A former student is starting into business for herself, in a professional practice. She is finding that banks want a lot of investment on her part (at least 25%), which she doesn't have. So she is going to work out of her parents' basement until she can move into an office. This is great creative thinking! The trick is to get started, any way you can.
I am convinced that anyone who wants to start a business can do so, even if they have no money. I'm not saying you can succeed long-term (that's a whole different question), but if you have an idea for a small business, there are many creative ways to finance your start-up.
1. Start very small. I always say the minimum you need is a place to see customers/clients, a product or service to sell, and a phone. You don't have to have fancy equipment and a gorgeous office; your customers will understand, and you can't get what you can't afford. Find a small place with low rent, then grow slowly.
2. Get a Customer Base. Since you don't have any credit, what you must have to convince the bank that you can make it is: customers. Get them any way you can (legally, of course!). Go to their homes, work out of that little office, barter services. When you can show the bank that you have a steady stream of people coming in regularly, they will be more likely to give you a loan to expand. You will also get testimonials, and these are the most effective, and least expensive, forms of advertising.
3. Use vendor credit. Vendors (table manufacturers, local businesses) are more likely to give you credit than will a bank. For example, go to a supplier for your type of business and set up an account, or go to the local office supply place and ask to buy on account. Buy a little, pay your bills, then buy a little more and always pay your bills. After a while, you can use this vendor credit as another selling point with a bank. And the biggest benefit to vendor or trade credit is that is your business credit, not your personal credit.
Of course, there are many other ways to start small and simple. The most important thing to remember is to get started, any way you can, build up your customers and your credit, and get to a place where a bank can't say no.
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