Many people believe that is not possible to start a business without financial capital. The reason this appears to be true is that almost everyone believes that capital is only available from the bank. Whereas this makes banks very rich. And ensures that everyone who wants to start a business comes out of the bank with a loan, this approach also ensures that your business starts with you in debt, and your business on a mortgage. A mortgage means you do not own the business until you have paid every dollar owed. So rather than starting your own business, you have started a business for the bank. This may not be the best way to start your own business. However to start a business without capital, you need to understand some basics about business.
The first basic is business. A
business is an organization of materials, resources and manpower to create
value or if you like wealth. Many people think that a business is a fixed
feature like a shop, garage or taxi. You hear people talk about somebody being
in the "taxi business" or "clothes business". Business is
the organizational ability a person has to create value that can be sold. A
painter for example, uses a canvas and a crayons to produce a valuable picture
that someone else wants or needs and will pay for. By applying his skill to the
canvas, he is able to create wealth for himself. Before you think about
starting a business, be very clear about what you can do to create value that
can be sold. A business is the ability you have to create wealth. Usually, it
is unique to you. You have no business being in business you cannot
do.
The second basic is capital. You
will notice that the first paragraph talks about financial capital.
It may surprise you that there are MANY other forms of capital. Financial
capital is NOT the most important. The word 'capital" means
"resources". To start a successful business you must investigate ALL
the resources (capital) available to you before you start. You may find that
you already have all the resources you need. Resources include; knowledge,
skill, time, health, money, phone, laptop, paper, bed, ideas, the list is
simply endless! It is your ability to organize and arrange these resources to
create value that people need that enables you to do business. Many people
leave the crayon, canvass and time at home and go to the bank to get a loan to
buy crayons, canvas and time to create a picture with money they did not NEED
to borrow.
The third basic is enterprise.
Many people believe enterprise is some gift or natural ability that cannot be
learned. This is not true. Enterprise is the ability to create value and
exchange it for wealth (or money to buy wealth). There is no way you can be
employed in an enterprise if you cannot practice enterprise. Surprise,
surprise, every employee is an enterprise that makes more money (wealth) for
the enterprise. You already know the three principles of enterprise.
They are focused work, productivity and patience. If you do not know
what you are doing in business you cannot do business, the painter must
paint pictures. If he does not paint sellable pictures, he is not in business.
The painter needs patience to paint, produce and get paid for his enterprise.
Finally, money is not wealth. The paper (money)
gives you the power to buy the assets and property you want or need. These
things have value. That is why it is possible to start a business without
financial capital, but impossible to start a business without resources.
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