Starting a business with limited cash requires a shift in mindset

Borrower demand in Asia has increased (Image credit: aenri05/Flickr)

In an environment where funding options for start-up businesses are severely restricted, starting a business with limited cash requires a shift in mindset.

By: Hitesh Khan/

We are conditioned to begin the process of looking for new business opportunities by asking: “Where is there a gap in the market and how can I fill that gap?” A gap could be an unfilled customer need or a new invention yet to be brought to market.

Next, we establish a goal to create a venture that will fill that gap. We consider the resources necessary to make our goal a reality and go out in search of those resources. We write a business plan and present it to potential financiers with the promise of a return on investment.

If the financiers like us and like our idea, they provide us with the capital to start the business. If not, we are stuck. Most times, people find it difficult to raise the resources they require, causing the entire project to fall on its head.

There is an alternative route to creating a new venture. Instead of starting with the question, “Where is there a gap in the market and how can I fill it?” ask yourself, “What do I have and who do I know?”

limited cash
Image credit: Flickr l Aleksandr Zykov

Carefully examine the resources and relationships over which you have influence, and consider how you can put these to work quickly and effectively to create an offering that the market needs or wants. You can experiment using different combinations of resources to test how the market responds to different offerings and over time create an offering that is really valuable to others.

With this approach, an entrepreneur’s goals emerge over time, taking resources, connections and contingencies into account.

They are not fixed at the start of a project as they are when the traditional approach is applied.

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Here are some principles and guidelines that will provide you with a better chance of effectively launching a business with limited cash.

1. Start with what you have

At the outset of looking to start a new business with limited cash, take stock of what you have at your disposal. Consider your:

  • Skills – what can you do?
  • Experience – what have you done in the past?
  • Knowledge – what do you know?
  • Tangible resources – what do you own and what do you have access to?

If you really need help before you start your businesses, you can check with the guys at SingaporeIncorported.com, they help entrepreneurs startup and help evaluate your business model.

2. Take into account who you know

What you have needs to be combined with who you know for it to have real power. Take stock of the relationships you have with others, map out your network of connections and consider how your connections could enable you to use what you have more effectively.

3. Invest what you can afford to lose

There is a big difference in your mindset if you start with the perspective that “I am investing this amount and I expect a 30% return” versus “I can afford to lose this much, therefore I will put it into the business and see if I can make it work”.

If you have only put in what you can afford to lose, you maintain flexibility in the business and minimise stress in managing it. If you are only willing to invest when you expect that you can get a specific return, there is a strong chance that you may never take the leap and launch the business you always dreamed of owning.

An example of this is the entrepreneur who refuses to leave a well-paying job until he finds an opportunity that he predicts will pay more, versus one who decides to invest a small portion of her savings and two years of her life in a project that she believes is worth that amount of time and money – irrespective of whether it will pay more than what she currently earns.

This is one good reason why those with limited cash should never not consider using a personal loan to finance their businesses.

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4. Experiment and adapt

With this mindset, flexibility and adaptability are a competitive advantage. You succeed not by becoming too fixated on a single goal or outcome but by being responsive to changes in the environment. Existing firms typically take longer to adapt than new firms because they have more incentive for things to remain the same and they have established routines and practices that reinforce the status quo.

New firms are not tied to the way things have always been done and thus entrepreneurs can benefit from shifts in consumer preferences, or shifts in technology or changing legislation by realigning their businesses to take advantage of such developments.

How to Secure a Personal Loan Quickly

Do you want to expand your business but have limited cash? Don’t worry because iCompareLoan loan specialists can set you up on a path that can get you the best personal loans in a quick and seamless manner.

We also can arrange the Best Home Loans in Singapore as our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs.

Whether you are looking for a new home loan or to refinance, our mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.

For advice on a new home loan  or Personal Finance advice.

If you want to speak to our Panel of Property agents.

If you need refinancing advice, we are here

Written by Ravi Chandran

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