Published on December 12th, 2016 | by Jose Vasquez0
Can You Launch a Startup Tech Company With No Money?
If you’re struggling with getting capital, you may consider starting a business with no money–but is it a possibility?
One of the biggest challenges in starting a business is getting enough money for the initial investment. But what if you aren’t able to find much working capital; is it possible to start a tech company without any money?
There are a few potential answers to this question, and all of them depend on what type of business you’re building and what you mean by “no money.”
Let’s start by examining why businesses need capital in the first place. There’s some initial paperwork to file for a business, including registering with your state and buying a domain for your website, but overall, these expenditures should only cost you a few hundred dollars (and most people won’t have a problem with this).
The real “meat” of the capital comes into what most businesses consider necessary expenditures; these include paying for an office, paying your workers, sourcing materials, and paying your own salary. These operating expenses keep your business going, and without them, you may not be able to survive.
Some businesses also need capital to invest in initial products; for example, you might need to stock a warehouse full of items before you start selling them, or invest in multiple rounds of R and D before getting your product on the market.
However, it’s also possible for your startup to begin “lean,” by cutting any and all expenses that you possibly can. For example, you could skip the office expense by going fully remote. You could reduce your labor expenses by refusing to take a salary and hiring as few people as possible. In this way, you could feasibly cut thousands of dollars a month from your operating expenses, but you still won’t be able to cut everything.
Capital-Free Business Models
You’d also need to specifically adopt a business model that doesn’t require much of a capital investment. Anything with a physical storefront is immediately out. Most businesses that sell tangible products are out. Anything that requires a team of people is out.
Yet even then, there are dozens of business models you could pursue, such as building a mobile app, reselling other services, or even just starting a blog.
The Bottom Line
The simple answer is yes, it is possible to start a business without much capital, but it only applies to a handful of potential conditions. In any case, having a line of credit or some other access to working capital will be a major boon, no matter what line of business you’re in.