. The top two saving tips for me were:
1. Spending nothing on premises by using pop-up shops, storage space, and concept shops.
2. Spending nothing on stock by adopting a just-in-time approach.
I also learnt a lot from the sections on cashflow which reminded me about the importance of managing money for business survival and starting small which shows that there is nothing wrong with starting small, plus it has advantages too.