Opening a business with no money: impossible gamble or achievable challenge?

Opening a business with no money can be difficult. But with a well-thought-out strategy, it can be done. If you're thinking of setting up a physical business with no capital, it could be wiser to turn to e-commerce . Because, unlike a physical business, e-commerce allows you to start up with (almost) no money, thanks to low investment costs.

Our best tips for starting a business with no downpayment

To reduce your financing needs, we recommend :

• Start with an MVP (minimum viable product)

• Don't outsource your marketing. Get trained

• Ask for help and advice (around you, on LinkedIn, etc.).

How to start a business with €0 in your pocket in 5 steps

You can create a business with no initial investment by following these steps:

1. Study your prospects' problems and expectations

2. Create a product that responds perfectly

3. Calculate your financing needs

4. Raise financing that doesn't require a capital outlay

5. Develop your acquisition channels

Let's take a closer look:

Step 1: Conduct in-depth market research

Market research is essential to understand your potential customers.

• Understanding needs and expectations

Before launching a product or service, find out what your customers want. This ensures an offering that meets real demand .

• Identify trends and opportunities

Analyze the market to identify untapped niches or emerging trends .

• Use the right tools

Platforms such as Google Shopping , ShopSpook and Amazon Marketplace offer insights into popular products and current trends. ShopSpook, among others, reveals the best-performing products and merchants on Google Shopping.

• Training and keeping up to date

The field of market research is constantly evolving. Get trained regularly and follow the trends with resources like Coursera or Udemy. There are more 7,000 market research training courses sur Udemy!

Imagine an online shoe store. Market research might reveal a growing demand for eco-responsible products, but few offerings of affordable eco-friendly footwear. This an opportunity .

Step 2: Create a product that perfectly meets customers' needs

1. Understanding Product Market Fit

Product Market Fit is the perfect match between product and market . This is when your target understands your product, buys it and talks about it to others. To be sure you've reached this fit, three questions are essential:

• Does my target group understand my offer?

• How strong is the perceived value and trust placed in me by my prospects?

• Is your target buying your product and talking about it?

2. Develop an MVP (Minimum Viable Product)

An MVP is a simplified version of your product designed for quickly test its suitability for the market . It allows you to validate your idea with minimal investment.

3. Test and validate the concept

Before launching a product on a large scale, it's crucial to test it. One trick is to buy advertising on Facebook and Google Ads and test your ads for a few weeks .

Un conversion rate is equal to or greater than 2.35%. is a good benchmark (it's the average for all industries). But above all, rely on customer acquisition cost (CAC) :

• If CPA is below margin, continue

• If the CPA is up to 50% higher than the margin, optimize your marketing campaign

• If CPA significantly exceeds margin, consider redesigning the product

4. Listen and adapt

Les customer needs are the guideline that your product must meet. If these needs change, your product must adapt.

If your customers like the design of your eco-friendly shoes, but find them uncomfortable, you need to work on comfort.

5. Swivel if necessary

If, despite all your efforts, your product isn't finding its market, it may be time to change.

Identify dissatisfaction signals and know when to pivot. It could be a drop in the Repeat Customer Rate (% of customers making a new purchase).

Step 3: Calculate your financing needs

When you launch an online store, it is crucial to draw up a detailed budget to anticipate costs and ensure your company's profitability. Let's take the example of a running shoe e-commerce business:

Initial investments

Fixed recurring costs (per month)

Variable costs (based on sales)

Profit prediction for reinvestment

If you anticipate sales of €10,000 for the first month :

• Advertising costs = €2,000 (20% of sales)

• Fixed costs = €100

• Cost of purchased inventory (€30 per pair of shoes) = €3,000 for 100 pairs sold.

Total expenditure = €5,100

Profit = 10,000 (sales) - €5,100 (expenses) = €10,000 (sales) - €5,100 (expenses) = €5,100 (expenses) 4 900 €

With this profit, you can reinvest to increase stock, improve the website, or increase advertising expenditure to attract more customers.

Examples of common hidden costs in retail development

Launching a store can reveal unexpected costs that can impact the initial budget. Here are a few examples:

• Return shipping costs

If 5% of customers return their purchases, at a cost of €15 per cancelled purchase, this represents a direct cost of €75 per 100 sales.

• Lost or broken parcels

Let's imagine that 5% of packages are lost or damaged. For a €30 product, this means a loss of €150 for 100 sales, not counting the cost of reshipment and after-sales service, which can amount to €10 per parcel.

Step 4: Looking for financing to open a business with no money

When starting a business, finding financing is often a crucial step. For amounts under €10,000, there are several options open to you:

• Consumer loans

A simple option with no need for the bank to provide proof. But interest rates are high.

• Love-money

Solicit funds from friends and family. Don't forget to pay them back!

• Entrepreneurship competition

An opportunity for innovative products. However, this option takes time.

• Grants

Various forms of assistance are available, including unemployment aid for entrepreneurs.

• Pre-sale crowdfunding

Asphalte, a men's clothing website, has used this model brilliantly, saving between €10,000 and €50,000 during its launch. This guarantees no unsold stock.

• Hero Extra Cash

Pay all your purchases later. Manage your invoices in one place and choose your payment schedule, whether now or in 30, 60 or 90 days.

And what administrative procedures need to be followed to open a business?

Launching an online store requires specific administrative procedures. Here is a simplified guide for future e-traders:

• Choice of status

Choose the auto-entrepreneur if you're just starting out on your own and don't need to make a big investment. It's simple and inexpensive. If you join forces, consider the SAS or SARL but expect to pay a fee.

• Registration

Get a SIRET number by registering with the Registre du Commerce et des Sociétés (RCS).

• Bank account

Even if you are an auto-entrepreneur, having a dedicated account to your business makes management easier.

• Accounting

Hold a simple accounting . If you're a self-employed entrepreneur, all you need to do is keep track of your income.

• Regulations

Make sure you comply with RGPD standards to protect your customers' data.

Step 5: Create a store and acquisition channels

Setting up an e-commerce site

• Choice of platform

To launch an online store, opt for platforms like Shopify or WooCommerce, which offer turnkey solutions that are easy to use and cost-effective.

• Secure payment system

Integrate reliable payment methods. This will reassure your customers during their transactions.

Opt for Hero Checkout a solution to competitive price enabling deferred payments up to 30 or 60 days . Offer a seamless and secure experience, by card, bank transfer or direct debit, in just one click.

• Customer support

Make sure you have efficient customer service. Answer questions quickly to build customer loyalty.

Strategies for diversified acquisition channels

A site without traffic doesn't generate sales. Here are some acquisition channels to consider:

1 - SEM (Search Engine Marketing)

Focus primarily on Google. It offers two approaches:

• SEO (organic traffic) : time-consuming, long-term.

• SEA (advertising traffic) : requires a short-term budget.

• Google Shopping : Display your products directly in Google search results.

2 - Social networks

Use platforms like Facebook, Instagram, TikTok, and Pinterest to reach a diverse audience.

3 - Display

Display your products on other sites to gain visibility. Use retargeting to recover abandoned shopping baskets.

4 - Affiliation

Collaborate with affiliate sites to redirect consumers to your store.

5 - Content marketing

Create quality content to bring value to your consumers.

6 - Emails

Use marketing and transactional emails to communicate directly with your customers.

For established stores, consider deepening content marketing and affiliate strategies for sustained growth.

What's more, if your company generates sales, Hero allows you to finance your invoices, including advertising, giving you financial flexibility.

Get started quickly with Marketplace

Marketplaces such as Amazon , eBay , Cdiscount ou Rakuten are a godsend for novice e-tailers.

Advantages :

• No initial investment required to list your products

• Direct access to a large customer base already loyal to these platforms

• The main cost is the commission charged on each sale, which varies from platform to platform (Amazon charges around 15% in most categories).

Disadvantage :

• Sales often take a long time to be paid for, with payment generally made on D+30. This time lag can create cash flow pressures.

To overcome this cash flow challenge, Hero advances your recipes from marketplaces. The day after the parcel is dispatched. You'll have a stable cash flow to support and develop your business.

Conclusion: how to open a business without money?

Getting started in e-commerce without substantial initial capital may seem daunting, but it's entirely possible. Identify a niche, carry out market research and create a suitable product. Establish a precise budget, explore financing options and launch your online store. Maximize your visibility through paid advertising and marketplaces. With these steps, opening a business with no money becomes a reality within reach.

Frequently asked questions

What kind of business can you open with 5,000 euros?

A customized e-commerce product is an excellent option. Investment is low and margins higher than for standard products.

How do you finance your e-commerce business?

Explore consumer loans, love-money, grants and solutions like Hero for income-based financing.

What kind of government aid is available to open a business?

In addition to unemployment benefit, you can also benefit from ACRE (reduced social security contributions) for the first year.

How do you come up with an e-commerce idea?

Identify a niche by conducting in-depth market research. The 2 most accessible methods are :

• List the problems encountered on a daily basis by those around you

• Find companies that perform well, despite a mediocre product. It's the sign of a buoyant market

What's the right budget to open an e-commerce business?

Allow an initial budget of around €5,000 to open your first online store.

Which business is more profitable?

Look for sectors with high margins, such as the sale of luxury goods or unique handicrafts.

How do I set up an e-commerce business?

Choose the right business status, define your niche, create your online store and implement acquisition strategies.

Other articles on the same subject:

• Alternative financing: everything you need to know from A to Z

• Non-dilutive financing: what options are available?