Are you excited to start a new business? Maybe you have an idea or you are just fascinated with the idea of starting and growing your own business. Are you willing to take some risks, such as quitting your current job or running out of personal income for a while? But there is an obstacle to stop you: You do not have much money.
On the surface, this seems like a big problem, but the lack of personal funds should not stop you from pursuing your dreams. In fact, it is quite possible to start and grow a business with almost no personal financial investment at all – if you know what you are doing.
Why does a business need money?
First, let’s take a look at why a business needs money primarily. There is no single “start-up” fee for building a business, so different companies will have different needs. It is important to first calculate how much you need before you start finding alternative financing methods for your company. Consider the following uses:
- Permits and licenses. Depending on your area of activity, you may need special paperwork and a registry to operate.
- Supplies. Do you buy raw materials? Do you need computers and/or other devices?
- Equipment. Do you need specialized machinery or software? Perhaps you need to buy packaging. So what does product packaging cost?
- Office space. This is a huge expense and you can not neglect things like the Internet, utilities, services and if you outsource office tasks such as payroll and pricing.
- Associations, subscriptions, members. What publications and collaborations will you undertake each month?
- Operating costs. See all the necessary costs you need for the proper operation of your business and do not forget about marketing.
- Legal fees. Will you hire a lawyer throughout your business development?
- Employees, freelancers and contractors. If you can not do it yourself, you will need people in your payroll.
Reduce your needs
Your first choice is to change your business model to meet fewer needs as mentioned above. For example, if you are planning to start a company as a consultant or freelancer, you could reduce your “staff” costs by having yourself as the sole employee in the beginning. If you do not need office space, you can work from home. You can even work to find cheaper sources of supply or cut out whole product lines that are too expensive to produce in the beginning.
Seek external funding
Your third option is to make money from outside sources. I know there are dozens of possible ways to raise funds – even if you do not have the capital you want. Here are just a few possible sources for you:
- Friends and family. Do not rule out the possibility of getting help from your friends and family, even if you have to read the chapter individually from different sources.
- Crowdfunding . They are popular for a reason: with a good idea and enough work, you can attract funding for anything.
- Bank loans. You can always open a credit line at the bank if your creditworthiness is good.