One of the best ways to stay passionate, engaged, and financially successful in your career is to start a business. There are a variety of benefits you may enjoy when you start a business for yourself.
- Independence and flexibility
- Personal fulfilment
- Doing what you love
- Embracing creativity
When you start a business, you make a pact with yourself to put all your heart and soul into a project that you are passionate about. Just as importantly, you set out on a path to make money for yourself. There is nothing more satisfying than making money off your own ideas, sacrifices, and energy.
To start a business, you need a good idea and enough faith in it to see it through until it starts to become profitable. However, you also need business funding. Business funding is often one of the biggest hurdles aspiring small business owners face when they set off to start a business.
No matter how brilliant your idea is, and now matter how motivated you are, without business funding your small business will struggle to get off the ground. In this sense, the old adage is true: it takes money to make money.
So, how exactly do you raise enough business funding to properly start a business? Check out these 5 tips below on how to start your personal business journey.
Tip 1: Self-Funding
When you start a business and begin to consider how to procure business funding, the first place you should look is your own bank account. If you are serious about your plan to start a business, it is likely that it is something you have been thinking of for a fair amount of time. Similarly, it is likely that you have considered how you might find business funding in the future. As such, it is also likely that you have earmarked a part of your savings as a startup fund.
Self-funding, while perhaps the most obvious way to obtain business funding, is also one of the scariest ways to start a business. It can be scary to see your personal funds drain, but there is no risk without reward. Self-funding is a great first step when you are looking for business funding.
Tip 2: Bank Loan
Once you have considered how much of your own money you are willing to use to start a business, you can explore the possibilities that come with taking out a bank loan. A bank loan, especially for a first-time business owner, is an important part of amassing the business funding you need.
First time business owners will not have a line of credit attached to their company. This means that most banks will not give out a bank loan based on the company, or the idea behind the company, itself. However, they will issue a bank loan based off your personal credit. If you have a credit score of 680 or higher, a personal bank loan is certainly in reach.
With the bank loan in hand, combined with your personal business funding, the funds to start a business will begin to grow, as will your chances of success.
Tip 3: Government Programs
The health of small businesses is a metric that economists and the government use to judge, in part, the health of the economy. As such, the government has a variety of programs that provide business funding for those looking to start a business.
The Small Business Administration (SBA) has a program that offers microloans to small businesses. The program could provide business funding up to $50,000 to help qualified individuals start a business.
The SBA program not only provides start-up businesses with much needed cash, it also establishes a line of credit for your business that will make it easier to get a bank loan in your business’ name. Because the government wants to see small businesses thrive, the loan terms are often very favorable.
Tip 4: Auto Equity Loans
Once you have compiled your personal funds, bank loan, and small business loan from the government, your business’ finances should be in fairly good shape. You can then start your business and work towards gaining financial and personal independence.
With that said, one of the pitfalls of running your own business is having to deal with unexpected costs. When these costs rear their head, it is very likely that you will need quick cash to plug the proverbial dam. One of the best ways to do this is through an auto equity loan.
An auto equity lender will use your car as collateral and lend you an amount of money based on the value of your car. In many states, it is possible to receive up to $40,000 in less than an hour, meaning it’s a great way to pump cash into your business when you need it most.
In this case, an example will help illustrate why auto equity loans can be so effective when you need emergency business funds.
Let’s say, for example, you live in Sacramento, California and have purchased all the equipment and supplies you will need to run your business using your own bank account, a bank loan, and/or a government loan.
Everything is in order until you realize that in order to form an LLC in the state of California, you will need to pay a minimum of $800 in taxes.
With your budget stretched thin, this unexpected expense could completely sink your business. However, instead of panicking, simply find your local auto equity loan lender and obtain the cash you need to stay afloat.
Tip 5: Plan Ahead
However you decide to fund your business idea, it is important to think ahead and account for any potential challenges you might face. By planning ahead, you could avoid many financial issues in the future by saving funds and budgeting for excess expenses.
Running a business is never easy, but if you follow these tips on how to fund your business and have a solid business plan, starting a business will be one of the most rewarding choices you will ever make.