How to Create a Million Dollar Business When You Have No Money
Serial entrepreneur and CEO and Co-founder of Business Cloud Communications Company Nextiva, Tomas Gorny, knows a bit about building something from nothing. He came to America at age 20 without speaking a word of English and built his first million-dollar business within two years. Tomas has taken two businesses, IPOWER and Nextiva, from concept to more than $40 million in revenue in just a few years without any outside capital (the first one launching when he was completely broke). Nextiva is now the third largest telecommunications company in Arizona and one of the largest business cloud communications companies in the US.
Tomas shares his tips on how any business, even a technology business, can become a million dollar enterprise, even when the founders are strapped for cash.
Take Baby Steps: One of the reasons that many entrepreneurs feel like they need money is that they try to do too much upfront. Rather than obsessing over raising outside funding, it’s more effective to simply launch your business and reinvest as you’re experiencing cash flow. Simply put, just launch and work to perfect your product or service as you grow.
Sell First: Another entrepreneurial trick is using your customers as a source of financing. When Gorny launched his web hosting company, IPOWER, he offered pre-paid yearly packages at a discount price. This incentivized customers to pay for more upfront and IPOWER used that cash flow to run the business, taking it up from zero to $40 million in five years.
Persistence is Free: Many entrepreneurs seek money for marketing, only to waste it on ineffective advertisements. Gorny learned from his grandmother, “when they shut the door, come through the window”. Use guerrilla tactics and be persistent- picking up the phone and “smiling and dialing” or using social media uses up time instead of cash flow.
Be Willing to Use Your Limited Resources: For the times when you do need capital and you don’t have a bank or an investor willing to give you cash, consider using your credit cards. Gorny used his in a limited capacity in the early days of starting and launching his businesses. Be willing to pawn your watch or sell your baseball card collection too if that’s what it takes to get your business to the next level.
During times where you do have money, invest in your idea, as Tomas did with Nextiva. If you’re not confident in using your own money, you’re likely not entering the right business.