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I’m excited to share with you how to start a business with no credit.I still remember the day when I went to buy a pickup for my first business and the car dealer asked me if I had credit.
“What’s credit?” I replied. Granted I was only 20 years old and had no clue what I was doing.
All I knew was I had a great opportunity to start a business and no vehicle to make deliveries.
I had no credit history, nothing, nada, zilch.
The general manager of the car dealership looked at me like I was crazy.
He asked me if I had any cash.
I had some savings, but I didn’t want to hand that over right away because I knew I still needed to buy inventory.
He explained that without something “down” I wouldn’t be able to purchase a vehicle. He also told me it was nearly impossible to start a business with no credit. I finally gave in and told him about the few thousand dollars I had saved up.
And with that small savings and an agreement to give him a discount on my product, he agreed to take a chance on me. He approved a loan for my first delivery vehicle.
I remember how my hand shook as I wrote that check of my entire savings to put a down payment on a truck. And now, I laugh at how important I thought that small savings was! Oh my gosh, if I had said no and walked away just to keep that small savings, I would have never built my business to the million dollar status.
It IS possible to start a business with no credit
This was one of my first business lessons I learned and one I will never forget. You have to be willing to take a chance on yourself and believe in yourself even if no one else does. And it IS possible to start a business with no credit.
You may or may not be in the same position. Maybe you have no credit or bad credit. Maybe you have a little savings or no savings at all. I want to tell you that it is possible to start a business even if you have bad credit, no credit, and no savings. Please do not let these things become excuses for why you don’t start a business of your own.
I tell people all the time that if you want to truly get ahead in life, then the fastest way is through your own business. And with a little excitement on your part, persistence to make it work, and listening and taking care of your customers, you will have success.
Tips for How to Start a Business with No Credit
I am going to share my tips for how to start a business with no credit. There’s nothing fancy here, but I do recommend that you start opening your mind to being more creative. You will need the ability to see many options if you want to have success with your business. Being close-minded or thinking things must be a certain way will keep you very stuck and will make the process go very slow. If you want success fast, be okay with brainstorming, asking for suggestions and help, trying many angles and failing a few times.
I was able to start a business with no credit because I asked questions when I didn’t understand something. By simply asking, “What’s credit?” I learned something very new and valuable that day. In other articles, we will get into why credit is so important and how you can take better care of your credit and why this is so essential for success in your life.
But for now, let’s just address how you can get your business started with no credit and no money.
Tips to Start a Business with No Credit
1. Use who you know
Essentially, write down the first few people who come to mind that you know will want what you are offering. We went to a car dealer to ask for a truck because we had a product we knew they might be interested in using. You might be able to work out a trade, or get them to co-sign, or have them pay you up front for the product or service. We didn’t know this particular car dealer as a good friend. We just knew we had something they might be interested in. Think about how you can serve that person even if it means doing side hustle work for them that helps them out in some way.
2. Buy ONLY what you have already sold
When it comes time to buy inventory to sell, ONLY BUY WHAT YOU HAVE ALREADY SOLD. What do I mean by this? Ask customers what they want or find out what they need, then buy the inventory and deliver it. Don’t buy things you THINK they will want or need. This way, you could even ask for payment up front and this will give you the investment money to go buy inventory. This tip will save you so much money in the long run. I made so many mistakes buying things I thought my customers MIGHT like. Keep things simple and just ask them. They will TELL you what they need. Then you can simply deliver it!
3. Get creative about how to get money to get started
I had very little money in the beginning stages, and I was very anxious about how to start a business with no credit. I thought I needed to get a business line of credit. So I put together a business plan and took it to the bank. Again, they asked me if I had credit or assets. Why would I be asking for money if I had access to credit or assets?!? I could have given up then and there, but I didn’t. I had already used up my small savings for my truck. Where would I get money to buy inventory?
I went to college! Ha ha, that’s right. I qualified for a student loan and was able to use a small part of that money to buy only a few products to get started. I remember my sales log for my first month was for only $26. But then the next month is was over $100. And the next month was over $500. And it just kept going up from there. I continually used the money I made to reinvest in my business.
Think about enrolling in a community college and taking business courses and apply for a student loan. If this doesn’t work, think about family members who might offer a small sum of money to get you what you need. The point is, get creative and ask for help.
4. Get a website
One of the first things I did when I started my business was I taught myself HTML and created a website. That was back when the internet was brand new and it took forever to load a web page. I sat patiently for months building up a website. Now, you can build a website in a little over an hour. I highly recommend putting together at least a one page website that features your best products or services along with your contact information. These days, you can get started for a very small amount of money and there are online tutorials to help you get going.
Make sure to also include an email signup and many ways for people to contact you, such as through phone, contact forms, email address, etc. My clients contact me in various ways. Some even just text me over calling me. Consider the many ways people like to communicate.
If you are interested in creating ablog of your own, check out this freetutorial that will help youstart a blog ofyour own. It walks you through getting aself hosted site. I’m currently using Bluehost and they are offering self hosted sites for around 3.95 per month (this lowprice is only through my link). When you sign up through myBluehost linkyou will also get a free domain name (you get to pick a name for your site!). Getting your own self hosted site means you own the site (no one can ever take it down or take it away from you). If you have been wanting to make money online with a blog or website, this is the first step. In a year from now, you will be so glad you started this for yourself! The sooner you get going the better!
5. Test out your ideas with actual people
The easiest way to ensure success with your business is to test out your ideas with your ideal client. Take the product or service to them and ask them what they think. Let them use the product or service. Get feedback. They will tell you what they need if you listen. And remember, don’t buy inventory you think they might want!
Related article:
Starting Your Blog How to Make Money Online
6. Deliver your product or service to people and take care of them
Every time you deliver a product or service someone buys from you, you are validating your idea. I found out early on that it was really important for me to show up consistently and take care of my customers even if they didn’t need more of the product when I checked on them. By showing up, I was able to spend time hearing about their needs which gave me fuel for more ideas later down the road. I saw trends in the things people were saying, and I was able to use that in conversations with new customers. This helped me develop trust and made me look like an expert over time.
7. Create lots of friendly content to get people to your site
Once my products and services were validated, I was able to create DIY videos, tutorials, and articles to build up content on my website. Over time, my website became an extension of me. Many people used it as a resource to learn how to use my products creatively. Of course, I offered things like reminders about upcoming holidays so they could plan. And I utilized order forms for new clients to set up an account easily. You may also want to provide a contact form for people to request more information. They may offer suggestions about new content they would like for you to add!
8. Register your business
At some point, it’s a good idea to register your business and pay the fees to get it represented as a legitimate company. You can do this by registering it through the county recorder’s office as a “Doing Business As,” or turn it into an LLC or corporation. I started off with a simple “Doing Business As” in the beginning stages, and then with time, converted it into an LLC and finally a corporation. Your county recorder has information about how to set up a “Doing Business As.” When you are ready to upgrade to the LLC or corporation, check with a CPA or lawyer for help with next steps.
9. Continue nurturing ideal clients
Keep generating word-of-mouth by showing you understand your client’s needs. As people see that you genuinely care and you keep showing up, they will refer you to sister companies, co-workers, even their own family members. Most importantly, build upon what is working and release what isn’t working. With time, you will see who your ideal client is. Then you can place more of your time and energy in acquiring people just like them. Eliminate the ones that create multiple headaches and never pay on time. You will find with time your customer base just keeps growing. This is an exciting sign and it’s a time when you can expand, get help, or franchise out.
What do you know you need for your new business? If you are about to start a business with no credit or no money, who can you go to who might want to work with you or buy from you?
