Having worked as an employee for years, you’ve finally decided to start your own business.
Before you even come up with a business name, there are a ton of decisions that need to be made.
One of these decisions is how you are going to fund your venture in order to get yourself in a position that minimises the financial strain starting a business creates.
Be Aware Of Expenses
Depending on what type of business you start, the need for cash will always be there.
It is possible to start a business on a shoestring budget; there are plenty of books that have been written on this subject.
No matter how lean you make your business expenses, there would still be a requirement to spend some money. Examples of things businesses spend money on are:
Web hosting
Buying materials
Outsourcing
Subscriptions
Then there are personal expenses that also need to be paid for, such as:
Rent/mortgage
Utility bills
Food
Clothes
Keeping all these expenses, business and personal, as low as possible when starting a business will help ease a lot of financial pressure.
Reduce Outgoings
Any debt you have would be the first thing to tackle, in an effort to reduce outgoings.
The order in which this is done is important.
Consumer debt such as credit cards, personal loans, car loans should be paid off first.
After that, investigating ways to pay less for where you live should be considered. This can be done by putting more money onto the principal of your mortgage if you have one, or if you are renting, looking for somewhere cheaper to live.
What some people do is move countries for a couple of years where the cost of living is much lower.
Places can be found in Asia, South America and parts of Europe that are cheaper to live, and also has a community of like-minded individuals who are always on hand to spur you on.
These communities are places where business ideas and collaboration take place and can prove to be extremely fruitful.
Moving countries is not for everyone as language and cultural differences may be barriers to taking this step, as are:
Family commitments,
Ability to earn while in a different country if you miscalculate how much you need to live on, and
Access to healthcare.
Radical Living Option
Another option is to downsize your living accommodation by specifically joining the tiny house movement where you live in a space that is no greater than 45 to 50 square metres.
This option could be the solution to living debt free allowing you to invest substantially in your business.
Building a tiny house and finding somewhere to locate the house could be funded by the equity in the house you own. If you rent your current home, you could temporarily move in with family or friends and build your tiny home with the money used to pay your rent.
As the tiny house can be built to your specifications, you can configure it in such a way that suits your new lifestyle as a business owner. That is until your business starts hitting home runs, and you are able to upsize your accomodation if you choose.
Summary
Starting a business and getting it to a point it can pay you a decent income and is profitable will require sacrifices to be made.
This is one of the reasons people usually procrastinate before starting a business, as questions like how it’s going to be funded and monitised are asked.
Whenever you decide to make a start on your business, getting out of debt and reducing your overall ongoing costs would put you in a good position to focus on making your business a success.
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