How much money do you need to start a business?
I recently watched an interesting story on TV about a business in Brooklyn called Ample Hills Creamery. It was founded by a wife and husband who both quit their jobs and went all-in on their unique ice cream shop. Obviously the business is doing well, or they wouldn’t be profiled on TV. But one specific statement in the story stood out to me.
‘The couple invested their whole life savings into the business.’
This is a great line to capture attention. It says that the couple was daring, and brave. It says they risked everything. They were in a must-win situation. All the chips were pushed to the center of the table.
Now the audience has to know what happened next! Bravo, dramatic story teller!
Risking It All
Most people seem to think you have to risk everything you have to launch a new business. Most people don’t have the stomach for such risk (although it appears Americans have no shortage of stomach). So most people never consider entrepreneurship an option. And I don’t blame them. But do you really have to dig into your entire life savings to become your own boss?
I launched my own business in 2016. I had worked in advertising for 2 decades. Then, in 2015, several former clients encouraged me to start my own agency. I began by dabbling with a nights-and-weekends side hustle. I did a little freelance work for my friend Dan Richards at Global Rescue, and earned $16,000. A few months later I launched The Weaponry, my advertising and ideas agency. Global Rescue was our founding client. I opened a business checking and business banking account with Wells Fargo, and put $6000 into the checking account, and $10,000 into the savings account.
My Initial Investment
So how much money did I use to start my business? You could say $16,000, because that’s what I put into my combined bank account at the start. You could say $6000, because that is what I put in the checking account. Either of those answers could be correct. But they would be correct, like saying it takes 3 licks to get to the Tootsie Roll center of a Tootsie Pop.
No Money Down
The truth is that I started my side hustle by investing $0.00 into my adventure. All I needed to get started was my home computer, which I already had at home (hence the name home computer.) I was able to start providing value to others with the things I already owned. I simply needed action to start generating a new stream of income. I then diverted the new stream to form a reservoir. And once the reservoir grew large enough, it became my official pool of money to start my own business.
The Real Costs
To officially launch The Weaponry I spent $120 to establish The Weaponry LLC with my state. That’s all I can remember initially spending on the business. I started by working out of my home office, using my home computer. That cost me nothing.
My first real investments in the business were a dedicated work computer, a MacBook Pro, and an iPhone. It’s amazing how much commerce you can facilitate with just those two resources. And most people already own those two powerful business tools.
Don’t be fooled into thinking you need a lot of money to start your own business. You don’t. It costs almost nothing to birth a business. There are always ways to start small. You can probably go MacGyver-style and create your own business out of things lying around your own home right now (or laying around your own home right now, depending on your grammatical choices and intended meaning).
You’d be amazed by how much you could do with just a single run to the grocery store, or the Home Depot. The cost to get on the entrepreneur-ship is much lower than you think. Even if you ultimately want to do big, capital-intensive things. You don’t have to risk your life savings. You just need to get moving. Follow the Yellow Brick road. And pick up as many of those yellow bricks along the way as you can.
*To find out more of the things I am learning on my entrepreneurial journey, consider subscribing to this blog.