Starting a Small Business with Very Little Money...SMALL BUSINESS, SMALL MONEY

Certain businesses can accomplish this, others cannot.  It depends upon your model.

THE MIDDLEMAN
The best businesses to open up without capital are those that operate as a middleman in the transaction.  You are matching up a buyer with a seller for a good or service.  You dont have to hold inventory, you don't need the support of employees, you just need to create value by matching buyers with sellers of a good or service...and the rest is sweat capital.

Example:  My friend is a expert at selling other people's junk (old clothes and such) on eBay.  She has no upfront cost, prepares and ships the merchandise when it is sold, collects the money from the buyer and then remits the fair share to her customer a few weeks later.  Result: Positive cash flow, no upfront expenses.

PAY IN ADVANCE
If you've come up with a compelling story and really isn't available today in any shape or form, you can get customers to make deposits or pay in advance (if they trust you) for the service you will be providing or for the product you will be delivering.

Example: Customized or monogrammed clothing, you get the customer to pay a NICE deposit, you purchase the item, then add the customization, and deliver for the balance.  Result: you maintain a positive cash flow without committing to inventory.

SUBSCRIPTIONS
You have a service or product that is delivered on a monthly basis, the customer will pay in advance prior to delivery so that you can maintain a positive cashflow and not have to deliver and wait for your monthly and it occurs every month.

Example: I subscribe to the Dollar Shave Club, each month I pay for my shaving blades with a credit card, then they ship the product to me on a monthly subscription.  Result: more predictable cash flow.

SCARCITY
You have a product that is fairly hot and moves quickly.  You order your merchandise with payments terms (assuming you will get credit from the supplier or factor), then you pitch the product and watch it quickly move from your inventory.  Result:  you collect all of the revenues, then get to pay the supplier with net 30 day terms, positive cash flow.

Pick your flavor, but try to reduce your investment, increase your on-going cash flow and maintain control over your inventory.

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