So you’ve built your startup but slowly realized a looming, dreaded hurdle: cash flow.
There needs to be more than a great idea when embarking on a new venture; funding it is half the battle. However, just because you have limited resources doesn’t mean your journey to entrepreneurship is over.
Here are some tips from entrepreneurs to effectively build a business with little or no cash to survive and thrive.
BUILD SLOWLY BUT SURELY
Ideally, as an entrepreneur, you want to offer the perfect product or solution to the market. In reality, no product is ever perfect.
An essential tool for the lean startup is the build-measure-learn methodology, which consists of implementing strategies and experiments, analyzing key metrics, and validating or invalidating your assumptions.
Jon Santillan, founder, and CEO of remittance app Denarii (which was acquired by Careem in 2022), calls it a creative method.
“Rather than overbuilding the product with loads of features, we focused on building something people wanted and were willing to pay for,” Santillan said. “We were intentional about our development process and focusing on the features that would provide the most value to our users.”
Another way of looking at it is to build up the business’ revenue streams first, says Ambreen Khan, founder and CEO of Trado, a digital platform offering smart solutions for the food supply chain. “Work towards making the company profitable before scaling,” she advises.
FOCUS ON THE CUSTOMER
Having started in 2019, Santillan was utilizing tech to make international transfer cheaper and faster, with its API now used by Careem Pay to connect customers and drivers with remittance services provided by licensed providers. But when the venture struggled to grow its user base, Santillan says having a customer-centric approach helped.
“Instead of spending money on traditional marketing methods, we took a grassroots approach, and my co-founder and I went out to talk to our customers,” he recalls. “This allowed us to grow the user base, [and] at the same time, helped us to understand their needs, and built a product that truly met them.”
USE YOUR WASTA (NETWORK)
Another way to leverage existing resources is by leaning into one’s network. Fostering one’s network is a key component to the ongoing success of your business, whether it’s to find new business referrals, partnership opportunities, gain feedback, or find mentorship and support.
“Building strong relationships with customers, partners, and investors can be a valuable asset for any startup,” says Santillan. “Reach out and engage with your network, ask for help when needed, and look for ways to create mutual value.”
This is also echoed by Sara Chemmaa, founder of Citron, a lifestyle brand. “Utilize your network of friends and LinkedIn [connections] to get discounts and deals on goods or services.”
Khan adds, “Build partnerships and use them as your marketing tool.”
BUILD AN A-STAR TEAM
As an entrepreneur, you might be tempted to do everything independently. This is true at some point, says Khan, “Founders should carry out most of the tasks themselves to understand a role’s requirements before starting to hire talent.”
Of course, hiring with limited resources is not an easy feat. From having limited capital to hire to being unable to afford a workspace, Khan recalls facing this exact problem. The founder decided to outsource non-critical tasks to external agencies to solve the issue. She says, “The entire team worked remotely for six months before we built an office space.”
And as your business grows, you need an incredible team behind your back. This involves finding the right individuals with your vision and passion. Having started with trainees who were later trained to become full-time employees, Khan adopted employee stock options to build a strong team to retain talent for the long term. So far, this tactic seems to have worked – the platform is now helping more than 50,000 food traders and is soon setting up operations to launch in Jeddah.
According to data from CB Insights, roughly 47% of startup failures in 2022 were due to a lack of financing. As such, flexibility and adaptability with capital are a competitive advantage.
Having launched her venture in 2018, Chemmaa recalls being a team of only two people and unable to afford to hire anyone else. “Every penny counted, and we bet on free marketing overpaid by doing barter deals rather than paying influencers.”
The founder also advises the importance of being creative and using one’s skills. “Think of smart ways to generate cash – even if it is outside of your comfort zone — you could be a consultant on the side to get some income to pay salaries, for example.”
Santillan suggests being resourceful with capital, “Find ways to do more with less, such as leveraging free or low-cost tools and services. Joining an accelerator program like 500 Global is an example that can be a great way to gain access to additional resources and support.”