Do you really need a lot of money to start your business?

Before you go all crazy wondering how much money you need to start your own company, take a deep breath and keep reading. I can assure you it is possible to put your idea up and running for a very small amount. Of course, growing an expanding will eventually require bigger investments and knowledge, preferably from someone who has done it before, but for starters, don’t let money be an excuse to stop you from building your company or manufacturing your product.

Here are some thoughts on the subject:

Embrace imperfection

For every company, there is a picky entrepreneur who wants every little detail to be perfect before they launch their product. In my experience, this is not the best approach to start, because no matter how hard you try, there will always be imperfections and you will learn mostly with trial and error. Nowadays, there’s no need to ask for money to build a website or prepare your business material. There are thousands of free sources to learn from and platforms for free or very low prices to work on. Remember what Reid Hoffman, co-founder of LinkedIn, once said: “if you’re not embarrassed by the first version of your product, you’ve launched too late.”

Test with real clients

Asking for money will not get you new customers. That’s why it is so important to start smart. Here’s an example: Eat Tasty is a catering company that delivers homemade food door to door. Before they became one of the main food delivery players in Lisbon, they were a small company working from Whatsapp. Yes, that’s right! They got their first orders from a Whatsapp group created to test the idea before investing big sums on it. This allowed them to test their ideas and change models they were not thinking about before. Once they started getting more and more orders and the concept proved to work, they moved on to the next phase.

Keep your expenses low

We’ve all heard how Google started with two young geeks working on their garage. That story might seem a bit romantic, (it is in a sense because it takes more than a garage to make a real project work), but the reality is that if you start with very low costs, aware of every cent you spend, you will be more careful with your expenses in the future, and investors will appreciate how much you care about your money and theirs.

Prove your idea works

When I visited WebSummit last year, there was a company asking for a sum of around 200k for an idea. Basically, it was a pollution sensor which showed major pollution spots around a certain city, using an app with a map. It was barely an idea, they were seeking investors to build the sensor and hire cars to spread around the city, in order to measure pollution rates. I’m not sure they got what they asked for, however, a few months later, I met a company with the same idea, but unlike the first ones, they had built the sensor themselves and used bikes to go around the city finding the spots. They had all available data already, as well as low costs features to make things work. My point is, you need to prove yourself and others that your idea is feasible and doable if you want to increase chances of finding investors in the future.

Make it work first. Think carefully about how you can do it with little investment and test with real clients. Then, let me know how it went.