If you’re a part of the startup world, you’re probably familiar with the term “sweat equity.” This is the non-financial investment that you make in launching your business and it’s a critical ingredient in the recipe for success no matter what you’re doing.
Unfortunately, sweat equity doesn’t get your products made or pay for expert advice. If you’ve put in the long hours of hard work and you’re ready to take the next step but you’re strapped for cash it might be tempting to start selling portions of your business to get funding. Getting venture capital can certainly have it’s benefits, but you might want to consider your other options before taking that leap.
Here are three tips for you to launch your startup when you’re strapped for cash.
Networking is a critical skill for business people to possess and even more important for entrepreneurs. When you’re launching a startup and you’re strapped for cash the best thing you can do to get your project off the ground is to build relationships with others and form connections through networking in the space that you’re hoping to enter.
You need to be active in the entrepreneurial ecosystem from day one. By doing this you’re not only getting valuable brand awareness for your startup, but also meeting a ton of people that could potentially help get you traction organically.
Approach networking like everything else in business – with a strategy. Identify the crucial things that you need in order launch your startup. For some, this will be funding, others might need connections with merchants, suppliers, distributors, and still others might need to find expertise and form partnerships with experts in their field.
Whatever your specific needs are, identify them and begin looking for opportunities to meet the people who can help you. A quick Google search for networking events in your area should give you a good place to start. Look around for the events that would logically be places where the connections you need might hang out. Do your research on the members of events, clubs and organizations so that you know who you’ll want to look out for when you go.
Once you have a good idea of the places and people you should be involved with, consider the approach. Nobody is going to want to help you if you just go around asking for it. You’ll need to create an interest in what you’re doing before soliciting any effort from your connections. Have your “pitch” ready, but first become a familiar face at networking events and get to know the people around you.
According to Mike Clum, the founder of a Facebook advertising agency, a good place to look for events besides Google is your local chamber of commerce. Most chamber websites have a lot of information that you can use to plan and research the different people and opportunities in your community.
The important thing here is that when you’re strapped for cash networking is one of the most valuable ways for you to launch your startup. All it takes is some time and personality if you have a good idea. So get out there and start meeting people.
- Look for services that offer account management.
If you’re launching a startup with some cash and looking for the best places to invest that money for marketing this tip will come in handy. According to Deep Patel, the founder of Owlmetrics, a lot of services that require a specific skill set to be successful will offer an account manager when you’re spending above a certain threshold.
AdRoll, a prospecting and retargeting solution for marketing your business, for example, gives the customers who spend above $5,000 an account manager who essentially does the work for you. Some solutions will set higher thresholds (like AdRoll) but the value you get, especially if you’re team is small, is huge.
With an account manager you’re essentially adding an extra employee to your team. This person will typically be available to you during business hours and help answer questions, implement your plans, and build solutions with your goals in mind.
If you’re really low on cash or don’t particularly need another person working for you in a specific vertical you still have some options.
Consider paying an expert to consult with you on your ideas. This will help give you clarity and direction but without the additional cost of implementation that comes with an account manager. Check out sites like clarity.fm for quick and accurate professional guidance at a low cost.
No matter what route you take, it’s always good to have an expert at your disposal to help keep the wheels turning. You have options whether you have the money to spend and get yourself an expert to implement and consult or you want to save some dough and stick with just the consultation for now.
- Use crowdfunding to get traction.
“In the world of startups proof of concept is something that everyone should seek to establish before investing any substantial money into a project,” says John Rampton, the founder of Due and Calendar. This is good news for you. The very nature of this need implies that you should be able to satisfy it when you’re strapped for cash.
If you’ve put the time and planning into your product or service and you’ve established all the details of what you’re offering but still need the cash to take the next step, crowdfunding could be your answer.
Crowdfunding campaigns are established for well thought out startups and products so that they can on the premise that the owners need the funding to begin production and allow you to pre-sell your products and establish funding goals.
People can place orders for what you’re offering and if your funding goal is met you then will be able to startup production and fill orders shortly after. But executing a successful crowdfunding campaign isn’t as easy as it sounds. You’ll need to put a lot of effort into raising awareness of your campaign and getting the word out in every way you can. It’s always a good idea to consult with a marketing expert before launching one of these campaigns.