If you are born to be a business owner, then there is no need to suffer in silence by taking up a nine-to-five job and forget about it due to your indebtedness to others. No matter how much you are in debt, there are ways in which you can make an investment in a small business and follow your dreams.
Ideally, people in debts have a lot of misconceptions, but the two most common misconceptions amongst people about starting any business are:
Well, both are untrue. Provided you stick to the basics, there is an n-number of ways in which you can start a business even if you have debts. It is true that you will need money to invest but or that you do not need to take on more debts and further aggravate the severe financial condition of yours. It all depends on the type of business that you want to start with.
Determine the type of business
The first most significant step to follow carefully when you want to start a business of your own while being in debt is to make the perfect choice of your business. You must choose a type of business that will need minimum cash and capital to start with.
Ideally, the best and perhaps the most productive business to choose in such a hard financial condition is any business that is service oriented. There are specific reasons for saying so:
- You will need less tools and equipment depending on the type of service you choose to offer
- You will not require huge cash to rent an office as you can simply take on calls and operate from your home or your garage space and
- You will not need any staff initially if you are knowledgeable about the service and provide it yourself.
Staring your business with a low profile will save you from incurring debt and borrow money unnecessarily and go through debt consolidation reviews to get rid of your debts. Once you make your mark in the market, you can slowly but surely expand your business in due course of time.
Use your available resources in the best way
With limited cash, you will have limited resources, but you must make the best use of whatever is available to you at the moment. Make sure that you are not extravagant with your expenses to keep your operational cost and other overheads as low as possible.
- Instead of going for expensive furniture look for those that are lying in your basement or storage room and collecting dust.
- Use your home phone at the moment as your office contact number to take calls and establish a relationship with your clients.
- Use faxes and copiers if required of the local shops.
- For email marketing do not invest in a computer right now if you do not have but use one of the cyber cafes in your area instead.
Every home has a lot of unused assets and supplies and these when used will save a lot of money at the moment. Once your business starts to grow, you can think of investing in new supplies.
Apart from that, make sure you make the best use of the free resources as much as possible. Consult and take advice from your local business administration office and search online for more information on this matter.
Design a perfect plan
You must design and follow a perfect plan for your business. You can even apply for a small business loan that is offered by several banks and other lenders, provided your business is productive and profitable. Make sure that you know the terms and conditions of the loan and its repayment.
- Follow a proper marketing strategy but keep it low. Use the online resources for this matter to the maximum and to reach out to a larger audience that could be your prospective customers.
- Once you start earning from your business make sure you use this profit for beneficial purposes for your business and not for personal pleasure. Remember, this is a time for hardship, sacrifices, and compromises that will pay off in the long run.
Keep in reinvesting your profit in your business and create a fund for this. Be a bit creative and have perseverance and patience to be successful in your business.
Bankroll your business
You will need a steady cash flow and keep your initial expenses low to start a business in debt. You will need to check out all available options to finance your business. There are a lot of such resources such as:
- Credit card financing
- Crowd funding
- Alternative lenders and much more.
However easy these loans may seem to you, these can further jeopardize your financial condition. It is therefore required that you know the pros and cons involved in each before you start your initial proceedings.
Choose revenue based or cash flow lenders. They will be more interested in your credit score and business revenues rather than your debt loads.
You may also find a partner to your business who knows how to bankroll a business. You may get a lot of financial help from such a partner when you sign a partnership. Make sure that you do not lose control of YOUR business in the process. Ideally, such a partnership must be in fifty-fifty profit sharing basis.
If you have a friend or a relative who can lend you cash at zero percent interest, then there is nothing like it.
Save for your business
If you do not want to take on more debt while starting your business, make plans early and start to save money for it beforehand to invest. For this, you may have to bring in a few changes in your lifestyle, but you should not shy away from it. You can save a lot of money by curbing your expenses on eating-outs, and you may even refinance your car loan. Not using your credit card, purchasing in cash from discount stores and sticking to basic necessities are a few other useful ways to save money for your business investment.