Three reasons you should avoid EZ business debt and start your business with a lean budget

I have been talking about the power of broke ever since I read the book by Damon John. That book resonated with me because it confirmed what my thoughts were the entire time.  The things you complain about, lack of resources, lack of generational wealth, lack of home ownership, is actually your advantage.  You are sitting on an advantage as long as you shift your mindset to see it as an advantage instead of a good reason or justification to do nothing.

Most people who are born with little resources will sit around and complain about their lack of resources.  They will then start nothing, do nothing and be nothing and feel good about it.  They will feel good because they had a built in excuse that is rooted in facts. The fact is they are right.  You are all right about your limitations. You don’t come from money, you don’t have parents with money, you might not even be making a lot of money right now. Those are all facts and if you fail, nobody will blame you. The thing is that while we might think we have the burden of having to start lean, starting lean is actually the way you SHOULD start.

Those same facts, when flipped on their head can actually help you win as opposed to lose.  I believe the disadvantages in America are actually hidden advantages. Nevertheless, here are three quick reasons why you should start your company lean even if you have a ton of money to throw at the deal.

Strategic thinking

Having little to no money helps you think through your problems.  When you can throw money at a deal or an issue you don’t have to innovate.  When you don’t have money innovation is the only way you can get around that wall.  The key though is that wealth comes through innovation so what you are forced to do is actually a source of massive wealth.  I believe this is why African Americans make things cool. Its because of the thought required to take the basic and make it look fly. Its the same thing we do with food, language and clothing. We innovate and make it hot. The same can be done in business.

The level of thought that is generated through lack is the very reason we have some of the great companies of this day. A large majority of companies on the S&P 500 were created in a recession.  Companies that were created because people had to get scrappy and fill the money gap with a strategy or idea filling. The money gap is exactly why Todd Capital exists today.  We wanted to buy deals and didn’t have the cash to do it all so we built a brand that brought people together to buy as a unit, boom. Three doors later we accomplished that goal.

Another example of this in modern day are Uber and Air BNB . These are companies that were created by people who needed money and had to find what they had on hand or what they could borrow from another to create extra cash.  The lack of jobs or the lack of good paying jobs drove Uber to start a taxi company using a car you ALREADY own. That is the power of creativity and broke.  Air BNB is another great example.  You already own your home or lease your apartment so now you rent out a room or a couch and boom, cash flow.

The key is to strategically create lack for yourself so you are forced to create. As Grant Cardone says “stay broke”.  You can artificially create broke by refusing to get loans you would qualify for.  You can also do it by stashing all your business income to the side and getting back to the grind.  You can also do it just if you have no choice.  Lol, all you have to do is make up your mind to start.

Instead of getting into a bunch of debt to fund an idea, get proof of concept as lean as possible and then invest the earnings into the level up. This will protect you just in case the business doesn’t work out.

Low downside

All across the internet you have people promoting the concept of business credit and business funding. These are the people that promote business credit cards as a means to getting your business funded and rolling. Now I agree that in certain regards having access to cash will help you. An example is buying a hard asset such as real estate or equipment.  However, be very careful.

If you start a business and its not successful, you will still be liable for the debt that this company owes. You don’t just get to walk away from it.  The business credit might not attach itself to your credit going into the deal but when that  lender wants money they are going after whoever, who has it (kanye line).  They will sue you personally they will pierce the corporate veil they will use their massive resources to come after you and get their money.  Don’t be foolish.

Starting lean with what you have will protect you in the event that the company doesn’t thrive. If you start a business with all free everything the worst you lose is your time. If you start a business with loans and it fails you lose the time you spent AND the time you will spend paying back debt on a failed endeavor.

The worst thing you can do is throw thousands at a start up and years later have it fail and go bankrupt.  You want to keep your fixed overhead as LOW as possible. This includes subscriptions, buildings, software, employees, all of that. You don’t want high expenses to kill a great idea. 

Starting a business is a process.  You might have to start a few companies before you find one that hits. Its best to do that with as little skin in the game as possible. Then when you get a bite, set the hook and talk about business funding. This is the secure way to go unsecured. Buy a hard asset or get proof of concept.  However always start as lean as possible.

It won’t follow you

As I said above, when you start a business with debt the debt follows you.  This means that what you thought was a blessing could cripple you for years. This is the equivalent of student loans with no degree.  Avoid avoid avoid.  The strategy is to go as lean as you can.  We don’t have a money problem we have a strategy problem.  I recommend that you start with that gmail account, vista-print business cards and that WordPress site. Start with the free stuff and start putting out content and getting customers.  You don’t need funding you need a customer.  I bring this up because SO many people sit around talking about the tech company they could start if only they could get VC money. Forget that, find a way.  Funding is not holding you back, your inability to think and take the less obvious road is what is holding you back.  Don’t be like the average whiner and victim. Find a way or create a way then tax people on the way you created. 

Many people will tell you that you have to start high. They want you to have the dopest site with the dopest logo and graphics. Yeah that might look good but it’s expensive. This expense is what keeps people from starting and that expense is what ruins those who get there through debt when the business fails and they still are paying for a website design at 20% interest.  Look, you don’t need to get all that fancy stuff. You can make millions with gmail and make millions with vista print. Its not the fancy that will do the work for you it is you that will do the work.

In Conclusion: Don’t be those heavily funded failure guys

Most businesses fail. Most businesses that do well in the early states (likely with their funding) fail after the funding falls off.  This is because they were floating looks with debt.  You don’t want to float looks with debt you want to float looks with a brand and with customers who want to buy. Being customer oriented will tune you into what they want to buy over and over not what you can sell them one time with your big marketing and product budget. Be smart. There are no silver bullets. Money won’t let you skip the hard work no matter what you think.

If you see someone in America sitting on generational wealth they are also sitting on generational hard work. Don’t you for one second think that they didn’t grind. Don’t you for one second think that business credit will let you skip the grind. You have to hustle and do the work. The key though is work is how you get the skills. Your ROI on your hustle is the skills, sharpness and ability that makes you that much more in demand. People who think they can get rich without getting skills are sadly mistaken. Skill up, stay lean and start taking action today even at the most basic of levels.

If you are interested in joining any of our clubs and making a difference in your community, email if you haven’t yet done your taxes and haven’t created an LLC to organize your hustle, do so now! Email today!

Be great and invest well!

Todd Millionaire



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