Don’t stop dreaming, but temper your dreams with a dose of reality. Your lack of capital in itself needn’t defeat you, but combined with bad credit, it’s a red flag warning potential investors not to risk their money with you.

You obviously have a lot of enthusiasm, but you need to spend some time getting your personal financial house in order and rebuilding your credit. While doing this, think hard about what type of business you’re interested in starting. If you have a specific industry in mind, perhaps you can start learning the ropes by working in someone else’s business to gain experience—either fulltime, or on the side

Don’t have an industry in mind? There’s never been a better time to start a business with little capital. The internet has opened a world of opportunities for selling products online. EBay and Shopster are two good ways to get started. Try searching for “weekend entrepreneur” or “part-time entrepreneur” to get ideas for businesses you can start on the side; these generally require little cash.

As you improve your credit, more opportunities will open to you. Don’t get discouraged—every step you take toward starting your business, no matter how small, is a step in the right direction.