Discuss: Do you need money to make money?

[Chell]

Do you think you can start a business from nothing and make money?

Or

Do you need money to invest before you can make anything?

[littlesheep]

I think you need some start up money... I was lucky and when I returned to work after having T my self-employed earnings (which were under Littlesheep Learning as educational consultancy) funded the initial outlay for Littlesheep Learning (http://www.littlesheep-learning.co.uk)

I think it's possibly different if you are offering a service if you can start up and spread by word of mouth without needing to buy anything?

[Olive_Oil]

mmmm - I would say no....you have to speculate to accumulate! .... but saying that...i guess it really depends on what your business is....if you are selling hard product then i would say yes...as most places make you pay up front for your first order...and most have a minimum order quantity...makes it pretty impossible to not part with any hard cash first off! whereas if you are more consultancy based and there is no hard product as such then i would imagine there is less to invest....

[whirl]

I think you do have to have money, there is so much more than just stock to pay for.

[lajlaj]

It depends what you do! For service industry people who already have a phone and computer, then no you can just get going - although you would need a small investment for leaflets or advertising or whatever.

For product based businesses you do need money to buy stock in. It is possible to build businesses without having a major advertising and pr budget - at the beginning (both times) I did it all myself!

[Ravenfire]

I think it depends on the type of business although ultimately you do need some money to get it up and running.

[littlesheep]

It is possible to build businesses without having a major advertising and pr budget - at the beginning (both times) I did it all myself!

I agree - I've not paid for any (well apart from the mumszone brochure!) yet - I'm just about to start looking into it seriously to try and take my business to the next level!

[MerrilyMe]

I invested £300 worth of child benefit in BM. Over 4 years, i've since borrowed around £8K in total to allow expansion and it is currently turning over close to £90K. I could have done it without that £8K but it would have been a touch slower.

I think if a business can be created on £300, and essentially it only took that much because hama beads really aren't anything unless you have a few lines for people to choose from, then it can be done on a tiny investment. If i needed to create £300 again for cashflow, i guess i could do it with a good hard ebaying of kids clothes and toys. Actually, i could raise quite a lot from that.... *looks about optimistically*

[Al1x]

I started KPautomotive from nothing! as i don't need to but any stock its so easy.. not making loads, only about £30 per month so far but thats all profit!

however for my sling site i'm making i have to buy a whole load of wraps/carriers as the companies i'm dealing with don't drop ship.

[megfenn]

I started White Ochre Design from nothing, but as Nadine said, if it's a service and you have a phone and PC then it's possible. I did put nearly all of my earnings from the first few jobs into advertising and promotion like b. cards leaflets etc. and also I had some left over income from my redundancy pay that I saved until after my 2nd child was born, specifically to help whilst starting up the business.

Having said this, I did invest in a Masters degree and I wouldn't be doing what I'm doing now if I hadn't spent the money on that. Although that may not count as direct money spent on starting up a business?? But I do think any courses or training is an investment in your future/business no matter what sort of business you start up - if anything to build confidence, get to know the industry and to make contacts. Sort of off on a tangent there.

[Millymoosmum]

I guess I am proof that you don't need money to begin - though I know how lucky I am to have found a business that I can run from home using primarily my skills and a good internet connection LOL - I think it largely depends on what kind of business you are running.

[MerrilyMe]

Out of curiosity Meg, how did the Masters help you? What was it in and how did it get you to where you are?

[megfenn]

It was in Design Studies and dealt with both design theory and different types of design but focused mainly on graphic design. It was broad rather than specific which was great since I'd only done Fine Art and a little bit of product design in undergrad. I had spent the 6 years before in both Prague and Tokyo with breaks in Thailand, Korea and The Philippines and I had never lived in England before so it really helped to get me started on my career change. I knew I wanted to do something with design and computers but I wasn't sure what exactly.

I don't want to make this too long LOL, I could go on and on about it and bore you. But basically it was a good stepping stone for me and I really enjoyed it and got enthused about design and what I could do and it helped to give me the confidence - talking about design, writing about it, the design process, the technical side of things, the creative side of it all. That was my strong point and that is why I did the course in the first place. The course itself wasn't brilliant - could have been improved, but I took from it what I needed. Shortly after 'graduating' I applied for several jobs (mainly design oriented) and landed a position almost immediately. I had no portfolio but they said it was clear from my CV that I was committed and creative. I doubt I would have gotten a job in design if I hadn't done the Masters. Then, after getting made redundant, I was able to start up my own business.

It's not all down to doing the MA since I've always been a 'doer' but it did help me to learn some technical skills and to get that all important job. Plus, if I hadn't gotten that job when I did, I would have missed out on the housing market and wouldn't have been able to buy my first house and then I probably wouldn't have had children when I did!

[obscure]

Coming in late to this topic as been madly busy and then took a break for a couple of days and went camping with the kids!

I setup initially with next to no outlay - just a years webhosting and my domains, but over the course of the first year I spent out around £500 on software and similar in the second year - but with additional costs of purchasing a hosting server etc as I wanted to go down the dedicated hosting server route instead of a reseller account as it gives more control..

I guess with a product focused business you'd have to have some kind of outlay at first else you just couldn't purchase anything to sell!!

I probably could have just ploughed back in my earnings to buy the software I needed or muddled along with freeware like I did in the first few months, but I felt that to be more productive I needed the decent software - and now I need to upgrade it all again but I dont regret my initial purchases :)

Sadie

[Chutney]

Hmmmmm. It could be possible to start with nothing but it would be a very slow build-up. I was impatient and invested about £2,000 of my money (luckily I had a p/t job). I have made this all back now but it took a few months.
If I had started with nothing, I would probably only now be in a position to look at a proper website, logo, stationery, jewellery equipment etc etc.
I think determination is far more important than money though. All the money in the world doesn't stop people getting bored with their business and giving up!
Take care
Chutney
XXX