Starting a business is a tough feat for just about anyone, even those washed in cash. For those that follow sports, you often hear stories of professional athletes worth millions of dollars can lose it all by making a few bad business decisions. Or, their business that seemed so promising at the start shuts their doors three months later.
Being able to start a business with debt may seem difficult. It’s no secret that all businesses need one thing to really get off the ground: cash. Businesses need an injection of money to cover costs and grow.
For those in debt, starting a business might seem impossible. You might as well try to hop one-legged up Mount Everest! We’re here to tell you that it’s not impossible. We can’t sugarcoat it either, but with plenty of determination and management, you can start a business.
Below, we have five tips on how you can go about achieving your dream of starting your own business.
Look for Different Ways to Combat Your Debt
Whether you’re graduating college or are just facing a huge wall of credit card debt, it might seem like the only options you have are to be making those monthly payments on time and getting ahead when you can.
If you’re facing student debt, try examining various repayment options. There are plenty of different ways to pay back those loans and most are unaware of those options. Do some research on your situation and see if you qualify for any of those plans.
Here’s a shortlist for your search efforts:
- Graduated repayment plan
- Extended repayment plan
- Income-based repayment plan
- Income-sensitive repayment plan
Those income plans may be of particular interest to any future entrepreneurs, as they set up payment plans dependent on your monthly income and family size. In fact, you can qualify for loan forgiveness if your payments haven’t been completed after 20 years.
For those with credit card debt, think about how you can consolidate that payment. That way, you can save on interest payments and control your debt with more ease.
Think of a Business With Low Up-Front Costs
Even though you might be doing a great job consolidating your debt, you still might be in the hole. Your dream of opening a beautiful storefront may have to wait as you explore other options.
One of these options is the e-commerce business. Big names like Amazon are becoming more and more popular every year, but did you know that in two years time, roughly 20% of all retail purchases will be made online?
One of the more cost-friendly businesses to start is dropshipping, where your store acts as the middle man between the items and the consumer. Even though you’re selling bear traps, you may never actually have one in your vicinity. Find a great domain, set up a store, and boom, you are off to the races!
This is just an example, but definitely a business worth looking into.
Find Ready Investors
Much easier said than done, but finding investors who are cash-ready is definitely going to help get your business off the ground.
This does come with some sacrifices however, in that you may have to accept a 50-50 partnership or lose the majority control of your business. It also may be a Shark Tank like search for partners who are willing to foot the bill. Your city or town may have grants available if you’re starting a local business.
If you’re having trouble finding a partner, would you ever consider turning to a friend or relative? It might not be the best idea but it might also be the only place where you will be able to get cash quickly.
Manage Your Outside Expenses
When you’re getting off the ground, there’s not going to be a whole lot more room in your life other than investing in your business and paying off any outstanding debt.
That’s why you need to have a picture-perfect financial plan not just for your business, but for your personal life. Everyone’s experience is different, but you might have to be budgeting down to the dollar each month.
Go over your financial statements and see what you can sacrifice or cut out. You might have to stop going to trivia every Tuesday or make more frequent use of public transportation. It might be time to cut cable out and just rely on streaming shows.
Look at your expenses and ask yourself, “Do I need this. No, do I really need this?” Each dollar saved can be a dollar invested back into your business or helping you get out of debt.
Stop Worrying About Money and Regain Control
Ready to regain control of your money? Take the first step with this free starter pack which includes:
- 2 Monthly Bill Calendar templates
- 1 'Start Paying Off Your Debt' Checklist
- 1 'Drastically Cut Your Expenses' Checklist