Many people hold off on starting a business because they figure they don’t have the money to start. But you don’t need money at all to start. In fact, the less you start with, the less you have to lose!

So starting with nothing should really make you pretty fearless!

I’ve always loved the brief story here of a guy who literally had nothing but a borrowed ladder to start with, yet was able to create a multi-million dollar business.

He didn’t even own the freakin’ ladder!

How is that possible? Was it all just luck?

Here’s how his story goes:

In 1987, Gary Schoeniger was broke and deep in debt. He had no cash. He wasn’t even sure he had any marketable skills. One thing he did know?

That he had no choice but to be a success. He was out of options.

So, one day he got into his 1972 Dodge with the banged-in door, borrowed a ladder that he strapped to the roof, and then went house to house offering to clean gutters.

From those lean and virtually hopeless beginnings, he eventually built the business into a multi-state, multi-million dollar construction management firm. But Gary says, along the way, he made every mistake in the book and would do a number of things differently if he could do it all over.

To me, this is incredibly inspiring. And it shows that most of the barriers people have to actually accomplishing their goals are self inflicted.

The Concept of Value

There are lots of things you can do to start a business when you don’t have any money. The key is to understand the concept of value, and realize what you can offer that is valuable. Usually, this is time, but it may also be skill.

Time is most common, since if you have no money it probably means you aren’t working, and therefore you have at least 40 hours free that would otherwise be filled with a job. So, all you have to do is trade your time for money, doing something someone else considers to be not worth their time relative to what they would have to pay you.

The guy in the story above used his ladder to clean gutters. This is a job most people don’t enjoy doing, so he was able to trade his time for their money to do the job. There are lots of jobs like this- cleaning the garage, pulling weeds, detailing cars, painting and so on.

To get started in any of these, you simply have to go out and solicit the work. Granted, this isn’t going to earn you a huge income at first, but as soon as you have developed a reputation, and gotten some money together, you can reinvest some of the profits in creating a more professional appearance, hiring a helper, etc. so you can grow into a full fledged business.

The other attribute you may have in starting from nothing is a skill. The idea is the same, but instead of trading your time directly in unskilled labor, you are selling your time to provide a solution. This may be something as simple as tutoring or teaching piano lessons, to something more complex like doing website design or computer programming. There are no shortage of places online to sell your skill, including by geography (craisglist) or by skill type (writer’s markets, programmer job boards, etc).

The advantage of selling a skill is that you can often command a higher hourly rate, so you will make more money faster than selling unskilled labor.

If you don’t have a skill, you can certainly spend some of your time learning a skill you can sell while you are still selling your unskilled time.

There main point is that no matter what your current startup capital situation, there is no reason you can’t start a business and grow it. You can always move onto something you would rather being doing later, when you have more cash to spend on launching that particular business.

What If You Have Money to Start With?

OK- so what if you have plenty of money to start a business- does any of this concern you? Well, it certainly could. How much faster would you reach your financial goals if you owned two successful businesses instead of one? Would owning two reduce your risk and diversify your portfolio so that if one ever ran into trouble with one you would have another to fall back on? Certainly.

Therefore, if you wanted to start a second business, and instead of using your own time, hire someone to do the work, you can still start very inexpensively. And, you can grow faster if you have more cash to spend, or you can simply let the second business build on it’s own while you run the first business.

Knowing how to start a successful business that can grow into a large healthy business even though it started with next to no capital investment is something that should interest every serious entrepreneur, whether they decide to try it out right away or down the road. Considering there is so little risk and potentially a very good reward, I don’t see any reason not to give it a try if you have an idea for a no cost startup you’d like to try.

When most people think of business risks they think of bad things that can happen to the business that are about the business. What if we open the restaurant and everyone hates the food? What is we start a website and we can’t get any traffic?

These are internal risks and need to be addressed in the course of planning to launch a new business. Internal risks are the ones that are under the control of the founder and based on decisions that are made about how the business will work and what it will be.

If you decide to start a business selling ultra-high end costumes for cats, in Haiti, and it doesn’t work out, that’s on you. You ignored the utter lack of market demand, market size, price fit, competition and the fact that there is no way to effectively market those goods.

Plus, that’s just a really dumb idea. It was completely avoidable if you had half an ounce worth of common sense.

What is External Risk

External risk, on the other hand, comes from things you can’t control but that may tank your business.

Some external risk, although it can’t be controlled, can be foreseen. For example, if you are thinking about starting a business that takes advantage of a regulatory loophole it is foreseeable that at some point that loophole might get closed. If it does and you didn’t plan for that, it’s still on you.

It’s fine if your plan was to just exit the business as soon as the loophole closed- that is a plan. If you find yourself going bankrupt however, when the loophole closes because you just didn’t think the good times would ever end, that is on you.

For most businesses, the risks of foreseeable external risks are easily mitigated by addressing large markets with proven demand. These are not the types of markets that dry up overnight or suddenly shift in a way you won’t be able to react to if needed.

But that said, if your business in any way relies on external conditions outside your control, you need to be aware of what they are and have a viable contingency plan in place to address them.

One example of this might be relying on Google for your business sales based on a particularly good ranking in their search engine. You have no control over where they decide to rank you and they can switch you any time they want. If you don’t have a backup or alternative source of traffic that still makes economic sense for your business you could be in big trouble in a big hurry.

Another example is selling products that are similar to products that have been banned or regulated or are likely to be as soon as the legislators get around to it. This has happened to clients of ours who were selling products tangentially related to Kratom, which became the target of DEA and FDA investigations and subsequently banned from being sold in some states. This was a very foreseeable risk given the nature of the product and the controversy surrounding it.

Foreseeable external risk is something that you need to be aware of and factor into your plans if you want to have true peace of mind in launching your startup. Otherwise, even if all the other pieces fit, you could be torpedoed by an external factor you failed to take into account.

Unpredictable External Risk

External risk you can’t see coming is something that fortunately doesn’t happen very often but it can ruin an otherwise good day. Not too long ago there was a story on the news in San Diego about a business which, after working on launching for six months, had a pipe break the day of their grand opening which ruined their entire inventory and destroyed their building. Ouch.

Other examples of this kind of thing are having a key employee suddenly poached by a competitor, having a key vendor or key customer get acquired by another business and your expected deal or supply go away or change drastically or having a new technology suddenly arrive on the scene which bypasses or obsoletes your solution overnight.

There are not many defenses against this kind of bad luck except to try and have as many plan B’s and backup sources as possible for anything you can. On the other hand, if you spend all your time trying to plan for every possible contingency you will never actually get started and most of them will never come to pass anyway.

The good news is this kind of external business ruining risk is rare and generally unlikely to happen to you. The bad news is there is not much you can do about it. Which means there isn’t much point in worrying about it, right?

Plan for what you can and then go and launch your business. If you get blindsided by something that you never could have seen coming then just pick up and move on with a new idea. And if you’ve planned right and luck is with you, you are going to have a great business that will be successful from the beginning.