How do I start up a traditionally capital-intensive business with no money?

Entrepreneur, Business Planner and Angel Investor
min read
Opinions expressed by Entrepreneur contributors are their own.
It's good to want things but if you're serious about it, change your attitude. People do manage to do what you want to do, but you have to be more realistic about it. If you don't have the money then you have to start thinking about how to make an attractive offer to people who do have the money, meaning investors, whether VCs or angels.

Don't worry too much about VCs because they want you a lot less than you want them. VCs fund a few thousand businesses per year at most, and they don't want many retail businesses at all, much less a retail business that starts out "leery" of them. Unless you have one of the best retail businesses ever, which seriously promises VCs a good chance of making 100 times what they put in, they aren't intertested. Don't waste your time or effort on that.

As to angels, in your case it would be somebody who knows your line of business and wants to invest in it and likes you and trusts you, and they would do that only if they stand to make a very good return, and probably -- although not necessarily in all cases -- only if they own a controlling interest in the business. After all, assume they aren't stupid, and think about it from their point of view. If you were an angel investor, would you invest your money in a retail start-up that doesn't want to give you ownership? Why? What would you get out of it? Answer that question and you'll have made some real progress.

You might have to be more realistic about starting small, not large. Sometimes people get where you want to go by starting small and working hard and making good decisions and managing to grow by force of will, attractive offers to customers, and sticking to it.

Ultimately, it isn't magic. You either have the money or assets to risk or you make an attractive offer to investors. I hear about grants and government money but I've never seen that really work, and I've been in this business more than 30 years. To investigate further, go to the SBA website at www.sba.gov and do a good search of loan programs and grants, but don't get your hopes up because even SBA loans require you putting up at least 30% of the start-up funds. Also, contact your local Small Business Development Center and ask them for help, take their classes, get to know them. They are very good, amazingly inexpensive, and local. You can find local contact information at www.bplans.com/sb/

Tim
More from Entrepreneur
Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Discover the franchise that’s right for you by answering some quick questions about
  • Which industry you’re interested in
  • Why you want to buy a franchise
  • What your financial needs are
  • Where you’re located
  • And more
Make sure you’re covered for physical injuries or property damage that occur at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business

Latest on Entrepreneur