THE BLOG
09/19/2014 01:08 pm ET Updated Nov 19, 2014

Starting a Business? Beg, Borrow and Take All the Free Stuff You Can Get

Everyone loves a start-up story. The romantic notions of tenacity, drive and passion that fuel a company from a start-up to a successful, thriving business--seemingly overnight--are nothing short of inspiring. One of the media's favorite start-up plotlines is that of the wunderkind whose great idea attracts millions of dollars in funding from venture capitalists eager to "get in on the ground floor" of his fledgling enterprise.

Reality check: according to VentureBeat, venture capitalists fund less than one percent of the estimated 565,000 start-ups that launch in the U.S. each month (the latest Global Entrepreneurship Monitor report states that 25 million Americans are in the process of starting or running a "new business" as of 2013). Among that tiny fraction, three out of four still fail, and most of them throw in the towel less than two years after their last round of funding.

Regardless of where it comes from, cash is the lifeblood of any early stage company, and the most important rule of thumb for start-up cash flow management is this: never buy or build what you can lease, rent, or otherwise get for free (the technical term is "borrow," but without any intention of returning).

In HighTower's early days, we lacked a basic resource many professionals take for granted: an office. While today "mobile office" is the new buzzword, we were working on the fly way before it was cool. We did conference calls from our cars, parked like cops conversing on the interstate--driver's side window to driver's side window--our phones muted when we weren't talking to cover up the cacophony of street noise going on right outside.

When someone asked where our office was located, we identified a MailBoxes Etc. P.O. box address. It wasn't glamorous, and it created logistical nightmares on several occasions. But we could get by without an office, so we did--until we had the money to lease the space that made sense for our growing needs.

If you're a new business, get those visions of sleek, glass-walled offices and business class plane tickets out of your head. You don't have the money. And if you do, there are much more pertinent ways to spend it, like on hiring talented people who share your vision and passion. Oh, and hold off on that fancy logo-building project. Instead just whip something up quickly knowing that you will "rebrand" when you actually have some funds to spend. LogoWorks delivers logo concepts in three days, starting at $299.

In the meantime every dollar possible should be put towards proving that the market will validate your hypothesis - get someone, anyone, to actually buy what you are selling. "Pessimize" your numbers--visualize your worst case scenario, then ask what else can go wrong. Whack total expenses by 30, 40 or even 50 percent. Learn to live with the new numbers.

Fortunately, thanks to our newfangled start-up culture, free resources abound if you know where to look. Web-based tools and platforms like DropBox, WordPress, Google Analytics and SurveyMonkey are entirely free or have free components. Craigslist has a whole section called "barter" where you can trade products or services in-kind. If working from your car isn't a viable option, ShareDesk.net can help you find a communal office space in your city.

Last but not least, ask. One of my fondest memories as a start-up was being a road warrior and pitching potential investors. We would schedule ten meetings a day in New York with various family offices, private equity firms and hedge funds. Upon entering a beautiful office at a large private equity fund (where the value of the art on the walls far exceeded our financing needs), a receptionist would greet us and ask us if we needed anything. Clearly, the request was intended to include water or perhaps a Diet Coke, but often we would ask (hesitantly and bit sheepishly), "Do you happen to have a printer here?"

"Why yes, of course, can I print something for you?" Was the inevitable response.

"Uh, yes, actually, if you can do these in color, and either bind or staple them, that would be great."

"How many copies?"

"Uh, how many people will be in the meeting? Twelve? Then twelve should do it."

Once in the meeting, we would hand out two or three hard copies of our presentation, use the projector as a visual aid, and shove the extra copies into our bags (in case our hosts for the next meeting were not as well-appointed or willing to share their commercial printing capabilities). Over the course of many months, hundreds of meetings and several rounds of financing, we effectively outsourced our production costs for presentations to our audience, saving us tens of thousands of dollars in Kinko's expenses. Even after our first round, we took great delight in using this tactic to let the private equity community fund the production of their own pitch materials.

When you don't have much capital to work with, resourcefulness (with a hint of audacity) can go a long way in getting your new business off the ground--and best of all, it's free.