Can you Risk losing something you own to Gain something you've never had?

Every week I meet with people starting businesses or trying something new within their existing businesses. Since majority of my clients are smaller startups, the complaint always centers around money.

How can I start if I don't have money? How will I be able to continue in business without money?

Financial woes is always a tough subject. I can definitely empathize with financially strapped aspiring entrepreneurs. However I know one thing: my lack of funding or finances did not stop me and it shouldn't stop you. You have to plan around fixed costs and budget. What is your personal breakeven? A lot of people don't know this answer. Your entire lifestyle would have to change and that change starts with you.

Today was a "pep talk" day for me so I decided to blog about the topic. See, depending on what business an individual starts, they may have to bear more financial risk than others. For example, a daycare center has to have its location ready to go before it can get approved to open. If this facility does not get approved, or there is some major glitch, the startup owner could be stuck with a lease or a mortgage. Another example is a beauty salon. The salon needs to meet permit requirements and have its structure and blueprints in place in order to get approved for opening. If the application is not approved, the owner assumes the risk.

Now I work with commercial realtors and attorneys who help with minimizing some of these risks for clients, but just imagine the turmoil some business owners have to go through.

There are entrepreneurs who strive to minimize financial risk as much as they can and in doing so, they end up structuring their businesses improperly because of this cautiousness.

Stephanie Chandler in her book, The Business Startup Checklist and Planning Guide, talks about financing. "Locating financing for your business is perhaps one of the most daunting tasks you face," she says and then continues, "but if you want your business badly enough and you put forth the effort, you should be able to find a way to...even if that means you have to start small."

Start small. Think Big. This is what I advise my clients. I tell them, "bootstrap a business but don't you dare look cheap doing it." You have to think big and the threat of no money cannot be the factor that holds you back from your dream. Take the extra money for eating out and make your business cards.

Norm Brodsky and Bo Burlingham state it wisely when they say, " to be successful you have to get over your panic....you have to accept a never ending flood of complications as a normal part of the business process..."

Seth Godin, the king of bootstrapping advice, urges to "sell a product in a way that makes sense to people who want to buy it."

My advice?

• Start small by funding your business through customer acquisition. Get your first customer, and train yourself to redirect a percentage of each sale back into marketing and product/service enhancement. Start in a shoe box, watch your sales, and move your office size up accordingly.
• Think big by spending a portion of your customer acquisition income on marketing materials, advertising costs, product/service enhancement, etc. Don't cheat your product or service because this should be what differentiates you. Unless you want to be known as a business owner that produces the worst end product. Good luck building your business then. If you're working in your garage and selling an amazing product, your clients should not be able to tell you're bootstrapping a business by looking at your product.
• Study your market thoroughly. If you're wondering what this has to do with making money, the answer is "everything." By researching your target market, how they buy, what solutions they need, what your competitors offer clients, you can figure out how to create a product or service that makes people spend.
• Learn what matters to your target audience and only spend money towards these items.
• Don't overcharge. Just because you need money desperately, doesn't mean clients will pay anything for your service. Don't try to pass on your costs and problems to your customers. If you do, they'll just go to the big companies and pay for their extended resources.

Just keep one thing in mind, you will always have some risk. If you're not prepared to give up something in order to gain your business, then I'm afraid entrepreneurship is not for you.

About the Author: Cheryl Isaac is the writer of this blog and the Startup Business Consultant & Owner of Isaac Business Services; an agency that offers startup concierge & business planning services for small businesses.