Most people believe they need a mountain of cash to start a business. Not true. You can start your own business with little or no cash of your own. How? Go virtual. That means outsource everything. Here's an example of how it works and how you can do it for yourself.

Someone called me a few days ago to pitch me on investing in a new herbal product business. I declined the investment and instead showed the caller that she did not need an investor. She just needed a better business model. She already had more than enough capital (albeit only a few thousand dollars) to get her business up, running and earning huge profits.

Thanks to the Communication & Information Age in which we live, it is now possible to start, operate and rapidly grow a highly profitable virtual business where Virtual Business means - Outsource Everything!

The advantage is you do not need wads of cash. Instead you will leverage the capital and business capacities of your suppliers and service providers. These existing businesses already have everything you need and will fight their competitors to win your business.

The disadvantage is that you give up some of the profits. Oops. I didn’t state that correctly. You give up some of the profit margin. But, you actually make more profit in dollars and make it quicker. Let me explain.

Here’s the business model I gave her. In fact, here's how to do it.

She had already teamed up with a master herbalist to develop her blend of herbs and extracts with its now clinically proven relief of symptoms commonly experienced by senior citizens. She had also figured out that the product can be sold for more than 10 times its manufacturing cost.

The easiest and fastest way to get her product into the marketplace is to outsource everything. A contract manufacturer will produce, bottle, and label the product to her specifications. It can then be shipped to a fulfillment house that warehouses the product, processes the orders, handles any final assembly, ships to the customer and handles any returns or refunds. A marketing company can promote the product via social media and search engine ads and SEO. Orders can be taken directly through a website shopping cart and by an inbound telemarketing company that relays the orders to the fulfillment house. A bookkeeping service can handle all the record keeping by tying in electronically to all of the outsource providers. She will have no office and her communication with all the component entities and her customers will be primarily by web-based interface with occasional contact by email or a rare phone call. An agreement can be made with each of these service providers to absorb the setup expense and get paid a share of the revenue. She can even handle any need for a meeting between her and any number of her various suppliers using Skype.

Thus, she has little or no start-up costs and little or no fixed overhead. If the product fails, her risk and expenses are minimal. If the product is a huge success, her capabilities are scalable and she can meet demand faster and in volumes far in excess of what she could handle with just her own resources.

Her net margins will be smaller than if she put together the entire project in-house at her company’s expense. So what? The advantages far outweigh the disadvantages and the total profit can be more (thanks to her service providers’ abilities to gear up quickly and carry the capitalization requirements).

You do not deposit percentages into the bank. You can only deposit dollars and this model maximizes your dollar profits. And, either way you are going to give up a percentage of your profits. Does it really matter if you give them up to service providers or traditional investors?

Oh! And did I mention that it’s a lot easier and less time consuming to run a virtual business than it is a conventional business. Now she can redirect all of that conventional management & administration time and energy to focus on new product development (a higher and better use of her time from which lot’s more profit can be generated). Or, she just might use some of the extra time and profit to have some fun with her family at some great upscale resort.

Here is something else to think about. When being "first to market" is important, starting online as a virtual business where every business function is outsourced is especially powerful.

If you are not already a member of Bizar Financing, check out Getting Rich Your Way for more great ways to start, buy or build your own business with little or none of your own cash. For our Bizar Financing Pro members, checkout the case study called “The Cookie Monster.” The exact methods used by the creator of this nationwide baking company to generate enthusiastic suppliers are spelled out in enough detail for you to replicate them for your own virtual business. A virtual business which outsources everything is a great way for a budding entrepreneur to join the ranks of the highly compensated self-employed. If your business has high margins, outsourcing everything just makes perfect sense. It makes perfect dollars and cents too.

Gordon Bizar

Gordon Bizar - Expert Business Buyer and Finance Coach Gordon simplifies business purchasing and financing. He makes understandable the use of financial leverage to start, buy or build any business with little or none of your own cash. His unique expertise and success track record has led to his appearances on NBC's Today Show, PBS's Late Night America along with segments on more than 120 other radio and TV news and talk shows. He has been featured in articles in more than 25 of the nation’s leading newspapers including the Los Angeles Times, New York Times, and Wall Street Journal. Gordon personally bought and built companies in fields as diverse as manufacturing, financial services and business education. He also served as Chairman of the California Task Force on Taxation and Regulation of Small Business during the Brown administration and is sought after as a consultant by businesses large and small and government agencies such as NASA for their technology transfer program.

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