On this episode of How to Money, Matt and Joel talk with Alan Donegan, founder of the PopUp Business School and the Rebel Entrepreneur podcast, about how to start your own business without taking on any debt. The old cliche is “you have to spend money to make money,” but Alan has found that you can be very successful without spending any money at all. And when you start a business without debt, it’s much easier to fail and try again than when you’ve dug a giant money hole you have to climb out of. He demystifies entrepreneurship, showing us how it is both attainable and easier than we think, and shares his tried-and-true tips for getting started that anyone can use – he even helped a homeless man, who had nothing but the clothes on his back, start his own business. It’s all possible, if you have the mindset and the motivation.
Alan tried the traditional path, he says; he spent two weeks writing a beautiful business plan, determining how much it would cost to start his business, and building a budget. But instead of going to the bank for a loan, the usual next step, he went to a real-life customer. He discovered they didn’t want to buy what he’d created. If he had gone down the traditional path, he would have sunk thousands of dollars into an idea that didn’t work. So, he says, forget the plan – start with sales. Find someone who wants to buy your product or pay for your service first. Run an experiment, in a time frame – say, one month – and learn on the go. First, did you enjoy your experiment? If you enjoy what you do, it helps keep you motivated when things get tough. Did your customers give you good feedback? If so, that means you’ll be able to find more customers in the future. And finally, did you make any money? Or at least break even? Essentially, you’re doing your own market research without having spent the money to create the product or service first. That way, if you find out there’s no market for your idea, you can walk away from it easily. You don’t have a huge loan or investment to pay back; you only risked your time and energy, and learned a lot in the process.
Deciding to start a business without taking on debt pushes you to find solutions that wouldn’t normally occur to you if you were just throwing money at your problems. For example, one couple Alan helped wanted to start an escape room. That’s hard to do without money because right off the bat, you need a building. But instead, the couple went to every restaurant and hotel in their town asking if they could borrow a spare room for a pop-up escape experience. They were rejected over and over, until finally, a hotel said yes; their escape room would add value to the hotel, giving people a reason to come in and have a drink or a meal. Within six weeks of running the pop-up, and only spending a little over $1,000 to set up, they had made enough money to put a deposit down on their own building. They also had a list of existing customers, learned incredible lessons about how to manage an escape room effectively, and incurred absolutely zero debt.
Starting your own business isn’t for everyone, but anyone can do it. Alan discusses the money mindset, the exciting and terrifying aspects of being your own boss, why selling something is actually helping make the world a better place, and how to know when your side hustle can become your main gig; get all this great information and so much more about making your business dreams come true with zero dollars on this episode of How To Money.
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