How to Start a Small Business Without Going Broke
By leadership author and keynote speaker Ross Shafer
So—you want to start a small business, but you don’t want to blow your life savings doing it. Smart. I’m talking to you—the dreamers, the doers, and the side-hustlers who’ve heard that 50% of small businesses fail within five years and are rightfully cautious.
Yes, that statistic is true. But let’s talk about why they fail—and more importantly, how you can beat the odds and succeed.
Why Do Half of All Small Businesses Fail?
Simple. They run out of money.
That’s why you see so many entrepreneurs going on shows like Shark Tank—they need funding to stay alive. But let’s say the Sharks don’t bite. That’s OK. You can still make it… if you understand cash flow.
Cash Flow: The Lifeblood of Your Business
Cash flow is the money coming in versus the money going out. Outflows include rent, licenses, internet, taxes, and any equipment or help you need to launch. Just like running a household, you won’t survive if you’re spending more than you’re bringing in.
Poor cash management is the #1 reason small businesses go bankrupt. So here’s my first hard truth: Don’t quit your day job.
You’ll need that steady income to pay your existing bills while your business gets off the ground. Your startup isn’t going to support you—yet.
Start Small. Start Smart. Start From Home.
I recommend starting your small business at home or online. That way, your overhead stays low. Work at night. Get up an hour earlier. Just carve out the time.
Why online? Because you don’t even know yet if your product or service is in demand.
Here’s a simple, low-cost way to test it:
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Create a free website
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Sign up for PayPal to accept payments
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Promote your idea by emailing friends and posting on social media
There’s truly no better time to start a small business for under $500.
The Second Biggest Business Killer? Ego.
Some people get caught up in the fantasy. They lease a storefront before making a sale. They hire employees too early. They buy a car thinking they’ll “write it off.” Don’t fall into these traps.
Keep expenses low for the first 9 months. Figure out:
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What sells (and what doesn’t)
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What customers are willing to pay
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Where to get cheaper supplies
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Who can refer business to you
Being frugal is being smart. There’s no shame in running lean—only power in staying in the game.
Obsess Over the Books
If you’re serious about winning in business, become an obsessive bookkeeper. Track every dollar you make and every dollar you spend.
Don’t buy anything new—not until your bank account is consistently growing. That’s the kind of financial discipline that will set you apart from the 50% who didn’t make it.
Take Action, Start Smart, and Stick With It
If you manage your cash flow, keep your ego in check, and start small, you can build a business that’s profitable, sustainable, and personally rewarding.
And remember:
You’re not just starting a business. You’re starting your freedom.
Want to Empower Your Team or Audience with Real-World Business Advice?
Book Ross Shafer as your next keynote speaker. With decades of experience and a track record of helping entrepreneurs succeed, Ross delivers motivational, no-nonsense strategies that get results. Perfect for corporate events, business seminars, or entrepreneurial workshops.