How To Start A Business With Little Money

I wrote previously on my website about how to prepare mentally and financially for entrepreneurship. While those articles warn readers to take their time before jumping into the lifestyle I know there are people who want to start now. And these individuals won’t have all the money to start but still want to anyway. If you’re one of those individuals then this article is for you! Here’s how to start a business with little money.

Tip #1 On How To Start A Business With Little Money: Stay Employed!

My first tip on how to start a business with little money is to stay employed. I know you probably want to quit your job and work for yourself full-time but that’s not realistic if you have little money in your bank account. How are you going to pay your personal expenses? Can you afford to pay for the licenses and/or fees to start your business? Probably not. So stay employed!

Now, you don’t have to continue working 40 hours a week. You can work a part-time job. Working 20 hours a week can be enough money to live on if you’re willing to live lean. And with some part-time jobs you will get health insurance which is a boon, as private health insurance is expensive. Finally, since you still have some money coming in this can help fund your business venture.

Tip #2 On How To Start A Business With Little Money: Use Debt Wisely

My second tip on how to start a business with little money is to use debt wisely. You probably won’t be able to get a business credit card for your new venture so you’ll have to use your personal credit. This can be risky because if you’re business fails then you’re on the hook to repay the debt. Yet, if you use your credit wisely you can start your business.

If possible, charge your business startup fees to your credit card:

  • Business license and/or fees
  • Materials, products, or services
  • Computers or other electronics
  • Office equipment

When it comes to those purchases, however, don’t overspend. Using debt wisely in this case is to be extremely frugal and don’t purchase the high-end models. If you do then your minimum payments will be quite high. And that will eat up the little money you have.

Final Tip: Borrow A Small Sum From A Family Member Or A Friend

My final tip on how to start a business with little money is to borrow a small sum of money from a family member or friend. Yes, I know that borrowing money from these individuals can cause problems or strain the relationship. However, if you are honest with that person about how you will use the money he or she may be more likely to lend you the money.

Also, you must have a plan to pay that person back. You can do so in installments starting a money after borrowing the money. Or you can set a payoff date six months into the future. Finally, write down this agreement so nothing gets lost or forgotten. You have to do this with a bank, so why not with a family member or friend?

Finally, don’t borrow a large amount. I would keep you request under $1000. That amount won’t scare off whoever you ask. And someone may just give it to you as a gift instead of lending it to you. (If that happens please give that person a heart-felt thank you gift.)

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