How To Start a Business With No Money. How I Started my Company without Investing my own Cash.

In 2014 I started my new business, my own production of solid wood flooring with no money and no bank credit. Today I will tell you how to start a Business with No Money in 3 steps.

By that time, I already had my own store where I used to sell wooden floors together with my business partner. In 2014 there was a big financial crisis in our country. We realized that if we want to survive our business, we need to change our focus to selling local solid wood flooring.

Step # 1 of How to start a Business with No Money is Selling other brands.

We started to sell the local solid wood flooring produced by other companies. It was a complete whole product – the wooden planks were already finished with oil or lacquer and were packed in a box with a nice branding of some other company. Customers were paying 100% in advance, and the delivery was normally in a month or two. Since we didn’t have to invest our own cash, this approach is a great answer to How to start a Business with No Money. This allowed us to maintain the business and grow our sales in crisis. But soon we realised that we can increase our margin and make more money if we do it differently…

Step # 2 of How to start a Business with No Money is creating Our own brand.

We thought that it would be really great to start selling the solid wood flooring with our own nice branding on the box. We found some guys with a little garage workshop who were able to finish the wood – to sand it and to cover it with an oil or a lacquer. And their work was very inexpensive. So that was a start of our own branding.

After receiving the payment from the customer, we were purchasing the unfinished wooden planks from some smaller factory. We were also purchasing oil and lacquer in bulk. Then we were taking all of that to the guys in the garage, and they were doing the finishing works, including packaging. When the order was complete and ready for delivery, we were organizing the transportation and putting the stickers with our own logo on every package. It was significantly more profitable than selling the products of other popular brands. It also helped us to avoid the price competition.

But there was one problem. The guys in the garage were drinking too much vodka. As a result, every order was like a lottery – we were never sure of the quality of our product. Sometimes the quality was really bad, sometimes we didn’t deliver on time. We were losing the money, but most importantly, it was killing our brand. We started to look for the solution, and it took us to the step 3.

Step # 3 of How to start a Business with No Money was starting Our own production.

We saw that the significant part of the product cost belongs to the finishing works. It was the money that we pay to the guys in the garage for their services. I calculated that if we receive a big order or a few smaller orders for the same amount, the money that we would have to pay to the guys in the garage would be quite big. Instead of giving it away to these alcoholics, we could use this money to rent a large warehouse, buy the equipment and hire a few responsible people to start our own production. We knew the finishing technology, we knew that we are able to teach the staff and control the process ourselves.

But the main thing is that we don’t have to invest our own money. We can simply use the money that we will receive from the customers, because we pay for the finishing works anyway. You ask: “How to start a Business with No Money?” – that’s how we did it in 3 steps. According to our calculations, if we receive these big orders within one month, we will have enough money and time to organize the production and complete the orders within the contract terms.

4 Orders covered all expenses to start our own production!

We made a decision and started to prepare. My business partner found a good facility. I created the list of the necessary equipment. And we also had some people on our mind which we wanted to hire. And after a few weeks it happened – we received 4 big orders. We immediately signed the renting contract and purchased the equipment. I need to admit, it took longer than expected to hire people, so the orders were a bit delayed. But we explained the situation to the customers and luckily they were ok about this.

So, these 4 orders covered all expenses to create our own production and buy the equipment. After these orders were completed, our margin has increased significantly! Because it was much cheaper to pay for the rent and to pay the salaries, than to pay to the guys in the garage for their services.

I have another nice reading for you where I describe in more detail how my company survived in the crisis before we started our own production. We learned a few important business lessons, and all of them are described in this blog post:
How my business survived in crisis

I hope it was helpful. Have a great day and see you soon!