Starting a business without money: these are your options

You can start your own business even if you do not have a lot of starting cash. You get into business because you want to start earning money, and because you enjoy it. Of course, the type of business you are looking to start does make a difference. This article will help you to start a business if you have limited or no funds of your own.

The KVK Advice Team regularly receives questions from new business owners who believe you can only start a business if you have money or financial backing 7 frequently asked questions about starting a business without money:

1. What type of business can I start without money?

Most new business owners tend to start businesses with which they have previous experience, based on personal interest, educational background, or professional experience. If this applies to you, you probably already have the equipment or tools you need, allowing you to start your business with minimal resources. When it comes to these types of activities, your expertise or knowledge is sufficient to be able to help your customers. This might include garden maintenance, odd jobs in and around the house, architectural work, administrative support for businesses and coaching or consultancy work.

2. How much does it cost to list my business in the Business Register?

You pay a one-time registration fee for your registration. You can deduct these costs from your profit when you file your income tax return. Some suppliers or government agencies will ask you for an authenticated certificate from KVK. This is essentially a ‘passport’ for your business. Organisations can also access the information from the Business Register electronically. In which case you often no longer need a printed certificate. Be sure to make your business associates or agencies aware of this, as this will save you money.

3. Does KVK check if I have money upon registration?

No, we do not. KVK manages the registration of businesses and does not check if you are solvent. When registering your business in the Business Register, you must provide the following information:

  • the name of your business
  • the address of your business
  • the types of business operations
  • your contact details

4. Can I opt for a free legal form?

Anyone who starts a business must choose a legal form. This is the business structure of your business and determines, among other factors, your liability and your tax obligations. The eenmanszaak (sole proprietorship) and vennootschap onder firma (vof, general partnership) are legal forms which are easy to start yourself without engaging the services of a notary. You will, however, be required to pay the one-time registration fee to KVK.

If you are looking to start a besloten vennootschap (bv, private limited company), you will need to see a notary. The fee you pay will vary depending on the notarial service and depends on your requirements. You generally pay an amount of between €300 and €1,000.

5. How do I know if I need money to start my business?

We recommend that you write a business plan to help you systematically prepare for your career as a business owner. The business plan includes an investment budget: a list of the minimal financial resources you need to get started. If you do not need to buy anything before starting your business, the amount you need may be 0.

We recommend that you make a forecast for several years. While you can start a business with no funds of your own, you may require financial resources down the line to be able to grow or replace equipment or materials. You should set aside some money for this purpose.

6. What are some of the areas in which I can save money?

If you have no money, there are all kinds of ways in which you can save money. You can accomplish a lot with a little extra effort and creativity. This might include free advertising, setting up a home office, or managing your own accounts.

Harness your network and people you know. You might do something for that independent contractor you know, and they return the favour. Networking is a key business skill. Having the confidence to approach people is an important part of networking. You may gain some new clients and enter into new partnerships. An additional advantage is that you can learn a lot from others.

7. I do need money to start a business. How can I secure these funds?

The most obvious answer is by going to a bank. However, banks expect you to take risks by investing, and if you have no money, this option is often not available. If you do need money for your business plans, you can work and save money at the same time. This may mean that you will temporarily need to cut your personal expenses for a while. You might do this, for example, by starting out small and then working on growing your business. For example, by starting your business on a part-time basis in addition to your day job.

In this case, you should talk to people in your network. A network can help you in your search for money and give you money-saving tips. In addition, you can also secure funding by:

  • hiring the services of, for example, a coach or adviser/consultant. A good financial rationale increases your chances of obtaining funding.
  • securing a private loan. This often involves borrowing money from family or friends. While this may be a good solution, you should agree on these types of informal or private loans.
  • crowdfunding. You can use a crowdfunding platform to raise funds through crowdfunding. You explain your plans to the public and then ask them to invest money in it.
  • find out if you are entitled to government funds for investments in startups. Startups are businesses with novel ideas and products made using new technologies.
  • enquire with Sociale Banken Nederland (in Dutch). This is an alliance between local councils and 23 credit banks in the Netherlands. This bank serves, among other things, people who want to borrow money to fund their business, but who would be turned away by regular banks.
  • apply for business capital from your local council under to the Besluit bijstandsverlening zelfstandigen (Bbz). As a new business owner, you can request business capital to invest in your business. This is typically a loan, but it could also be a gift. Whether and how you receive Bbz depends on your situation.
  • by contacting Qredits (in Dutch). They provide funding to new and established businesses. You do not necessarily need to contribute funds yourself. Qcredits will assess your business plan and why you need money. They will then evaluate whether the risk of starting a business with no financial contribution of your own is acceptable. Note that having some money of your own will increase your chances of securing funding.

Do you have questions about starting up with few financial resources? An adviser from the KVK Advice Team will be happy to think along with you: 088 585 22 22.