Post-Covid Financial Recovery: How to Start Your Own Business with Little to No Capital.

Sometimes, dreams are conceived in our minds when we have absolutely nothing at hand. While many people dream of starting businesses, quitting the employment rat-race, and being their own bosses, only a handful of these dreams come true due to some unprecedented obstacles. 

Lack of (sufficient) capital is often one of the most common obstacles to starting a business. This is especially true in this Covid-19 pandemic era where people have been hard hit with financial blows, and many businesses closed. However, there are always options for raising enough capital to bring your dreams to birth. 

Below are Eight ways of starting a business even when you don’t have the capital to do so.

1. Draft a Business Plan: Have a well-drafted business plan to give you a clear projection of how much you will need to start the business, how much you will be making, and how much you will be spending. Remember to start with small figures and let the business grow steadily.

2. Get a Small-business loan/Digital Loan: You can consult your bank for small business loans or use digital lending platforms since most banks will want to see your financial statements before lending you money. With regular cash flow like a monthly salary, you can get a small-business loan from your bank.

However, since you are just getting started and have no evidence of growth, you can opt for digital lending platforms and have a repayment plan. Examples of digital lending platforms in |Kenya that you can use include M-shwari, Tala, Okash, Zenka, KCB-Mpesa, amongst others.

3. Approach Friends and Family: To get you off the ground, you could consider borrowing from friends and family and promise to return the money with interest once your business breaks even. Put the agreement down in writing and define the repayment period so that they can see the seriousness of your business.

4. Approach Credit Unions/SACCOs/Chamas: Are you a member of any credit union, SACCO, or the famous Chamas? These are known to be among the most convenient financiers of small and medium businesses.

Getting a loan from one of these is usually faster, less hectic, and their interest rates are significantly lower than bank loans. Consider approaching one of these sources to help you start your business.

5. Form a Partnership: If you don’t have the capital, consider partnering with a friend who has the money- you have the skill/idea, they have the money. Create an equity partnership and agree on the profit-sharing ratio. Don’t forget to put the terms of the partnership down in writing to avoid future disagreements.

6. Utilize Free Resources: In this digital era, technology has provided many free resources that help people start and grow their businesses with very little financial investment.

Social media platforms like Facebook, Twitter, Instagram, and WhatsApp help businesses to grow minus the sales and marketing expenses involved in traditional brick-and-mortar businesses. Most businesses don’t even have a physical store these days. And WordPress enables you to create a free website to advertise your products/services.

Once you have your product/service, you are good to go. Have a list of the things you need and research the ‘for free’ options available online.

7. Sell What You Don’t Need: Do you have anything around your house that you don’t use much (e.g electronics)? Well, you could consider selling some of them to help you raise all (or part) of the capital you need to start your business. You can always replace them later when you need them.

8. Remember, It’s More than the Money: When starting a business, recognize that you will need more than just the money. Other resources you need for a successful business include the idea, digital skills, basic money management skills, knowledge and experience, the desire, a vision, marketing skills, and networks.

Despite the many challenges involved in starting a new business, it’s always possible if only you try the many options available and put your best foot forward.

So, go ahead!

Don’t let the Covid blow put you down forever. When the going gets tough, the tough get going, right?

All the best as you start your new business!

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