Starting a business doesn’t always have to involve getting a loan. The following entrepreneurs have done it without the need for business startup loans. You will get the “Are you kidding me?” reaction also.
1. Making Chuck Norris Famous (Again)
Five years ago I accidentally made Chuck Norris famous again through a comedy website I started. I began to receive offers from publishers to produce a book inspired by the site. Over the years, one book turned into two and two turned into three.
I started calling some friends and bouncing ideas around for a new product. I figured that I could leverage the large audience I had from “Chuck” to create something actually practical and useful.
I started to build up a fun little mobile service which has thus far been funded primarily from incoming book royalties. I do not recommend attempting to do this because old-school publishing is not exactly the best place to try and make a killing right now. The entire company was planned out from the start to be lean — spend a little, deliver a lot, keep overhead low and user expectations high — and after over two years of work, we’re finally getting ready to launch. I would have never thought in a million years I’d be developing a company around a mobile app, but I’m glad it worked out the way it did. …at least for now.
Ian Spector, http://ianjspector.com
2. Interest, Not Equity
I raised money for my first business from business associates, rather than family, because the former viewed me differently. They saw me in a business light, rather than as a grown up kid.
To get money from former clients, it simply had to make sense. I had sold for my former employer, made a fraction of the gross, and could show them what I made. They understood the business and could do the math. The business plan supported a quarterly payout from a promissory note with their principle, and 50% interest, back in a year. I was also lucky and first sold a well connected business associate on receiving an extra $5,000 for investing and finding the rest of the money I needed.
If you have to approach family I recommend setting up dedicated time, presenting the business and the need, and then asking them if they KNOW anybody that might be interested in a guaranteed 50% return. If they’re interested they will ask questions or call back later.
Then have a two page executive summary and a one page promissory note for principle and 50% interest, to be paid as a lump sum in a year. If you’re not willing to do this you don’t believe enough in your business or yourself. People will fund based on their confidence in you and won’t care about the business model so much, which is a good thing, since they are probably unqualified to judge it.
Brian Calsyn, http://www.onlinemarketingintel.com
3. Goodbye Chevelle
In 2007 I sold my 1968 Chevelle to fund the start-up of my business, Public Health Group. I saved for a long time to buy that car and it was a real beauty. It broke my heart to sell. However, I knew I needed those funds for my business. Money from the sale was used to hire my first employee and purchase office equipment.
Now, more than 3 years later, my business is going strong and continues to grow. Thanks to my beloved Chevelle, I’ve been able to hire more staff and move into a larger office space. My hope is that one day everything will come full circle, and I’ll be able to buy another 1968 Chevelle with the money generated from my business. Thanks again Chevelle!
Peter Costa, www.phgworldwide.com
4. Other People’s Money
We raised our launch money through crowdfunding (whereby a large group of people help fund a business through a cluster of small donations). Ironically, we used the funds to START a crowdfunding website for entrepreneurs so they can raise the seed capital they need to launch their ventures.
Since the financial barrier to becoming an entrepreneur has been lowered by technology, there are more lean start-ups that can take advantage of innovative funding approaches such as this. We also found that by just starting our venture in some form – not waiting for it to be fully funded and perfect – that it helped us to begin to also generate the cash we needed to operate.
Sally Outlaw, http://peerbackers.com
5. Hey Media, Let’s Partner Up
Most funding will go to operations and advertising. One way to reduce the risk and cost of launching a new consumer product is to get TV stations to run your ads for free. That’s exactly what I did when he launched Drive & Grow Rich Inc. I has sold over 1 million worth of product and services without paying a cent for advertising.
I call this secret formula “joint venturing” with the media. Every media outlet has some unsold airtime. Instead of taking a loss on it, they give it to me in exchange for a split of the sales.
Because the products are attractive to a broad demographic, his media partners run the Drive & Grow Rich advertisements at every opportunity. His 30- and 60-second ads run more than 1,000 times a day on radio and TV. Media companies have literally funded his startup and growth. I have used more than $5 million worth of media in two years and never paid for any of it out-of-pocket.
Robert Smith, http://www.driveandgrowrich.net
6. Rock For Charity
My goal was to create a Grand Opening event that would draw a lot of media attention without spending much, if any, money. My new company provided music lessons to children. So I reached out to a local children’s charity and offered to host a fund-raising concert for them. I reached out to local musicians and asked them to play for the fund-raiser/grand opening. When both agreed, I secured a venue and started sending out press releases.
I hosted the concert at the local venue and 75% of the profits went to the charity. The charity promoted the event to its supporters. The venue posted it on their upcoming events and the band listed it on their website. The band played for free because it was for charity and the local venue gave me a lesser rental fee because it was benefiting the charity. I took 25% of the door and as good as that was, I got exposure for my new business among the media and people who attended the concert at no marketing cost to me.
Stacey Marmolejo, www.SchoolofRock.com/stpaul
7. Grant Me Some Funds
I launched my company, Inspired by Savannah LLC, with the help of the Huggies Mom Inspired Grant Program. I was awarded $15,000, which I have used as start up cost for my business. By receiving this grant, I have been able to take an idea and make it a reality. Without the help of Huggies and their program geared towards mothers, I don’t think I would have taken the next step. There are many grant opportunities out there for entrepreneurs/inventors/teens/mom/etc., you just have to look for them.
The Huggies® MomInspired™ Grant Program awards up to $15,000 in seed money, in addition to providing winners with business resources to further the development of their original product ideas and startup businesses. Available grants range from $1,000, $5,000, $10,000 and $15,000 based on the applicant’s business needs and goals, and if offered two times a year. Those interested in applying can find out more by visiting: Huggiesmominspired.com.
Robin McCoy, www.SoothEaze.com
8. Compete For It!
Bennu raised over $40,000 by participating in business plan competition, including the Rice University Business Plan Competition, which FORTUNE magazine called “the World Series and Superbowl for student entrepreneurs.” Not only do business plan competitions offer young entrepreneurs an alternative funding platform, but also they provide several complementary benefits.
One, competitions force you to write a detailed business plan, which statistically increases the likelihood of your venture’s success. Two, competitions build camaraderie and chemistry among the startup team. Three, competitions expose you to mentors and judges who share invaluable feedback – and may eventually invest in your company. Many competitions are only accessible to young entrepreneurs, so I’d recommend taking advantage of the opportunity while you’re eligible.
Ashok Kamal, www.bennuworld.com
9. Comics For Sale
We’re currently in the process raising money to fund our new “Societal” Networking site, ReunitedWeStand.com, a site where you can discuss important topics like politics, religion, environment, foreign policy etc. It costs big money to realize big dreams, and sometimes you have to get a little creative in order to do that.
My father has been an avid comic book reader and collector for years. So much so that we have a whole room of our house dedicated to boxes upon boxes of them. We’re finally categorizing, scanning and selling this treasured collection of comics through online sites. Together with other various collectibles in the house (old books, antiques, toys, sports memorabilia etc.) you can be amazed at how much you can make by selling stuff you have stored in closets and under your bed.
Even freebies you get at events or school or whatnot may be collectibles to someone, somewhere. Even if you only get a couple dollars for the item, you got it for free… so that’s 200% profit! Wow!
Adrienne Denaro, www.ReunitedWeStand.com
10. Out With The Old, In With The New
My life as a young entrepreneur has had many ups and downs yet with these flows comes creativity, especially creativity on how to fund these entrepreneurial ideas. The most successful of these funding ventures was actually quite simple.
I told all of my family my goals and that I needed to make some money so I offered to clean out all of the stuff they no longer wanted especially from their basements. All of this stuff eventually wound up at my apartment, which wound up looking like a yearlong indoor yard sale, as I had stuff everywhere! The most money gained from items was old toys, sporting equipment, books, and kitchen stuff sold on eBay and craigslist.
Although, this raising of funds is not the most conventional it worked for me and I am now the proud founder of three startups with one sold for profit and behind me. The sold asset was called ChiTown Deals and is a “Deal a Day” website similar to groupon.
Social Tech Pop and Mix Media Solutions LLC. are my current endeavors keeping me very busy. SocialTechPop.com is a premiere popular culture and technology blog with a vision that it isn’t enough to recognize that technology exists and impacts our daily lives but detects, uncovers and explores the fabrics that tie our society together in this emerging digital age. Mix Media Solutions is a media house that is digitally enriched with the main purpose to create rich content. I wish the best of success to all of you.
Jessica Loren, www.socialtechpop.com
11. Donate Button
I applied to be a speaker at the 2009 CEO Annual Conference. After being accepted to present “Social Media Strategies to Position Yourself as an Expert” the realization hit me that this was a great opportunity but not a paid speaking engagement.
In order for me to travel from Georgia to Illinois to participate in this conference I knew I needed to raise close to $1,000.00 in order to cover all of my expenses.
I had the choice in front of me that we all face each and every day of our lives. Pass on a great opportunity or find a way to allow others to help us achieve the dream.
I raised the money by using a Pay Pal donate button and by texting people in my network to remind them to donate.
Derrick Hayes, www.DerrickHayes.com
12. Refund Me Please
The inspiration for the post came from a story I heard about Andrew Warner, who hosts interviews with entrepreneurs over at Mixergy. To get startup capital for his first startup, he refunded his old J-Crew sweaters he brought over the years. The startup went on to do $38 million in yearly revenue. Not a bad return on investment.
Andrew Warner, www.mixergy.com
So which one was your favorite?
[Image credit: deVos]