4 Options To Start A Business With No Bank Loan

An inability to access finance kills off many great business ideas before they even get off the ground. It doesn't matter how great the idea might be, how original the concept is, or how many potential customers might buy your product or service - if you can't put together the money to get started, it is never going to happen. That is a major problem for freelancers and for people trying to leave the world of employment to set up on their own for the very first time. 

The first port of call for anyone looking for a business loan is a bank, but traditional banks aren't always very helpful. If you have no track record in business and, therefore, no way of demonstrating that your business can turn a profit, they are disinclined to lend. They are even less likely to lend if you have had personal issues with cash or credit in the past. You might have the best new business idea anyone's ever heard, but if you defaulted on a credit card three years ago, a bank almost certainly wouldn't give you the money you need to turn that idea into a reality. It sounds crazy, but it is true. 

Perhaps we’re being too hard on banks. After all, if a friend came to you asking for a $1000 loan on the basis that they might be able to pay it all back to you next year if their idea works out, would you give it to them? Lending for a new business is, from a bank’s point of view, like playing UK Online Slots. Most of the money that a player bets on an online slots game is lost. Occasionally you will get lucky and land a winner - and the winnings might even be far greater than the losses - but there is no way of knowing how the bet will turn out until you have placed it. If banks operated like online slots websites, they would all be out of business. They’re usually against high-risk lending, and that’s why it might serve both you and them better to look at an alternative means of financing your business - an alternative means like one of the options we’re about to outline below! 

1. Peer To Peer Lending 

This P2P route still involves borrowing money, but it cuts banks out of the deal. Peer to peer lending is a process that connects people wanting to borrow money with people - or perhaps even groups of people - who are in a position to lend it. Typically these people will be involved in or have an interest in the industry you’re looking to do business in, and so they are likely to have a better understanding of your business model than a bank would. 

Typically speaking, a peer to peer business loan comes with lower rates of interest than a bank loan. They're also open to people who've had credit difficulties in the past - although if you've had credit issues, you can expect your initial interest rate to be a little higher because of it. Go through a reputable broker rather than straight to an individual for your own protection, but there's no reason not to at least give this option a look. 

2. Crowdfunding 

Not every business or business model is suited to this method, but if yours is, this might be the easiest way to get your idea off the ground. Rather than approaching one company or one person for a large loan, you can take small amounts of money from hundreds - if not thousands - of people. The nature of your product or service is of vital importance here because it will have to be something people genuinely want and need for them to be motivated to contribute, but if you can spark their imagination, you might find that the public is more generous than you ever imagined. 

While this method would have been unthinkable a decade ago, it’s become increasingly common during the past five years and is likely to be more common in the years to come. Just remember that you’ll have to ‘reward’ your investors in some way, whether that means a free product or service in return for their investment or a longer-term share in your new company. 

3. Grants 

There might be a grant scheme available to people opening businesses within your chosen sector - and you might not even know it exists. In fact, it's more likely than there is a grant scheme available than there isn't - there are grants and similar programs available for almost every type of business imaginable. Finding the right one might take time, but it's time worth investing. 

Grants generally come from governments, and governments are keen to help small businesses get off the ground because they're the employers of the future. There will be paperwork to fill in, and you might be in for a long wait, but waiting until the money is secure and in place is often better than diving in with borrowed money and being under pressure to make repayments immediately. If you're unsure of where to look, make an appointment with a citizens' advice bureau or a similar service to assist you. 

4. Mortgaged Equity 

We imagine that part of the reason you’re interested in setting up a business alone is that you want to be your own boss. Because of that, bringing in a partner might not appeal to you - especially a silent partner who will take a percentage of your earnings, but won’t be doing any work after their initial investment. You might be able to raise the money you need by, for example, selling 20% of your business to a future investor, but you may not be comfortable with losing 20% of your ownership before you’ve even opened your doors. 

The way around this is to mortgage your equity. You could get the money you need by offering an investor ten, twenty, thirty, or whatever percentage of the company you need to sell to bring money in, and then agree on a deal where you buy them back out of the company over time. It is a form of lending, but there is usually no interest charged as part of the deal because the silent partner is taking a percentage share of profits. You would need to find the right investor to agree to this deal - but they are out there, and the only thing you lose by looking is time. 

Keep Company Costs Low

Other than all of the above, keep your costs low. Start from your bedroom if you can. Don’t hire anyone until you physically can’t keep up with orders on your own. Do as much as you can online and keep overheads low that way. Getting a new business through its first twelve months will be one of the hardest things you have ever done - but it’s possible, and you can do it!

How to Start a Canadian Business: A Brief Guide

Almost 98% of Canadian companies are small businesses, employing up to 88.5% of the workforce. 

But when it comes to launching your company in Canada, where do you start? 

If you're wondering how to start a company in Canada, keep reading. In this brief biz guide, we'll give you the essential tips to get your Canadian business up and running in no time. 

Choose Your Business Form 

If you want to own a business in Canada, you have three options: purchasing a business that already exists, starting your own business, or buying the rights to a franchise. 

Starting your own business gives you the most freedom to shape your company the way you want it, but it takes the most work. Buying an existing business lets you rely on the company's past success but gives you less freedom. 

Buying a franchise has the least risk because the business plan has already been proven successful. (In fact, with a franchise, most of the business planning has already been done for you.) However, you'll have even less freedom to adapt your business. 

Each of these types of Canadian companies has its pros and cons, so carefully consider which one is right for your company. 

Draw Up Your Business Plan 

Your business plan includes all the details that you need to know to successfully launch your business. You'll need to account for logistics such as: 

• What costs you will incur 

• What returns you will get 

• How to source and develop your product 

• Your target market 

• Your marketing strategies 

• Your business goals and how to meet them 

Creating a business plan can feel tedious when you are eager to launch your Canadian small business. However, a business plan is the foundation of your company, and without it, you risk building a business that will collapse later. 

With many popular business plan models out there, you'll be able to find one that makes it easy for you to define your logistics easily without getting bogged down. 

Register Your Business 

Each province has its own system of business registration. Since these systems can differ slightly from one another, you'll want to get familiar with the business registry system in your province. 

For instance, Ontario uses a dual system of numbered and named businesses. Before approaching the registry board, you'll need a better understanding of how this system works and which option you'll want to choose. 

Check Municipal Requirements 

Some cities require you to get a municipal license in addition to your provincial registration. Check your municipality's business bylaws to see if your city requires this step. 

You will also need to check your city's zoning laws to make sure your business's location falls within the commercial zones. 

Register for Business Taxes 

Finally, be sure to register your business for a taxation account with the Canada Revenue Agency. This allows you to pay the correct tax amount on all the sales you make. 

Check the Canada Revenue Agency's requirements to see which taxes your business is required to register for. 

Start Your Canadian Business 

Are you intimidated by your ambition of opening a Canadian business? Starting a business in Canada isn't as complicated as you might think. 

With this Canada business guide, you'll be able to navigate the practical challenges and legal hurdles so that you can start the small business of your dreams. 

Was this article on Canadian business building helpful? Then don't forget to check out the rest of our company blog, where you'll find more tips on business, startups, and budgeting in Canada and beyond.

Top 10 Reasons Startups Fail

The infographic below on the top ten reasons startups fail is brought to you by Wrike agile project management software free programs to help your business succeed:

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How To Grow A Business Online In Just 30 Days

A recent study revealed that on average, humans will spend about a quarter of their lives online. That's equal to about 100 days online for an entire year. 

So much of our lives exist on the internet. We watch movies and TV online, some of us do school and work online, and we can pretty much purchase everything we need on the internet. 

So it's only natural for you to start your new business online. If you're wondering how to grow a business online, you've come to the right place. Keep reading to hear our tips on how to launch an online company in just 30 days! 

Set Goals For Your Business 

The first thing you'll want to do to set up your online business is to outline some plans and write down your goals. What are some of the ideas you have for your business? You should make a list of easy business ideas and then decide which one you think you can get up and running in 30 days. 

You'll want to create a business plan so that you can be as successful as possible in a short amount of time. In this business plan make sure to outline what your goals are and how you'll go about accomplishing them. 

Don't forget about your business' name. Choosing the right name is crucial because it's the first thing someone will come across. Make it something that represents what your business stands for and what makes you unique. 

Set A Budget 

While you might have some clear goals and ambitions in mind, it's crucial to figure out what starting and growing your business will cost and the budget that will work best for your current financial situation. 

Setting some financial goals is crucial to growing a successful business and you'll want to have a clear picture of how much it will take to start your business and how much you'll need to continue running it. At this stage you'll also want to do research on how much you'll need to charge for services and/or products, you want to make a profit but also make sure your customers are getting their money's worth. 

Don't forget about other expenses you might have as well. Will you have any employees you'll need to pay? You can create check stubs for them to keep track of what they're paid. 

You'll most likely have to make some room in your budget for purchasing a domain for your online business and a company email if you want to keep all of your work emails in one place. 

Design Your Website 

If you want to know how to start a business fast then you need to learn everything it takes to design your website. You can't grow a business online without a killer website. 

First, you want to find the perfect logo. There are plenty of online templates but make sure to give it the personality it needs to represent your company. 

Writing the web copy for your website is one of the most important steps to growing your business. You'll be able to customize fonts and website layouts as you write your web copy. Writing out what your business is all about and what you sell is crucial because it's the best way to gain new customers. 

It's also important to keep in mind that your website should be accessible on mobile devices. Most people do their shopping on their phones and if your website isn't optimized to be used on mobile phones then it's likely you'll lose valuable customers. 

Find Your Customers 

If you want to know how to grow a small business it's important to find your target customers. You'll want to research the kind of people who are interested in what you're selling and are able to afford it. It's also important to know why people are looking to buy your products or services, that way you'll know how to market to future customers. 

Email Marketing Is A Must 

Once you know who your target group of customers is, you'll have to find the best ways to reach out to them. This is where email marketing comes into play. 

Email is still a major means of communication, so creating a list of people to send marketing emails to is very important. You can try sending out marketing emails for major holidays or to customers who've done business with you before, offering more of your great service and products. 

One way to get new customers to sign up for your marketing emails is by offering them some coupons or free consultations. You can then set up autoresponders to send out to all those potential customers who've signed up to receive emails. These automatic emails can include some advice or answers to some common questions about your business. 

Use Social Media to Grow Your Business 

Social media is a powerful tool for communication. If you know how to use it well it can be a great tool to grow a following and gain new customers to help grow your business online. 

There are a ton of social media apps out there these days but you'll want to take advantage of the ones that work best for your business. Use your social media to promote your business and your services but also include links to your social media on your website and in your marketing emails. 

Content For The Win 

One of the best small business tricks and tips would be to dive into content marketing. Creating content for your business will show potential customers that you're an expert in your type of business and are the best company to look to for those specific products and services. The type of content you use will depend on what works best for your type of business but you can use everything from videos and podcasts to blogs and infographics. 

Don't forget how crucial SEO can be. When the content you write ends up on the first page of a search, more people will engage with your website and eventually become a paying customer. Create your content to please visitors AND search engine crawlers.

The Best Advice On How To Grow A Business Online 

If you're wondering how to grow a business online follow the tips listed above and you'll have a successful business in no time. Make sure to check out some of our other business blog posts to learn more about launching an online company successfully!

How to Start a Business With No Money

Do you have a great idea for a new business? Are you unsure how to start a business with no money or financing options?

This is an all-too-common dilemma for entrepreneurs with frugal budgets. You have confidence in your idea, but not enough money to get the business off the ground.

Thankfully, it's possible to start a business with little or no funding. Continue reading to discover seven essential ways to start a business with no money.


1. No Substitute for Hard Work

In the beginning, you're going to have to get in the mud and get dirty. You will probably wear a lot of different hats to grow your business while your team is in its infancy. In fact, your company might be like many others that start with a team of one - you.

Starting a company isn't as glamorous as it's often portrayed. Mark Cuban is a perfect example of this fact. He's a famous billionaire now, but his journey into business started in a run-down apartment, where he worked tirelessly to get his business off the ground.

Cuban didn't take a vacation for seven years while he taught himself to code and worked with a partner to create Audionet. They ultimately changed the name to Broadcast.com and sold the company to Yahoo for $5.7 billion.

Cuban's example teaches us the importance of sweat equity. Do as much as you can in the beginning. Make sales calls. Attend networking events. Learn how to do all the functions your business will require.

It's hard work but if it were easy, everyone would be doing it.


2. Keep Your Job

Resist the temptation to ditch your job to work on your business full time. Instead, use your job as a fund to start your company.

Starting a new business inherently comes with taking calculated risks. If you don't have a steady income, you won't be in a position to take risks. As the saying goes, you need money in order to make money.

As hard as it may be to balance your job and business, doing so will help you scale your business faster and allow you the flexibility to try new things.

Take the time to build a solid foundation before you become a full-time business owner. With proper systems and sales processes, it will be easier to grow your team and expand responsibly when the time is right.


3. Perform Services to Generate Capital

Product-based businesses usually require significant income to launch. Research and development of your products is a time-consuming and expensive process.

And even if you go with an existing product, you may have to buy in large quantities in order to get a lower price that is necessary to create a profit margin.

A good solution to this problem is to perform a service as a means of generating startup capital. 

Services require little to no money to start. You provide the service, and then you collect the payment.

For example, let's say you want to develop web design software. You can perform web design for various business to generate cash flow for the development of your software program. Then once the product is complete, you can even market it to these same clients.


4. Seek Small Business Grants and Loans

Be careful about acquiring debt in the beginning. But if you are making sales and need money to grow, a small business loan may be right for you.

Surprisingly, traditional banks usually provide more favorable terms, while online banks are typically easier to meet qualification requirements. Of course, you will want to pay attention to the interest rates so you can pay off your debt quickly. Good credit is usually required although it is possible to secure a business loan with bad credit.

Securing a grant is even better than small business loans. The Small Business Administration (SBA) provides federal grants to help small businesses launch and grow. Contact the SBA to see if you qualify for small business loans.

Even if you do not meet the criteria for a grant, the SBA may match you with funding programs that can help you get your business off the ground.


5. Use Crowdfunding

Crowdfunding is an increasingly popular platform for entrepreneurs to get capital for their business idea. No matter the business venture, popular sites like Kickstarter and Indiegogo are funding new businesses like yours every day.

These businesses allow the public to make small investments of money in a company. In return, the investor usually receives "one-of-a-kind experiences, limited editions, or copies of the creative work being produced," according to Kickstarter.

There is a science to running a successful crowdsourcing campaign. Do your research and consult with those who have successfully launched a business on Kickstarter before you draw up your offer.


6. Apply for an Incubator

Business incubators are an excellent resource for entrepreneurs with a good idea and a solid business plan. You can apply for these programs and receive helpful assistance upon acceptance. Incubators are known for providing services to startups such as office space and management training.

Most incubators work in conjunction with local and regional economic development organizations. Other incubation programs are financially sponsored by universities. Many startup incubators are in the Silicon Valley area but there are a growing number of them in Boston, New York City, San Francisco, Austin, and Seattle as well.


7. Run a Preview Test

Making a preview offer to prospective customers is a great idea to raise money while validating your business idea.

For example, you can offer a  trial or a slimmed-down beta version of your product at a lower price. Customers benefit from "getting in early" for a good price. And it gives you the chance to gauge the viability of your offer and if there is a market for it. This is called building an MVP (minimum viable product) and it is one of the most inexpensive yet effective ways to get your business funded faster.

A successful pilot test will give you the funds and confidence to take your venture to the next level. It also allows you to get an accurate picture of your sales process. You can identify where your process excels and where it needs work.


How to Start a Business With No Money: The Bottom Line

Starting a business seems expensive and difficult at the beginning. But, as you can see, plenty of options exist to help you fund your business and many ways of staying motivated as a business professional. 

Successful businesses solve problems for their customers. They also solve problems within their business by overcoming obstacles. The first obstacle for most entrepreneurs is how to start a business with no money.

Don't let money keep you from making your business a reality. Look at it as a chance to overcome an obstacle and start your company. Use the above tips to take the next steps now.