So you say you don’t have enough money to start a business. Bull! Starting a business isn’t all about money; it’s also about ingenuity, innovation, and raw passion. In fact, Jim Collins, the author of Good to Great, studied hundreds of companies and identified the leap to success required these intangibles over anything else.
Many of the biggest, strongest companies were launched in garages with just pocket change—Amazon and Cliff Bar, for example. Yet Silicon Valley is littered with multi-million dollar dot.com start-ups that went belly up before they earned one penny of profit. Founded in 1994, Amazon didn’t launch with crazy amounts of cash. Instead its Founder Jeff Bezos started Amazon in his parent’s garage. Slowly he grew the business and brought it online, ultimately raising a mere $40K to make the first version of the website you see today. In 2008 Amazon posted $19.2B in revenue—not bad for having its HQ in a garage only 14 years prior.
Having limited resources can be a huge advantage in business. Success requires ingenuity, perseverance, and gratitude, which is not often required of silver spoon entrepreneurs. Put one person with only $100 to invest and another with plenty of backing up against each other in a battle of start-ups, and my money’s on the underdog. The reason is without money you can’t afford mistakes (not many anyway). When you have less you do more with it, whether it is toilet paper or cash.
Having less forces you to use your mind
Financial limitations force you to think outside of the box to come up with creative solutions to problems. A person with lots of dough is more likely to throw money at a problem, rather than think his or her way out of it, missing a golden opportunity for growth and invention. I now use a strategy for advertising based on the “having less model.” I regularly troll the yellow pages ads (that I can’t/don’t want to afford), and see if any of my competitors went out of business. If they have, and their number is disconnected, I get the number and redirect it to me. They paid for the ad (prior to closing their doors), and I benefit from the customers.
Having less helps you stand out
It’s much harder to follow the status quo without money—and that’s a good thing. Do you really want to bust your butt to keep up with the guy down the street when you could be blazing a new trail?
People with capital often spend a lot of money trying to look like everyone else, and when that doesn’t work they spend even more money trying to be unique. There is a reason so many clothing trends come out of urban areas—many of these individuals are doing more with less. They are bucking the status quo, with the intention of being different for less. Hush Puppies brand took off in 1994, after almost being closed down, because young people in urban areas were buying them up at small discount stores. Then the rich folks tried to copy them and bought them by the case.
Having less inspires you to be resourceful
When you have limited resources you make better use of them. You’re smarter about it, able to strategize how you could make the most of what you have and get more of what you need for next to nothing. Most people think it’s not possible, but you know better.
Whether you need office furniture, plane tickets, or a staff, inspired use of resources can help you get what you need. Trade, entice, scavenge, you’ll do whatever you have to do to get what you need, besides pay for it. For example, when I am not willing to pay expensive legal fees associated with a business startup, I have to get creative. So, in the case of legal counsel, I go to my local college and seek out the legal professors. Sure enough, they regularly offer free legal services (think contracts, NDA and the like) in exchange for being a case study for a class there are teaching. Now that is doing more with less.
Having less enables you to use less—even when you have more
So many businesses tank because the moment the money starts rolling in, the founders go on a spending spree, loading up on office supplies like they’re stocking a bunker. All of sudden they’re paying retail, signing expensive office leases, and the worst of the worst: hiring unnecessary staff at high salaries.
Despite the fact that I sold two companies for millions, my ass is still sitting on a used office chair I got for free. (What? It’s not smelly or anything!) Accustomed to working with less, I still operate my business with the attitude that I’m not made of money. And that means my bottom line is healthier than most.
I’m not saying the homeless dude in the park is better equipped than a guy with angel financing. But if you’re living in your mom’s basement, you’ve got a chance of making it. Or simply upgrade to the garage, like Amazon did, and make billions.
Bio: Mike Michalowicz launched 3 multi-million dollar companies all before the age of 35 and is the Author of The Toilet Paper Entrepreneur. Visit his site: http://www.ToiletPaperEntrepreneur.com