Every business has start-up costs and your new home-based business will be no different. As the old saying goes “You need money to make money”. That may be true to some degree but there are many ways you can help yourself. You will find working online is way less expensive than most other business models.
So where do you get the money you need to start a home business? The simplest way for home business owners to get the money they need is from the principal owner’s own pockets. That means YOU! Many work at home entrepreneurs simply use their own savings to fund their businesses, and/or use money from personal resources such as…
* Squirreling away a little money from income you have coming in
* Sacrificing entertainment, travel, clothes or toys 50%
* Personal Investments
* Credit Card Advance (not a great idea)
* Sale of Assets
* Second Mortgage Loan
* Borrowing from Relatives (well maybe not)
The alternative to funding it yourself is to apply for a small business loan. The biggest issue there is that unless you have sufficient collateral, or any related experience in your field of business, you may not qualify for this type of loan.
Luckily, the amount of cash you’ll need to start-up your new home business will likely not be so much that it prevents you from raising the start-up cash on your own. Why? In general, you should be thinking SMALL, or rather MICRO home-business. That mind-set will help keep the amount of your start-up funds to a minimum. Many people will have GRAND visions and will want to blow all their money right out of the gate. Now that might work on a rare occasion, but I think it’s wiser to start smaller than you may think and then grow at a financially responsible pace. Have a plan that doesn’t have you putting a third mortgage on the house or cashing in your 401K. That’s just stupid!
Keeping your overhead low is key, which will be easy since you’re working from home, and making sure you have the adequate funds necessary will also be vital to your success. You don’t want to run out of money before you’ve had enough time to fully implement your plan. That would really a shame as you would never know if you could have done it if you had a better plan!
Some recommend having enough cash to keep your business up and running for at least 6-months or even for the first year. Proper planning is essential and calculating your expenses is crucial in order to determine how much money you will need to finance your new “Micro” business. You should only budget what is absolutely necessary for you to start-up your business. Be reasonable and don’t budget for unnecessary or luxury items. Now you definitely don’t want to skimp on the necessary items, because they will make your job easier, but there’s no need for industrial grade equipment if it’s going to cost you more or a $150 phone when a $50 one does the job just fine.
When it comes to funding your home business you should plan carefully, be realistic and do not jeopardize your personal finances. You still have to maintain an acceptable quality of life.