How to Take Action on Business Ideas

Hi, I'm Evan Carmichael. Welcome to a special edition of Ask Evan. Today we're going to talk about how you can take action on your business ideas without having a lot of money. I know it's a common question entrepreneurs have, so we're going to answer it here today in this video. Today's video is brought to you by Telus Talks Business. They have a social media contest that they have put on where you can win some cool prizes from Samsung. You can go check it out on this website here at the top. And basically, if you tweet out any of their tweets from their major Twitter account, which is @telusbusiness here, with the hashtag #social4biz, you can win a whole bunch of different Samsung Galaxy prizes. So hopefully it's cool, you'll check it out. And so thank you, Telus, for sponsoring this video. Today's question comes from one of our readers on our Teles talks business post who wrote in, and I'm going to go find the question for you guys to check out. It's from Teddy. So Teddy wrote in, "Thanks Evan for these encouraging messages that you post to my email. I have great business ideas but lack money to put them into reality. What can I possibly do?" So thanks for the question Teddy. Again, a common question a lot of entrepreneurs have and that really holds them back, and so I'm going to give you a couple tips here to be able to help you get past those hurdles. The first option is to bootstrap, and it's honestly my favorite way to be able to do it. And, and this is coming from a guy who has a background in venture capital and raising capital for entrepreneurs. The best way to start a company is to bootstrap it up. If you are looking for financing, I'll give you some tips later on. But to bootstrap, the best way to do it is to build around the customer. So you go start talking to potential customers, you find out what problems they have, find out what their pain points are, and you offer to build a solution that can help them with those major pain points. Entrepreneurs too often go the other way about it, where they create a product or service and then go out and try to sell it, and often spend a lot of money, time, energy, investment getting this product or service off the ground, and it turns out the customers don't really want it, or they want something that's different. So the best way to be able to do it without losing a lot of resources is to go and start talking to actual customers and find out what their problems are and offer to help them. See if they're willing to pay you to do it, and if they are, you've started a business and you have cash coming in. That's the, the best way to ensure that you can get beyond the survival stage. The next thing you can do to help bootstrap is start with a service. Services are low-cost. You don't have to invest a lot of money to get a service business off the ground, and it gets you close to your customers. You get to understand their needs better. You're working more intimately with them. And you build cash flow. So you have money coming into your company that if your bigger vision is to be able to build a product that you can better leverage than a service, then a good way to start is still with the service because you get to know your customers better, figure out what their true problems are, and then again build a product around their needs that you can then leverage to go to other customers. And while you're building your product company, you still have cash flow from your service business to be be able to support yourself. Now if you don't want to bootstrap and you really want to go out and get financing, a couple ways to do it. Depends on how much money you're trying to raise. The first one that most people think about are banks. The challenge with banks is that you need to have really good personal credit. You often need to give that personal guarantee unless you've been in business for usually 3 years. They want to see that you're going to personally guarantee. So really it doesn't matter too much what your business is is going to be about. They want to hold on to an asset just in case you don't deliver. So they could take your house or other assets that you own. So typically it's not really a great source of startup capital for entrepreneurs. It's more for people who are already in business and have a proven case and are looking for money to expand. The next source you can look at is love money, and that's friends and family. It's usually a little bit of money, you know, in the low thousands of dollars. And you're basically looking at anybody who knows you and likes you and likes the story, wants to be involved. You're going to your friends, family, old kindergarten classmates, old coworkers, whoever you can think of who would be potentially interested in your story. And you got to think long and hard about who you want involved in your company, if they're going to have an active role in your business or not. Do you want Uncle Joe as part of your company or not? Is having dinners with him then going to be awkward because he's also an investor in your company? And you also want to think about, is there any issues with him joining the company? So sometimes the people who invest in the business are also going to want to have some kind of management role with the company. So do you want him to take an active role in the business or not? So that, that'll be something that is determined as you start talking to people, but it's something that you probably want to think about before you actually go out and start asking for money. The next group would be angel investors, and these are wealthy individuals, often business owners or dentists or doctors, and they have made some money and are looking to make some investments. And typically here, you know, they have various degrees of sophistication. Some of them have only invested in the stock market, and others have actually done investments in business before, and it really ranges. So you may have a really sophisticated investor who really understands the ins and outs of angel investing, and you may get somebody who's never done it before but has money to spend. So you've got to set expectations, and you're going to come across a lot of different potential types. So, you know, I guess be a little wary and make sure that you get your structure done up properly. If you're looking for an angel investor, you want to make sure they bring you more than just money. You want to make sure they're going to give you some kind of contacts and connections and will help get you more customers and partnerships and media. So you definitely want somebody who's more than just a check. You want someone who's going to try to help your business, maybe not as an active management role, but actually, you know, does something to be able to help build your business and has some contacts that can shortcut your success a little bit more. And in terms of finding them, most people don't put up on a website and say, hey, I'm an angel investor, because they get— they they'll get bombarded with, with ads for people who are trying to submit their, their business plans. So most angel deals will happen through informal networks. So you're talking to people who know people who know people, and a lot of times it happens through lawyers and accountants because they're dealing with various business owners and investors on a regular basis. So you definitely want to start putting the word out saying you're looking for an angel investor, here's my business concept, and and, you know, pick one. You said you had many ideas. Pick the one that you think gives you the best chance of success and start trying to connect, especially with lawyers and accountants, to let them know what you're doing and what you're looking for. Now, you know, one, one final word, I guess, and there's a lot of people who feel like they are trying to start a business but they can't go because they don't have a lot of money. Don't let it be an excuse for you not to get started. Too many people use that as a crutch to say, "Oh, I don't have any money, so I can't start a business." You don't need money to start a business. You don't need a lot of resources to start a business. You just need to be resourceful. So a lot of the most successful entrepreneurs in the world started with nothing. And they, you know, they scrapped around and they were extremely resourceful and they used what they had to be able to start a small company and then build it up and build it into a world-recognizable brand name. So again, it's not about how many resources you have, but how resourceful you are with what you do have. And don't let that be an excuse for you not to get started. I hope you guys enjoyed this video and I was able to answer your question. If you do like the video, please give it a thumbs up below. It always encourages me to want to make more of these videos for you guys and lets me know what you think. And I'd also love to hear your feedback. If you want to leave a comment under the video, I'd love to see those. I always read every comment that comes in and I really do appreciate them. And remember, again, this video is brought to you by Telesocks Business, and if you want to enter the challenge Just go check out @telusbusiness on Twitter and you can retweet any of their messages with the hashtag #SocialForBiz and you might win one of the Samsung Galaxy prizes that are being offered. So thank you and we'll see you on the next episode.