Follow entrepreneur Lauren Grech's advice to build your business without investors.
- Starting a company without the weight of investors can yield many benefits that outweigh the cons, like controlling your own destiny, not having to compromise with shareholders and quickly changing business direction when needed.
- If you do not have investors, you must be prepared to spend more of one thing in particular: time.
- Build a successful startup by investing your free time, learning how to take on every job responsibility and making the necessary sacrifices for growth.
- Always keep an eye on your finances, and only hire employees when necessary.
Building a business from the ground up is often very difficult. Building a business without the initial cash flow from investors can be even harder. However, choosing to start a company without the weight of investors can yield many benefits that outweigh the cons.
Lauren Grech, the CEO and co-founder of LLG Events, an international event management firm specializing in luxury destination weddings, discovered those benefits when she partnered up with her husband, Paul, to build what would later become a successful business without investors.
Grech was working as a research and development scientist at the medical examiner's office in New York City when the idea to start her own luxury event business piqued her interest. Shortly after planning her own wedding, Grech learned her passion for event planning and decided to pursue it professionally. She knew it would take hard work and dedication, but with her husband by her side, she believed they could turn their dream into a reality without investor funding.
"I decided it would be best to undertake LLG Events using my own time instead of other people's money," Grech told Business News Daily. "For me, the benefit was the ability to drive the business in whatever direction required to get us to where we are today."
Benefits of starting a business without investors
Many decisions go into starting a business, including whether or not to have financial investors. It is important to weigh the pros and cons of taking outside money, and to take note of what options are realistic for your business. Grech said that starting something on your own and investing your own time and capital is demanding, but it can be highly rewarding.
She said there are a number of benefits to starting a business without investors:
- You have complete control of your own destiny. It allows you to understand your capabilities and shortcomings, which you can see the direct result of through success or failure. The rewards are yours, but so are the losses.
- You can push yourself and live up to your potential. One of the most intimidating things about starting a new business is the risk that it is going to fail. However, if you are solely responsible for your business, you may be more inclined to work harder to achieve your dreams.
- You don't have to compromise with shareholders or a board of directors. When investors' motivations are different from your own, it can cause difficulties and tension with decision-making. Investors can also add more pressure financially, mentally and emotionally.
- You have the freedom to quickly change direction as needed. Going without investors gives you the freedom to pivot or shift the direction of your business without convincing others that it is a good idea. This enables you to quickly adapt to the constantly changing market.
"It is important to be as agile as possible, especially in the early days as you continue to search for product-market fit," Grech said.
How to start a business without investors
Starting a business with investors and without are very similar paths. However, if you do not have outside financial backing, you must be prepared to spend more of one thing in particular: time.
"When starting a company without investors, you must put in the investment of time," said Grech. "There is a trade-off between the financial commitment investors can provide with the time it takes to start your business."
1. Invest your free time into your side hustle.
Since starting a business without investors can leave you strapped for financing, it may be wise to keep your day job while you develop your new business. Grech and her husband did this by volunteering at events on the weekends to gain industry knowledge, insight and network connections. Grech went to work early so she could leave early to meet with vendors and clients, as well as to work on her website, marketing and planning materials.
"I worked for free, with any free time that I had," said Grech. "The more time I was able to focus on LLG, the more time I was able to dedicate to the business."
2. Learn how to take on every job title and responsibility.
Growing a business without investors comes with additional responsibility and pressure, since you are likely your only employee. In the beginning, you may not have the capital to hire employees, causing you to take on every job title and responsibility by yourself.
"You learn to become your own lawyer, accountant, secretary, etc., and you run every department until you acquire enough money from your sales to hire talented and specialized personnel," Grech said.
3. Make the necessary sacrifices to grow your business.
Your business, like a baby, is going to demand a lot of time and attention. You must be willing to make sacrifices to free up your time. Grech said the more time you can free up, the more you can work on your startup and expedite the next phase of your business. However, keep in mind that spending time on your venture will take time away from other activities or people. It's a give-and-take that you must figure out how to balance.
"In the early part of my career, I had to make a lot of sacrifices," said Grech. "Every penny went into the company, and Paul and I did not travel unless it was for business. We skipped family gatherings, birthdays and nights out with friends, all to work and focus on the company's growth."
4. Hire the right individuals (when you can afford it).
When you are finally in a position to scale your business, you should invest in the right individuals. The people you hire should be specialists who believe in your vision. Grech said that finding the right employee is like finding the right investor.
"You need to find those who share in your vision and your growth, who believe in what you're doing and the message you are spreading," Grech said. "For me, company culture was everything, and if we were going to expand, it needed to be with the right people."
Grech advises bringing on team members slowly, only hiring when necessary. She said it is important to focus on building a business savings.
5. Don't forget about finances.
Through the entire startup process, keep your revenue and finances in mind. Since you won't have investors to support you in times of need, ensure your company is always in the green. Grech said that she worried about financial responsibilities and commitments every step of the way.
"Paul and I were sure to never overextend ourselves financially," she said. "Instead, we'd rather take on the work and increase our capacity in order to achieve what was necessary for the business to grow."
Tips for managing expectations
One of the hardest lessons Grech had to learn was to have patience. As an up-and-coming entrepreneur, you may want immediate success, but this is not a realistic expectation. Patience can allow you to see the difference between short- and long-term gains, as well as to manage your expectations.
Another important quality to attain is self-control. Grech said a high level of self-control allows you to make fewer impulsive and emotionally driven decisions. It can empower you to make decisions without fear, keeping you calm in situations of high stress, because you have the knowledge and faith that everything will work itself out in due time.
"My advice to future entrepreneurs is to just stay the course," said Grech. "Investors help, but ultimately you are in debt to them. You can do this on your own if you believe in yourself and invest the most precious thing: time."