Four Ways to Fund a Business Without Going into Debt
Have a great business idea and want to make it a reality? Unfortunately, having a great idea isn’t enough. Making that idea a reality means going into debt!
Or does it?
Although it’s true that some business operations require loads of startup cash that almost no one has on-hand, not every business requires that kind of cash. Especially if you look beyond the traditional ways of borrowing money and think outside the box when you’re ready to get your new business up and running.
Here are four ways to fund your business that will keep you in the black when you open your doors.
Ask for the Support of Friends and Family
It’s always worth your time to reach out to friends and family first. They want to see you succeed, so chances are, they will be willing to send you money. Well-off connections may even be able to give you a lot of startup cash, as long as you’re willing to spread the wealth when you start making money.
That isn’t the only way they can help! Friends and family can provide you with services, like making phone calls or writing website content, that would normally cost your new business money.
Look for an Investor
It can be difficult to relinquish some control of your business and some of your future profits, but if you’re willing to loosen your grip on your vision, investors can be a great way to get the money you need without taking out a loan and going into debt.
A crowdfunding site can be a great way to get started, as can reaching out to private equity firms. If you’d like a little support, in addition to a little cash, look into incubators, accelerators, and angel networks.
Keep Things Small
You may have a grand vision for your business, but it likely comes with a grand price tag. Instead of going big in the beginning, keep things small, and only expand as you can afford it.
Some ideas include:
- Running your business out of the garage
- Hire contractors instead of employees
- Keep your inventory small
If you start small enough, you may not need any startup cash at all. That also gives you the chance to continue working at your job. That way, if your idea doesn’t work out, you aren’t stuck looking for a new source of income.
Turn to Your Retirement
You can fund your business using your retirement. It’s a way to get the cash you need without taking out any debt, and when done properly, you won’t incur any tax penalties either.
This option is best for people who are relatively financially stable. After all, if the business fails, your retirement will go out the door right along with it!
Don’t think you have to be okay living with massive amounts of debt if you want to fund your business and get it up and running. With these tips, you can start working with customers and clients without the need for a loan.
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