Money Makes Entrepreneurs Stupid: Growing a Business Without Money


Money makes entrepreneurs stupid – no matter what form: loans, credit cards or IOUs from family. It makes entrepreneurs spend money on things that don’t matter or that don’t directly affect your ability to generate sales.

I call them “crutches.” Okay, I may be biased because I was denied loans when I first wanted to buy the telephone company I was working for, but I am forever grateful for the important lessons the denial of the loan taught me while building my $36 million company.

8 Essential Lessons on Growing a Business Without Money

Entrepreneur Lesson #1: If you are unable to make money in your business without money, when you get money such as a loan or investment, you will not be able to make money either. Harsh words, but let’s break down what were you going to use the money for?

To Pay yourself?

Entrepreneur Lesson #2: If you are getting a loan in order to pay yourself, you are not ready to be an entrepreneur. Your pay should be directly proportionate to the revenue that you produce. This is one of the reasons why we become entrepreneurs to reap the benefits of big sales. AND every person you hire, should be held to the same requirements. All employees.

Entrepreneur Lesson #3: Hire only to insure more revenue can now be produced as a result of the hire.

To Buy ads? Buy ADVERTISING? Let me be frank – spending money does not guarantee you will get you a customer. It can allow you to buy ads. BUT what if it does not work? Now, I am thankful for having no back up. I was forced to sell and market my way to a million dollar business.

Entrepreneur Lesson #4: Start with Your Target Market – Don’t start with the media. Most entrepreneurs start with the media, thinking, “I will use the Internet because it’s free.”

Have you made sure that your customers are online? The local newspaper made me an inexpensive offer to advertise everyday of the week; however, my credit challenged customers did not read the newspaper.

Entrepreneur Lesson #5: Speak directly to your target market – I targeted customers who were credit challenged and who had their telephone service disconnected before. All images, words were geared to those that had been disconnected before.

Entrepreneur Lesson #6: Test everything first – Set up smaller pilot projects to test everything on a smaller scale and then let the results rule your decisions.

Never sign 1-year agreements for marketing media, even if it costs double. The price is not your concern. Your concern is testing to see if the media is right for your target audience. You testing to see if your offer brings in enough customers to produce an amount more than you paid (ROI or Return on Investment) to determine if you should invest more.
What about money to create your product, you ask?

If you need capital to create your product, you can get a few manufactured to demonstrate how it works, then sell an order based on the “prototype”. Once you have an order, then you are allowed to get a loan to pay for the manufacturing of the product.

BUT – if you want money to buy ads, create a website, business cards, pay yourself, this is one of the biggest mistakes you can make in your business.

Entrepreneur Lesson #7: Money is only for investing in proven systems, ads, or products. For example, you sell your product to Wal-Mart and it will be on their shelves. Now, you take the order and use the money to fill the order. You have tested a small ad in your local paper for one issue. Customers are coming in buying products. Now, you can use money to buy more ads in the paper.

Entrepreneur Lesson #8: You are not allowed to buy an asset unless it appreciates or the asset will directly drive revenue until your business has made a profit 3 years in a row. I watch entrepreneurs make this mistake all the time. As soon as they sign a new client, they decide to purchase a new car, house or boat. YIKES! And soon, they are in trouble. Resist the inclination to spend your cash.

When you have cash sitting there, you tend to make bad decisions. Have someplace for the money to go. Set a budget and stick to it. There should never be extra money. When every decision directly impacts your ability to eat each day, you will make smarter decisions.

Want more practical, no-nonsense tips on how to build a million dollar business from the ground up? Grab a copy of The Million Dollar Equation – How to Build a Million Dollar Business in 3 Years or Less!


About Author

Richelle Shaw for many years was the only female African American public utility owner in the United States. She built her first business from $300,000 to $36million lost it all after the 9-11 Tragedies and rebuilt her million dollar business in about 6 months. Her first book, How to Build A Million Dollar Business in Las Vegas – Without the Casinos chronicled her story. Richelle’s latest book – The Million Dollar Equation – How to Build A Million Dollar Business in 3 Years or Less gives entrepreneurs a step by step blueprint for reaching the million dollar level. Find her online at or @RichelleShaw on Twitter.


  1. @RichelleShaw is brilliant! Love her books and subscribe to her emails. I’m so glad to see her on Twitter. Her Vegas book helped me make @ModelSupplies a success!

  2. It is said that necessity is the mother of invention. When entrepreneurs have just sufficient funds to scrape by they can come up with some very ingenious ways to grow their business. the tips you have provided are very useful for any entrepreneurs who are trying to make it work with little money.

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